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The S&P 500 surged to a new all-time high on Wednesday, as investors shrug off the hottest inflation in nearly two years and ongoing concerns about the economic impact of the Iran war.
The broad-based index climbed 56 points, or 0.8%, to close at 7,023, topping its previous high of 6,979 on January 27. The Nasdaq Composite Index also ended in record terrain, jumping 377 points, or 1.6%, to 24,016, eclipsing its previous record of 23,958 in October 2025. The Nasdaq has seen 10 consecutive days of gains, its longest streak since 2021, Mark Hackett, chief market strategist for Nationwide, said in an email.
The Dow Jones Industrial Average dropped 72 points, or 0.2%.
The rally marks a sharp reversal from late March, when the Dow fell into correction territory — a drop of at least 10% from its recent high — after five straight weeks of losses, underscoring how quickly investor sentiment has shifted.
Although the war has taken a toll on the U.S. economy, driving up gasoline prices and boosting inflation, the stock market has shown resilience, fueled by investor optimism that the conflict in the Middle East will eventually blow over.
Don’t mention the war
Despite the U.S. this week imposing a blockade of Iranian ports, the prevailing view on Wall Street is that the conflict is likely to de-escalate, equity analyst Adam Crisafulli, head of Vital Knowledge, told CBS News.
“I feel like it’s becoming the consensus view that this will be resolved, in which case the current impact from it, the economic fallout, will be brief,” he said.
In a Fox News interview on Wednesday, President Trump said the fighting in Iran is “very close to over.”
Scott Wren, senior global market strategist for Wells Fargo Investment Institute, expects the Middle East conflict to continue for weeks, not months. Investors are betting that the Strait of Hormuz, the vital chokepoint for global oil and other commodities, will reopen soon, he added.
Wells Fargo projects the broad-based stock index will reach 7,400 to 7,600 points by year-end, according to Wren.
Strong earnings boost sentiment
Strong corporate earnings have also helped buoy investor sentiment.
“Markets have absorbed a surge in oil prices and ongoing geopolitical strain without derailing earnings expectations,” Nigel Green, the CEO of the financial firm the deVere Group, said in an email.
Bank of America on Wednesday reported first-quarter profits of $8.6 billion, up 17% from the year-ago period. Morgan Stanley also delivered better-than-expected quarterly results on Wednesday.
“It’s definitely been encouraging to hear Bank of America, Wells Fargo, JPMorgan, all of them saying that the underlying economy, the economic activity on the consumer and on the corporate front, has been pretty resilient,” Crisafulli said.
Tech heavy hitters, including Alphabet, Amazon, Apple and Microsoft, are scheduled to report their earnings next week, which could prove to be another tailwind for stocks.
In addition to strong corporate earnings, Wren pointed to strong corporate investment in artificial intelligence, larger tax refunds and low unemployment as positive signals for investors.
“You’ve got some really good underlying fundamentals going on,” he said.
