Trump says Iran war "close to over" amid hopes for more negotiations
Wednesday’s session is being written in real time as one of the defining trading days of 2026, a session where the arithmetic of geopolitics, corporate earnings, and Federal Reserve politics are colliding simultaneously on a tape that is straining toward record territory. The S&P 500 (SPX) is trading at 6,994.95, separated from its all-time intraday high of 7,002.28 — set on January 28 — by fewer than eight points. The Nasdaq Composite (COMP) is extending a winning streak to 11 consecutive sessions, its longest run since November 2021, up 227 points or 1% to 23,867. The Dow Jones Industrial Average (DJIA), carrying the weight of its more cyclical and rate-sensitive composition, is lagging the entire tape, shedding 192 points or 0.40% to 48,343. The Russell 2000 is essentially flat, up just 0.11% at 2,708, which is the small-cap index’s way of telling you that whatever is happening in large-cap technology right now is not a broad economic recovery signal — it is a concentrated repricing of specific risk premiums around war, rates, and artificial intelligence.
The VIX has fallen to 18.01, down 1.91% on the session, sliding below its long-term historical average of just under 20. Wednesday also marks what traders call "Vix-piration," the simultaneous expiration of futures and options contracts tied to the Cboe Volatility Index, an event that typically amplifies intraday moves and can accelerate the compression of implied volatility that is already underway. A VIX at 18 in the middle of an active Middle East military conflict, with oil above $92 a barrel and the Federal Reserve chair facing criminal investigation and potential removal, is a statement about how completely the market has decided to look past near-term uncertainty and position for resolution.
Every point the S&P 500 has gained across nine of the last ten sessions traces back to one underlying thesis — that the U.S.-Iran war ends soon and the Strait of Hormuz reopens. President Trump told Fox Business Wednesday morning that the conflict is "very close to over," a phrase he has used multiple times in recent days with increasing specificity. A White House official confirmed to CNBC that a second round of formal negotiations is under discussion, with the New York Post reporting Trump suggested talks could happen "over the next two days" in Islamabad. Nothing is officially scheduled. No framework has been announced. No terms have leaked. Yet the S&P 500 has retraced the entirety of its Iran war losses in what amounts to a historically compressed recovery timeline.
The mechanics of the recovery matter as much as the speed. Monday’s session alone wiped out every point of S&P 500 decline dating back to when Iranian hostilities began in late February. Tuesday added another 1.18%, the ninth positive session in ten, with the Nasdaq posting 1.96% gains for its tenth consecutive advance. What started as a relief rally has evolved into something that is pricing not just a ceasefire but a durable resolution — and that is where the risk asymmetry becomes concerning. Fox News reported Wednesday morning, citing a senior U.S. official, that the U.S. has yet to formally agree to extend the ceasefire. Eight oil tankers reversed course on direction from U.S. forces. The Strait of Hormuz remains effectively blockaded. The gap between what diplomats are saying and what military operations are doing is substantial, and the market is choosing to price the former while largely ignoring the latter.
Northwestern Mutual Wealth Management’s chief investment officer Brent Schutte captured the tension precisely: "I don’t think we’re done with the conflict yet. I think there are plenty of concerns still out there." The "TACO trade" — Trump Always Chickens Out, a phrase coined by the Financial Times and now used systematically by Fundstrat Research — has returned 3.4% year-to-date through April 13 by buying the S&P 500 at every Friday close and selling at the following Monday close, versus just 0.6% for a simple buy-and-hold approach. The market has learned the pattern. The danger is that patterns break precisely when everyone has positioned for their continuation.
Rystad Energy’s Wednesday morning assessment of Middle East energy infrastructure damage puts the total repair bill at up to $58 billion — a figure that has more than doubled from the $25 billion estimate published just three weeks ago. Of that total, $50 billion is directly attributable to oil and gas infrastructure, covering refineries, processing plants, pipelines, storage facilities, and critical LNG terminals across the Gulf. Seven weeks of air strikes and drone attacks have expanded the scope of destruction well beyond initial assessments.
