The 3 forces that drove a remarkable, record-setting week on Wall Street

Stocks soared to record highs last week as hopes for a peace deal with Iran fueled investor optimism. The S & P 500 closed above 7,100 for the first time, while the Nasdaq completed its longest winning streak since 1992, with 13 consecutive days of gains. The S & P 500 surged 4%, the Nasdaq rose 6%, and the Dow Jones Industrial Average increased 1.7% for the week.

The rapid turnaround in the stock market was notable, as the S & P 500 went from near correction territory (down about 9% from its all-time high) to hitting a new all-time high in just 11 trading days. This swift move to record levels from a significant bottom had not been seen since at least 1990.

Investors were primarily buoyed by the expectation of a resolution to the Iran-U.S. conflict. Additionally, strong bank earnings and a rebound in the software sector contributed to the market rally. Software stocks, which had been under pressure earlier in the year due to fears of competition from artificial intelligence startups, saw a resurgence. Companies like Microsoft, CrowdStrike, and Salesforce were among the top gainers.

Bank earnings provided further evidence of a resilient consumer base, despite market volatility driven by geopolitical tensions. JPMorgan reported growth in consumer spending above previous levels, with credit card spending volume increasing by 9% year over year. Wells Fargo also saw promising trends in its credit card business, with a significant rise in new account openings.

While the overall market sentiment was positive, some caution was warranted. Wells Fargo’s revenue miss in the first quarter led to a downgrade by the CNBC Investing Club. However, other major banks like Goldman Sachs, Bank of America, JPMorgan, and Morgan Stanley outperformed expectations, with Goldman Sachs particularly highlighted for its strong dealmaking business.

Overall, the outlook for the stock market remained positive, with potential for further gains if the peace negotiations with Iran continue to progress. Investors were advised to monitor developments closely and consider opportunities in sectors that had previously been under pressure.