The S&P 500 and Nasdaq Just Hit All-Time Highs While a War Is Still Raging — Here’s What Wall Street Is Betting On

Apr 16, 2026 - 14:00

Brief Analysis

As of April 15, 2026, the S&P 500 closed at a record 7,022.95 and the Nasdaq hit 24,016 — all-time highs for both indices — completing one of the fastest market recoveries in modern history, with the S&P recovering over 11% in two weeks after falling nearly 10% when the Iran war began. The rebound has been faster than the post-Covid bounce of 2020 and the Liberation Day recovery of 2025, a statistic that raises serious questions about whether markets are pricing in peace or simply refusing to price in the alternative. The Strait of Hormuz remains closed to most shipping, oil is still trading above $90 a barrel, and the ceasefire is fragile — yet the Nasdaq has posted 11 consecutive days of gains, its longest winning streak since 2021.

EBM Exclusive Take

The divergence between US and European equity markets is the most instructive signal in global finance right now. While the S&P 500 and Nasdaq sprint to all-time highs, the Euro Stoxx 50, DAX and FTSE 100 remain significantly below their own records from earlier this year, their rallies visibly losing momentum. European investors are exercising caution that their American counterparts have abandoned entirely. Whether that caution proves wise or simply costly depends on one variable: whether the Iran ceasefire holds long enough for a peace deal to materialise. Washington and Tehran are reported to have an in-principle agreement to extend the ceasefire for further diplomacy — but the Strait of Hormuz is still blocked, and Trump has moved his own deadlines multiple times already. Wall Street is betting on the optimistic scenario. Europe is not yet convinced.

The Numbers Behind the Record

Wednesday’s close was not a marginal new high. The S&P 500 surpassed its previous record of 6,979 set on January 27 — before the war began — and the Nasdaq eclipsed its October 2025 peak of 23,958. The rally has been broad-based: Bank of America reported first-quarter profits of $8.6 billion, up 17% year-on-year. Morgan Stanley jumped 4.5% after delivering better-than-expected results. The Magnificent Seven and semiconductor stocks have driven the charge, repeating the buy-the-dip pattern that has rewarded investors consistently since October 2022.

The speed of the recovery is striking. Deutsche Bank macro strategist Henry Allen noted the S&P gained 9.8% in just ten trading sessions — faster than any comparable bounce since the post-Covid rebound in April 2020.

Asia Follows, Europe Hesitates

Asian markets moved in lockstep with Wall Street’s optimism. Japan’s Nikkei surged 2.4% to a record close of its own. South Korea’s Kospi added 2.2%. Hong Kong’s Hang Seng climbed 1.6%. China delivered mixed signals — first-quarter GDP grew 5.0% annualised, beating expectations, but retail sales and fixed asset investment disappointed and unemployment ticked higher.

European indices opened firmer but could not sustain momentum. The Euro Stoxx 50 and DAX — both still well below their 2026 peaks — appear to be running out of rally fuel while their US counterparts post fresh records daily. The gap between the two is widening and is becoming a structural story, not a temporary lag.

Oil, Gold and the Reality Check

The commodity markets are telling a different story to equities. Brent crude settled at $94.93 a barrel on Wednesday — still approximately 35% above its pre-war level of around $70. Front-month WTI remains below $90 but the forward curve continues to show backwardation, signalling that traders still see near-term supply constraints as real and persistent.

Gold hit a near month-long high of $4,870 earlier in the week before pulling back below $4,800 as dollar strength reasserted itself. Silver is testing $80 per ounce but has failed to hold above it on multiple attempts this week. Both metals are reflecting the same tension visible across all markets: optimism about a peace deal pulling one way, the physical reality of a still-blocked strait pulling the other.

Bitcoin Consolidates

Bitcoin continues to consolidate around $75,000, up from approximately $65,000 at the end of March. Unlike previous cycles, Bitcoin and Ethereum are not moving in close correlation with tech stocks or the dollar — a sign of maturing market behaviour that institutional players appear comfortable with, given BlackRock’s $780 million crypto buying spree last week.

The Risk No One Is Pricing

Wells Fargo projects the S&P 500 reaching 7,400–7,600 by year-end. That is achievable if the war ends and Hormuz reopens on schedule. But Trump has extended his own war-related deadlines repeatedly, the latest ceasefire expires next Wednesday, and 20% of global crude, LNG, fertiliser and helium supply remains offline. Prices don’t move in straight lines — and neither do wars.

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