Brent crude is trading at $95.39, up 0.63% Wednesday. West Texas Intermediate sits at $92.50, up approximately 1%, after volatile overnight trading that saw prices fall sharply before recovering. These prices are consistent with a market that believes a resolution is coming but is not willing to price it as a certainty. The more important figure is what oil looks like the moment ceasefire talks either collapse or succeed — in either direction, the move will be violent. Rystad’s senior supply chain research analyst Karan Satwani noted that the primary repair constraint is not capital availability but the scarce pool of specialized contractors and equipment globally, much of which is already committed to new-build projects that will now face delays. Qatar’s Ras Laffan LNG complex, one of the most strategically critical energy facilities in the world, faces an especially long repair timeline given how specialized its required equipment and labor are. The ripple effects on global energy investment timelines and inflation well beyond the Middle East are, in Rystad’s assessment, potentially as significant as the $58 billion headline itself.
Bank of America (BAC) reported first-quarter earnings of $1.11 per share on revenue of $30.43 billion, against analyst consensus of $1.01 per share and $29.93 billion in revenue. The beat was genuine and broad-based, driven by a record quarter in equities sales and trading, strong investment banking activity, and positive operating leverage across the institutional business. First-quarter profit rose 17% year-over-year. BAC shares are up 1.84% to $54.33, and Wells Fargo analyst Mike Mayo maintained his overweight rating with a $65 price target, citing solid credit performance and sustained momentum in fee-driven businesses.
CEO Brian Moynihan’s consumer spending data from the quarter deserves careful parsing. Debit and credit card spending rose 6% year-over-year across the first quarter — a number that sounds unambiguously healthy until you apply context. Within the categories driving that growth, gas spending in March was up 16% year-over-year. That is not a volume increase. That is a war-driven energy price inflation showing up as nominal spending growth. When you strip the gas contribution from the spending picture, the underlying consumer trajectory is less vigorous than the headline implies. Travel, entertainment, and retail also expanded, which is genuinely positive, but Moynihan himself acknowledged flat deposit growth across the firm and softness in consumer banking as meaningful offsets. The big bank CEO uniform deployment of the word "resilient" to describe the American economy — Moynihan joining JPMorgan’s Jamie Dimon and Wells Fargo’s Charlie Scharf in using identical language — is notable not because it’s wrong but because it’s carefully calibrated. All three CEOs followed their "resilient" characterizations with warnings about the impact of higher oil prices materializing in coming quarters. BAC is a hold at current levels. The capital markets engine is genuinely performing, but the consumer business faces a second-half 2026 test that current valuations don’t fully reflect.
Morgan Stanley (MS) delivered one of the cleaner earnings beats of this cycle, reporting $3.43 in earnings per share on $20.58 billion in revenue against consensus expectations of $3.00 per share and $19.72 billion. Both beats were meaningful — the EPS beat was 14.3% above consensus, the revenue beat was 4.4%. Investment banking surged, equities trading hit record levels, and the firm demonstrated the kind of operating leverage that justifies its premium multiple. MS shares are up 4.46% to $191.51, making it one of the session’s strongest performers among major financials.
The divergence between Morgan Stanley and Bank of America this quarter illustrates a structural dynamic in the financial sector. Morgan Stanley’s business model — built on wealth management, institutional securities, and investment management — is levered to market activity and asset valuations rather than consumer credit and deposit spreads. In a market environment where equities are near all-time highs, IPO activity is accelerating with SpaceX expected to debut at a $1 trillion-plus valuation later this year, and capital markets volumes are running hot on both the buy and sell sides, Morgan Stanley’s revenue mix is essentially perfectly positioned. MS is a buy on any meaningful pullback from Wednesday’s move — the business is executing at a high level, the wealth management franchise provides recurring revenue stability, and the investment banking pipeline should remain robust given the deal backlog that built up during the Iran-driven volatility window.
