TradingKey - At the U.S. market close on April 14, the Nasdaq completed a 10-day winning streak, marking its longest since 2021; NVIDIA (NVDA) , AMD also recorded 10-day winning streaks. The S&P 500 has erased all its losses since the conflict in Iran, rising nearly 10% cumulatively since March 27, while the Nasdaq's gain reached 12%.

On the same day, Micron (MU) surged 9% to a new closing high, leading the U.S. chip sector. The Philadelphia Semiconductor Index rose 2.04% to a fresh record high, while TSMC (TSM) , ARM rose more than 2%.

On the news front, Trump suggested in an interview on Tuesday that the war is over and that the U.S. and Iran could return to the negotiating table in Pakistan. According to Iranian media reports, U.S. and Iranian delegations may resume negotiations later this week.

Does the recent broad multi-day rally signal the return of the U.S. bull market? Can Micron continue to lead chip stocks and become the best-performing stock this fiscal quarter?

Ongoing Conflict: Why Are US Stocks Declaring Victory Prematurely?

Goldman Sachs (GS) Rich Privorotky, head of Delta One trading, noted that although the conflict itself has not truly ended, the market seems to have already declared victory. Privorotky further explained that while it may be premature to declare victory in the war now, the stock market clearly believes the situation has stabilized.

Goldman Sachs strategist Chris Hussey stated that as forward-looking instruments, the market cannot afford to continue waiting for the outcome of the war—they know it will eventually be resolved. This psychology explains market behavior and why U.S. stocks have resumed their rally.

Doug Peta, Chief U.S. Investment Strategist at BCA Research, noted that market logic may have shifted, stating, "The stock market and even the broader financial market seem to no longer care much about the situation in the Strait of Hormuz."

Corporate earnings support chip stock rally.

In this rally, the Magnificent Seven (Mag 7) have surged a cumulative 15% over the past 10 trading days, and the chip sector has also performed excellently. Bloomberg data shows that earnings expectations for the chip sector jumped about 10% within three trading days, providing a significant boost to the overall S&P 500 EPS forecast. Goldman Sachs data indicates that Nvidia and Micron are expected to contribute more than 50% of the S&P 500's EPS growth this quarter. Earnings for chip stocks will continue to support their rally.

Furthermore, market liquidity has returned to normal. Goldman Sachs data shows that top-of-book liquidity for S&P 500 constituents has rebounded from approximately $3.5 million at the peak of uncertainty to the current $13.16 million, a 141% increase over the 20-day average.

Looking at market turnover, ETF volume as a percentage of total market volume has declined significantly, falling from a peak of approximately 50% to 29%, reflecting an improvement in market risk appetite.

As earnings season begins, the U.S. stock market is expected to remain buoyant. This week, Wall Street investment banks led the way in reporting earnings; the banking sector's performance is typically viewed as a bellwether for the overall health of the U.S. economy. Based on the reports released, Goldman Sachs and JPMorgan Chase (JPM) both benefited from stellar performance in their trading and investment banking businesses this quarter.

Goldman Sachs' Chris Hussey noted that despite concerns over inflation, AI, private credit, and consumer spending, the condition of households and businesses remains robust, providing partial support for the banking sector's performance.

Investment Bank Sets $600 Price Target as Micron Leads Memory Stocks into Supercycle

Although Micron's share price touched a recent low of $318 on March 30, nearly erasing its year-to-date gains, it has since climbed to new highs. KeyBanc remains bullish on its outlook, noting that the stock still has upside potential following the earnings release.

KeyBanc analyst John Vinh pointed out in a recent report that Micron is one of the most attractive investment targets in the chip sector regarding its risk-reward ratio, maintaining an "Overweight" rating and a $600 price target.

Vinh estimates that revenue for the current quarter will reach $35.1 billion, exceeding market consensus; earnings per share are expected to reach $20.54, also outperforming market expectations, signaling continued strong earnings momentum for the company.

Regarding the overall industry, the analyst noted that the rapid expansion of AI applications has driven explosive demand for HBM (High Bandwidth Memory), resulting in a market-wide supply shortage. This supply-demand imbalance is expected to persist until around 2027, during which prices will continue to rise. Memory prices in the second quarter of this year are projected to increase by 30%-50% quarter-over-quarter, providing powerful momentum for the rally in memory stocks.

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