By Martin Baccardax

U.S. stocks extended their impressive weeks-long rally on Friday, driving both the S&P 500 and the Nasdaq to fresh record highs, as President Donald Trump confirmed the opening of the Strait of Hormuz to commercial shipping traffic and hinted that the weeks-long conflict would soon be over.

Conflict in the Gulf region remains difficult to predict, but suggestions from both the president and high-ranking officials in Iran indicate that the two sides are close to an agreement that would both keep the Straight open to all commercial traffic and put to rest one of the key U.S. adversaries in the broader Middle East region.

"This is a significant and necessary step towards reopening the Strait and, potentially, ending the war," said James Reilly, senior markets economist at Capital Economics. "It moves developments closer to our baseline scenario for the conflict, which envisages an end to hostilities and a normalization of shipping by the end of this month."

Global oil prices were in freefall, with Brent contracts for June delivery tumbling more than 13% to change hands at $83.37 a barrel, the lowest since March 5. WTI contracts for June, meanwhile, fell 10.4% to trade at $79.29 per barrel, the lowest since March 4.

Stocks, meanwhile, continued to hit fresh record highs, with the S&P 500 rising more than 4.8% on the week and the Nasdaq riding impressive gains for the so-called Magnificent Seven tech giants to rise more than 400 points and trade well north of the 24,000 level, extending its longest winning streak since 1992.

And there could be more gains on the cards ahead, according to Fundstrat's Tom Lee.

"We believe there is still a lot of 'fuel in the tank', given that retail investors appear caught offsides on this V-shaped rally," he said. "By contrast, we believe institutional investors caught this V-shape rally more correctly, with many adding since mid-March and essentially 'legging into the low'".

Broader market data would seem to confirm that view, as trading volumes for the S&P 500 spiked quickly after the rally began on March 30, to more than 3.4 billion shares changing hands, before moderating by around 15% to 2.93 billion into the end of this week.

That suggests that while Wall Street's largest investors continue to bet on a sustained market rally, retail investors remained bearish into the close of last week.

Data from the American Association of Individual Investors seems to confirm that view, with the latest reading from April 15 showing 68.3% of respondents remaining "neutral or bearish" on stocks over the next six months.

That seems to have changed dramatically since then, however, with the S&P 500 gaining more than 310 points since last Friday's close and more than 2.4% since the April 14 close. That puts the benchmark on pace for its best monthly gain since 2020.

"There can be little doubt that investors and traders alike are responding to a 'fear of missing out' as the indices storm past old records highs," said David Morrison, senior market analyst at Trade Nation.

"After all, this 'buy the dip' strategy, if you can call it that, has proved consistently profitable since October 2022," he added. "All sell-offs have been remarkably short-lived, as market participants have looked past problematic issues and set their eyes on the dreamy uplands of U.S. exceptionalism."

So where are markets heading next? Higher, it would seem.

The first-quarter earnings season kicks into full gear on Tuesday, with a host of updates in the tech, industrial, and manufacturing sectors that are likely to build on Wall Street's current forecast of a 14.4% gain and a bottom-line tally of $607.6 billion.

That's about $9 billion higher than earlier forecasts, and likely to rise higher into the end of the month, as investors eye updates from Microsoft, Meta Platforms, Alphabet, and Apple later this month, as well as the Federal Reserve's April policy meeting slated to end on April 29.

"The bombs aren't dropping, and earnings have been on fire and the economy's resilience has been phenomenal," Ed Yardeni, president of Yardeni Research, told Bloomberg Television on Friday. "The war isn't over, and it may take months for a cease-fire, but analysts haven't got the war memo that this will be a concern for earnings anytime soon."

Write to Martin Baccardax at martin.baccardax@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 17, 2026 14:40 ET (18:40 GMT)

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