The iShares Expanded Tech-Software Sector ETF (IGV) is up more than 3% Wednesday and has now gained nearly 10% for the week, staging one of the sharpest short-covering reversals in the software space in recent memory. Last week, IGV fell more than 7% as the launch of Anthropic’s Claude Mythos AI model triggered a sector-wide repricing of SaaS business model durability — a moment when the market decided, briefly, that advanced AI models would disintermediate enterprise software at a speed that warranted immediate multiple compression. This week, the market has largely reversed that judgment, at least on a price basis.
Microsoft (MSFT) is Wednesday’s strongest performer among Dow components, up nearly 4% and now 10% higher for the week. Salesforce (CRM) is up approximately 3%, extending its weekly gain to close to 7%. On the broader S&P 500, Datadog (DDOG) is surging 7% Wednesday and has gained more than 12% for the week. ServiceNow (NOW) is up 6% in Wednesday’s session with weekly gains exceeding 12%. These are not technical bounces at the margin. These are stocks that experienced genuine valuation resets on AI disruption fears and are now being aggressively re-accumulated by investors who concluded the sell-off overshot. The Anthropic valuation itself tells the story — Bloomberg reported Tuesday evening that the company reached an $800 billion valuation from unaccepted investor offers, making the entity that supposedly threatens SaaS one of the most valuable private companies in the history of technology. MSFT and DDOG are buys on any weakness — the AI disruption thesis that crushed them last week is real as a long-term structural force, but the near-term revenue impact was never going to materialize at the speed the market priced in.
Broadcom (AVGO) is the session’s defining semiconductor story, rising 3.5% to $392.02 after announcing an expanded partnership with Meta Platforms (META) to co-develop custom artificial intelligence accelerators at a scale of 1 gigawatt of deployed chips, with explicit plans to scale to multiple gigawatts in future phases, using Broadcom’s technology through 2029. The partnership extends an existing relationship, but the scale of the new commitment is categorically different from what preceded it. The deal is large enough — in revenue and strategic importance — that Broadcom CEO Hock Tan is departing Meta’s board of directors entirely and transitioning to a special advisor role. That governance change is the clearest signal available of how significant this relationship has become for both companies.
Meta shares are up 1.5% Wednesday, adding to Tuesday’s 4.4% gain that made it the strongest Magnificent Seven performer in that session. The strategic logic for Meta is straightforward: by developing custom AI accelerators with Broadcom rather than purchasing merchant silicon from Nvidia (NVDA), Meta gains control over performance specifications, cost curves, and supply chain reliability for its AI data center buildout. For Broadcom, this commitment alongside its existing Google custom chip relationship establishes it as the dominant partner of choice for hyperscaler XPU strategies, creating a multi-year revenue stream of extraordinary visibility. Michael Dell, founder of Dell Technologies (DELL) — whose stock is up nearly 50% year-to-date — said at the Semafor World Economy conference this week that AI demand is growing "much faster than anybody anticipated," with supply cycles structurally unable to keep pace with the demand signal. Broadcom is positioned directly in the widening gap between what hyperscalers need and what the traditional semiconductor supply chain can provide. AVGO is a buy. The custom silicon tailwind is durable, the revenue visibility is exceptional, and the partnership structure with two of the world’s largest technology companies creates a competitive moat that is very difficult to displace.
Nvidia (NVDA) added 88 index points to the Nasdaq Composite on Tuesday — the single largest positive contributor to the index’s 1.96% session gain. Wednesday, Nvidia shares are higher again as part of a broader Magnificent Seven advance that has seen every name in the group move higher except Amazon (AMZN). Meta is up 1.5%. The group’s collective re-acceleration reflects not just the Iran relief trade but a genuine recalibration of AI infrastructure demand expectations following Michael Dell’s comments, Broadcom’s Meta deal, and ASML’s decision to raise its 2026 revenue expectations on the back of accelerating AI-driven chip tool demand. Intel (INTC) remains the notable laggard, contributing negative 9 index points to the Nasdaq on Tuesday — a reminder that the AI semiconductor boom is highly concentrated in specific architectural winners and that legacy chip franchises are not participating in the same way.
