By Jack Pitcher and Jared Mitovich

Never mind that one of the world's most-important energy chokepoints remains closed. Markets are roaring back anyway.

Oil prices have retreated. Wall Street banks just posted blockbuster earnings. And CEOs are touting the strength of the U.S. economy. That combination has stocks back on the brink of records and some investors thinking a strong earnings season could power them even higher.

The good vibes mark a stark reversal from the malaise that dragged shares lower after fighting began at the end of February. The prospect of a peace deal that reopens the Strait of Hormuz has now powered the Nasdaq composite to its longest streak of daily gains since November 2021 -- a 10-session ascent that has lifted the tech-heavy index 14%. The S&P 500 has erased its wartime losses and climbed 1.2% Tuesday to within 0.2% of its Jan. 27 record.

War worries haven't gone away. The Dow Jones Industrial Average's energy-hungry components have the blue-chip index lagging behind other major benchmarks, on Tuesday notching a 0.7% gain. But with the nation's largest banks reporting that consumers continue to borrow and spend, many think that the prospect for strong corporate earnings can outweigh the risks of a war-fueled slowdown.

"It's unbelievable. The market only seems to care that the Strait will be open in the future," said Brad Conger, chief investment officer at Hirtle Callaghan. "Because in the short run, the longer this extends, the greater the impact."

Tech has been a major beneficiary of the shift. A computing-power arms race among the biggest artificial-intelligence companies is driving huge demand for hardware like chips, servers and memory, and minting big winners in the stock market.

Shares of flash-memory maker Sandisk have quadrupled this year. Intel, left for dead by investors as recently as last year, has jumped more than 50% in the past nine sessions after announcing a series of new chip-making partnerships. Even software, a sector many fear is ripe for disruption by new AI tools, has rebounded in recent sessions.

"Tech has been the real star in this recovery," said Louis Navellier, founder of Navellier & Associates. "The AI narrative is alive and well."

And as first-quarter earnings season kicked off with Wall Street results this week, there was little indication the war had hurt results at some of the nation's biggest financial firms.

The market volatility has been a boon for trading desks. Goldman Sachs and JPMorgan Chase both posted record quarters for trading revenue. Combined with Citigroup and Wells Fargo, the group's total trading revenues were up 16% from a year earlier. JPMorgan shares fell 0.8%. Goldman added 2.1%.

"Despite all of the various types of volatility we've seen over the last quarter, in the last number of years, where markets go up and markets go down and clients lever up and clients lever down, there still is a tremendous amount of demand from clients for us to step in and support them with financing," said Denis Coleman, Goldman's finance chief.

At the same time, the quarter wasn't so volatile that CEOs were scared away from deals, leading to a surge in mergers and acquisitions. Fees on advisory work were up more than 80% from last year for both Goldman and JPMorgan, the biggest deal banks.

BlackRock, the world's largest investment firm, just posted "one of the strongest starts to a year" in the firm's history, Chief Executive Larry Fink told investors Tuesday. The asset manager brought in $130 billion in new money from clients and shrugged off concerns about trouble in the private-credit markets, reporting net inflows in that business, too.

Investors and bank executives acknowledged that markets still face a litany of war-related risks.

Benchmark U.S. crude futures fell 7.9% Tuesday to close at $91.28 a barrel -- down roughly 20% from last week's highs, but still elevated by historic standards. A rekindled conflict and sustained increase in oil prices could slow growth and lift inflation, pressuring consumers and businesses.

Even strong earnings from the tech giants that carried markets higher in recent years could still disappoint investors, and this year's worries about AI disruptions could return once the fighting ends. Analysts are projecting a sixth-straight quarter of double-digit earnings growth, according to FactSet.

Still, many are hopeful that U.S. growth will prove strong enough to shake off the burden of higher energy prices.

Hilton Chief Executive Christopher Nassetta said the hotel giant is seeing higher demand for its middle-market brands, following a period where higher-end hotels had performed well and everything else lagged behind.

"It became sort of obvious to me that if you lifted up above the noise in Washington and the geopolitical things that were going on, that there were some really, really good macro trends that were building blocks to serious improvement in the economy," Nassetta told an audience at the Semafor World Economy conference.

At the same conference, Kurt Björklund, executive chairman of private-equity firm Permira, stressed the long-term resilience of the U.S.

"Any bet against the U.S. economy long term, in my experience, is always wrong," he said.

Write to Jack Pitcher at jack.pitcher@wsj.com and Jared Mitovich at jared.mitovich@wsj.com

(END) Dow Jones Newswires

April 14, 2026 20:00 ET (00:00 GMT)

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