S&P 500 Closes at Record High of 7,023 as Iran War Concerns Ease

The S&P 500 (^GSPC) closed at a fresh record high on Wednesday, finishing at 7,022.95 after rising 55.57 points, or 0.8%, as investors looked past the latest Iran war concerns and returned to risk assets. The benchmark also touched a new intraday high of 7,026.24, underlining how sharply sentiment has turned since the late-March selloff that briefly pushed major US indexes toward correction territory.

The rally extended beyond the S&P 500. The Nasdaq Composite (^IXIC) climbed 377.16 points, or 1.59%, to close at 24,016.02, another record finish and its longest winning streak in years, with the tech-heavy index posting 10 straight sessions of gains. By contrast, the Dow Jones Industrial Average (^DJI) slipped 72.27 points, or 0.15%, ending at 48,463.72. The split performance showed where investors were placing their bets: growth, earnings momentum and big-cap leadership rather than a broad, defensive rotation.

That marks a notable reversal from the market mood seen after the conflict intensified on February 28. At its low point during the war-driven selloff, the S&P 500 had fallen by nearly 9%, narrowly avoiding the 10% decline that typically defines a correction. The Nasdaq and the Dow both moved deep enough into pullback territory to remind investors how quickly geopolitical shocks can ripple through equities, oil and inflation expectations.

Wall Street turns back to earnings and resilience

What changed was not the disappearance of risk, but the market’s judgment that the worst-case scenario may be avoided. Traders have increasingly leaned into the view that any disruption tied to the Iran conflict could prove temporary, especially if diplomacy keeps advancing and if energy flows through the Strait of Hormuz avoid a prolonged breakdown. That shift in expectations allowed investors to refocus on corporate earnings, which have so far offered a steadier backdrop than many had feared when oil markets first convulsed.

Analysts now expect S&P 500 companies to generate combined first-quarter earnings of about $605.1 billion, up from an earlier forecast of $598.7 billion. That upward revision has mattered because it suggests the earnings picture has improved rather than deteriorated during a period of geopolitical strain, hotter inflation and higher fuel costs. For investors, the message is simple: if profits hold up, equities can absorb more macro uncertainty than the headlines alone would suggest.

Big banks helped reinforce that view. Bank of America (BAC) reported first-quarter profit of $8.6 billion, up 17% from a year earlier, while Morgan Stanley (MS) also delivered better-than-expected quarterly results. Those numbers strengthened the broader idea that the US consumer remains resilient and that trading, wealth management and deal activity have not stalled in the face of oil-price volatility. Investors took those updates as a sign that corporate America is still generating enough momentum to keep the bull case alive.

Oil shock fades, but it has not disappeared

Markets are not ignoring the economic damage entirely. The war has already fed through to higher gasoline prices and a hotter inflation backdrop, reviving questions about the path of US interest rates. Oil remains central to that debate. Even though crude volatility has eased from the worst of the panic, traders continue to watch the Strait of Hormuz closely because it remains one of the world’s most important energy chokepoints. Any renewed disruption there could quickly reprice inflation risk across equities, bonds and currencies.

Still, Wednesday’s price action suggested that investors see the oil shock as severe but manageable. Rather than treating the conflict as the start of a prolonged market break, Wall Street has begun to trade it as a risk event that may fade faster than first feared. That view was helped by political messaging that the war could wind down sooner than expected, even if no investor is yet ready to declare the issue fully resolved.

For now, that has been enough to support a surprisingly durable rally. From the late-March weakness to Wednesday’s close above 7,000, the S&P 500 has effectively erased its conflict-driven losses and reset the conversation around records, not retreat. Investors who bought during the selloff have been rewarded, while those waiting for a deeper breakdown have had to chase a market that keeps proving more resilient than the macro backdrop might imply.

There are still clear fault lines beneath the surface. A renewed flare-up in the Iran conflict, a fresh jump in oil, or a sharper inflation impulse could test this recovery quickly. But with the S&P 500 at 7,022.95, the Nasdaq at 24,016.02, and the Dow holding near 48,463.72, Wall Street’s message at the close was unmistakable: investors are willing to keep buying as long as earnings stay firm and the geopolitical damage looks containable. For wider market context, follow Reuters markets coverage.