Snap (SNAP) is up 9.55% to $6.14 Wednesday, one of the strongest percentage gainers in the entire market, after announcing it will eliminate approximately 1,000 positions — roughly 16% of its total full-time global workforce. CEO Evan Spiegel attributed the decision in part to "rapid advancements in artificial intelligence" enabling teams to reduce repetitive work, increase velocity, and operate with greater efficiency. The company estimates pre-tax restructuring charges of $95 million to $130 million, with the majority of that cost hitting the income statement in Q2 2026.
The financial guidance accompanying the announcement is what justified the stock’s reaction. Snap guided for current-quarter adjusted EBITDA of $233 million against a Wall Street consensus of $186.5 million — a beat of more than 24% on the profitability line. Revenue guidance of $1.529 billion was essentially in line with the $1.525 billion expected, meaning the entire upside is coming from cost structure rather than revenue acceleration. Activist investor Irenic Capital Management, which holds approximately 2.5% of Snap, had been pushing management to streamline operations and exit the augmented reality glasses business. Wednesday’s announcement is a direct response to that pressure. Snap entered Wednesday’s session down 30% year-to-date, and the stock is still deeply below levels that would signal a full business recovery. SNAP is a speculative hold — the efficiency move is overdue and the guidance beat is real, but sustainable re-rating requires top-line revenue momentum that is not yet visible in the numbers.
Robinhood (HOOD) jumped more than 5.5% in premarket trading after the Securities and Exchange Commission announced it will end existing limits on day-trading activity for smaller retail investors — a policy reversal that is a direct revenue catalyst for both Robinhood and Webull, the latter of which surged 6% on the same news. Higher retail trading activity flows directly into payment-for-order-flow revenue, margin lending volumes, and options premium on both platforms. The SEC decision removes a regulatory ceiling that had constrained the addressable activity of the most active segment of both companies’ user bases. HOOD is a buy in this policy environment — the revenue model is levered to exactly the kind of heightened retail engagement that follows a major market recovery narrative like the one currently in progress, and the removal of day-trading restrictions amplifies that dynamic materially.
First Solar (FSLR) jumped more than 4.5% premarket following a Reuters report that China is considering restricting exports of solar power equipment to the United States. China controls approximately 80% of global solar panel manufacturing capacity, which means any restriction on that export flow creates a structural supply gap in the U.S. solar installation market that domestic producers are uniquely positioned to fill. First Solar is the only major U.S.-based manufacturer of thin-film cadmium telluride solar modules at commercial scale, making it the single most direct beneficiary of any China export limitation. FSLR is a buy on any confirmation of the restriction — the policy tailwind would be durable, difficult to reverse quickly, and would fundamentally improve First Solar’s pricing power and backlog visibility for multiple years.
Oracle (ORCL) has been the single best-performing stock in the S&P 500 this week, gaining 18% since Monday’s open across a combination of catalysts that have collectively repositioned the company in the market’s mind from legacy enterprise database vendor to core AI infrastructure operator. Monday’s 13% single-session surge followed the announcement of an expanded partnership with Bloom Energy (BE) to provide power for Oracle’s rapidly expanding data center network — a deal that addresses the single largest constraint on AI infrastructure buildout, which is reliable electricity supply. Tuesday, Oracle added close to 5% after announcing a new suite of agentic AI products. The company is now directly competing in the AI application and orchestration layer while simultaneously building out the cloud infrastructure beneath it. ORCL is a hold at current prices following an 18% weekly move — the re-rating from legacy software to AI infrastructure is justified and overdue, but the pace of the move creates near-term profit-taking risk. A pullback toward the weekly open represents a significantly more favorable risk-adjusted entry point.
