By Martin Baccardax

U.S. stocks are trending near all-time highs again Tuesday, powered by a massive retreat in energy prices tied to bets on a peaceful conclusion to the war with Iran and a surge in mega cap tech names that has helped add more than $4 trillion in market values to the S&P 500.

But investors seem reluctant to add more cash to the mix, and instead are focused on the final days of a two-week truce between Washington and Tehran that is likely to bring a peaceful conclusion to the seven-week war or stoke an acceleration of U.S. military might that could damage the region for years.

Stocks were largely negative on Monday, with the S&P 500 closing around 17 points south of Friday's record high, a move that still leaves the index up about 12% from its March 30 low and more than 3.3% higher than before the first attacks on Iran at the end of February.

Stock futures are broadly positive on Tuesday, however, with pullbacks expected in global oil prices, Treasury bond yields, and the VIX market volatility index.

President Donald Trump has said he has no plans to extend the current cease-fire, which is set to expire on Wednesday evening, adding that issues tied to the reopening of the Strait of Hormuz and Iran's nuclear ambitions remain unresolved. Iran, meanwhile, has yet to confirm its attendance at the next round of peace talks in Islamabad, and continues to maintain control of the strait in the meantime.

"Both Washington and Tehran understand that oil prices, equity markets, and bond yields are pressure points, and both sides have demonstrated a willingness to move them through statements, clarifications, and retractions in rapid succession," said Mark Malek, chief investment officer at Siebert Financial.

"That is not a market you want to be chasing," he added. "This is a market you want to be watching, carefully, with dry powder in hand and discipline at the ready."

Chasing, at this point, does seem sensible, however, given that the S&P 500 has found its first breakout move since January over the past ten days, with oil prices retreating and tech stocks powering the index's broader gains.

The three major tech-focused sectors -- information technology, consumer discretionary, and communications services -- have all booked solid gains over the past five days and have led the market higher since its March 30 nadir.

"AI is once again moving back to the forefront as a defining theme of this bull market." said Keith Lerner, chief investment officer at Truist Wealth. "While the sector appears extended over the very short term, upside potential remains following the sharpest contraction in valuations seen this decade."

The broader market will play catch-up today, and for the remainder of the week, with the first of around 94 S&P 500 companies expected to report earnings this week, including GE Aerospace, 3M and DR Horton.

S&P 500 earnings are now expected to rise more than 14.4% from last year to just under $608 billion for the March quarter, with collective profits for the three months ending in June pegged to grow more than 20% from last year to just under $680 billion.

That profit potential, set against the market's significant spring pullback, sets up the potential for a run toward Wall Street's target of around 7500 for the S&P 500 well before the end of the year.

JPMorgan, in fact, lifted its end of year target to 7600 on Tuesday, citing tech earnings and the broader AI tailwind.

"The market has flipped the script," said Jay Woods, chief market strategist at Freedom Capital Markets. "The S&P 500 never hit official correction territory even as sentiment hit all-time lows. The technician in me was waiting for that flush out in price and it never really happened."

"Now we have a major breakout and series of gaps that may assist traders in monitoring risk," he added. "The bulls are back in charge and dips should be bought."

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 21, 2026 07:26 ET (11:26 GMT)

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