U.S. stocks surged to fresh records on Wednesday. The rally marked a sharp rebound from losses tied to the Iran war. A two-week surge pushed the S&P 500 to an all-time high.
The benchmark index closed at 7,022.95. It rose 0.8% on the day. The Nasdaq Composite jumped 1.6% to 24,016.02. It marked its first record close since late October.
The rally comes just weeks after both indexes slipped into correction territory. That drop was driven by fears that the conflict in the Middle East would disrupt global markets.
At its lowest point in March, the S&P 500 had fallen roughly 9% below its previous record set in January. Since then, equities have staged a strong comeback. The rebound has been driven by improving corporate earnings. It has also been supported by growing optimism that tensions between Washington and Tehran could ease.
Investor sentiment has improved as well. Markets reacted to signs that the United States and Iran may return to negotiations. Karoline Leavitt said discussions about a second round of talks were ongoing and productive. She also dismissed reports that the U.S. had requested a ceasefire.
Markets have also found support in early earnings results. Major financial firms helped lead gains. Bank of America shares rose 1.8% after reporting higher first-quarter profit. Morgan Stanley climbed 4.5% after posting strong results. The financial sector ended the day higher. That added to the broader momentum.
“A lot of people looked at that recent correction simply as a ‘sale,’” said Gabriel Shahin, CEO of Falcon Wealth Planning. “When you strip away the headlines, there’s nothing fundamentally wrong with our businesses or the broader economy.”
Technology stocks were among the biggest drivers of the rally. The S&P 500 information technology sector climbed more than 2%. Software stocks posted even stronger gains. The Nasdaq has now logged an 11-session winning streak. It is the longest run since 2021.
Market strategists said the rally reflects growing confidence. Investors believe the economic impact of the conflict may be contained. Jeff Schulze of ClearBridge Investments pointed to a “good start” to earnings season. He also cited hopes for progress toward a U.S.-Iran resolution.
“Markets rarely wait for information to be complete,” Schulze said. “Although there is still uncertainty out there with regard to the energy disruption, markets are rightly assessing that the risks are declining and the path of least resistance is up.”
Still, some analysts warned that the rally may need stronger confirmation. Oil prices remain elevated compared to pre-war levels. There is also no clear resolution yet to the conflict. Art Hogan of B. Riley Wealth said markets may need more concrete progress on diplomacy. That could be required before extending gains further.
Elsewhere, volatility eased. The CBOE Volatility Index fell to its lowest level since late February. Advancing stocks outpaced decliners on both the New York Stock Exchange and Nasdaq. That signals broad-based strength across the market.
Despite lingering uncertainty, the latest surge shows how quickly Wall Street has recovered. Investors are betting that the worst-case economic fallout from the Iran war may not materialize.