President Trump renewed his threat to fire Federal Reserve Chair Jerome Powell in a Wednesday morning Fox Business interview, stating directly: "Then I’ll have to fire him. If he’s not leaving on time — I’ve held back firing him. I’ve wanted to fire him, but I hate to be controversial." The confrontation centers on Powell’s stated refusal to resign from his role as a Fed governor — a position that runs through January 2028 — until the Department of Justice drops its criminal investigation into alleged cost overruns in the renovation of the Federal Reserve’s headquarters building, a project Trump characterized as potentially costing "more than $3 billion." Trump has explicitly directed the Justice Department to continue the probe and says he will not drop it.
The political and legal complexity of this situation is significant. Powell’s term as Fed chair ends in May. Trump’s nominee to lead the Fed, Kevin Warsh, is set to begin Senate confirmation hearings this month, but Senator Thom Tillis of North Carolina — a member of the Senate Banking Committee — has stated publicly he will not vote to confirm any Fed chair nominee until the DOJ probe against Powell is dropped. Trump responded to that by effectively warning Tillis to act like "an American" and do the right thing. The Supreme Court is currently weighing the limits of presidential authority to remove federal officials in a separate but directly relevant case, and its ruling will determine whether any Trump attempt to fire Powell as a governor — not just as chair — is legally executable. The 10-year Treasury yield rose to 4.287% Wednesday from Tuesday’s close above 4.25%, reflecting the ongoing premium the bond market is assigning to Fed independence risk. This is not a resolved situation, and any escalation — particularly if the Supreme Court signals it would uphold removal authority — would be one of the most significant macro events for U.S. rates in decades.
UBS strategists published a significant piece Wednesday arguing that the reliable safe-haven playbook has fundamentally broken down in the current environment. Using a composite risk index spanning equity, rates, and credit volatility, the bank identified two distinct risk-off episodes over the past two years: a tariff-driven selloff in early 2025 and the current Iran oil shock. The conclusion is stark — the assets that protected portfolios during the 2025 tariff episode, specifically gold, the Japanese yen, the euro, and government bonds including U.S. Treasuries and German Bunds, failed to provide consistent protection during the 2026 oil shock. Conversely, the assets that performed well during the oil shock, including broad commodity exposure and the trade-weighted dollar, did little to offset the 2025 drawdowns. Gold is down 0.50% Wednesday to $4,826. Bitcoin is off 2.11% to $73,768. Neither is performing a safe-haven function in the current session. The U.S. dollar index stands at 95.11, down 0.07%. UBS’s conclusion — that the dollar remains the closest thing to a consistent refuge, though even its signal is partly distorted by positioning rather than pure safe-haven demand — reinforces the argument that traditional portfolio construction assumptions are under fundamental stress.
Two consecutive soft inflation readings have bought the Federal Reserve meaningful breathing room. Producer prices in March rose just 0.5% — less than half the 1.1% Dow Jones consensus estimate — signaling that the war’s inflationary impulse through energy costs has not yet fully transmitted into the production pipeline. Import prices rose 0.8% in March against an expectation of 2.4% — another indication that the worst-case scenario of rapid oil-driven price acceleration is being deferred rather than avoided. The Empire State Manufacturing Survey showed activity expanding in April, contrary to a consensus forecast for contraction. Taken together, these data points give Powell the cover to hold his current rate stance without the bond market pricing in emergency hikes, while simultaneously preventing him from signaling cuts in an environment where oil remains above $92 and the war is unresolved. The Fed’s Beige Book — due at 2 p.m. Eastern Wednesday — will be watched closely for any regional signals of consumer stress or business confidence erosion that the big bank earnings haven’t already surfaced.