Stock market today: S&P 500 closes above 7,000 for first time, Nasdaq hits record as stocks erase Iran war losses

The S&P 500 (^GSPC) pushed above 7,000 on Wednesday, while the Nasdaq Composite (^IXIC) notched another all-time high as investors shifted back into risk assets.

Optimism over peace talks between the US and Iran sent oil prices lower and stocks higher, with the S&P 500 and Nasdaq erasing war-tied losses.

The gains were led by megacap tech stocks, with Microsoft (MSFT) surging 4% and Tesla (TSLA) rising 8%.

The Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, closed down 0.1%.

The S&P 500 on Wednesday surged to a record high, its first since late January.

And in what’s been a complex environment, the catalyst is fairly straightforward — investors think the worst of the US-Iran war is over.

Steve Sosnick, chief strategist at Interactive Brokers, wrote in a note on Wednesday the two-week rally that has sent stocks back to record levels shows that, “stocks are basically expressing their view that the war in the Persian Gulf is all but over.”

Noting the market’s measured response to President Trump’s latest suggestions earlier in the day that a deal with Iran was close to being done, Sosnick added: “Frankly, the market’s response to reports of an imminent deal is quite similar to traders’ motivations to buy dips and chase rallies.

“If something is working, why shouldn’t people keep doing it?  If stocks rally on a report that a deal is imminent, why wouldn’t that continue? At this point, it’s not necessary to get a deal, only to receive continued reassurance that one is just around the corner.”

“Right now, it’s not about whether there is actual progress in the peace talks, it’s about whether we can reasonably hope that there might be progress in the peace talks,” Sosnick added.

“Vibes are more powerful than reality.  And that’s reason enough for the rally to proceed apace, at least for now.”

The S&P 500 (^GSPC) just sprinted into rare territory.

Since 1962, the index has logged a 10% gain in 11 trading days only 23 times. The historical takeaway is encouraging, but not in the way traders might expect.

The typical short-term returns are modest — median gains of 1% after one week, 2% after one month, and 7% after three months — while the setup has tended to look much better with time, with median gains rising to 12% after six months, 20% after one year, and 35% after two years.

What makes the current episode more interesting is where it happened.

Most of these historical signals came after deeper drawdowns — not back near the highs. In this case, the S&P 500 is already near a record high, leaving only three close historical comparisons in the data: October 1982, March 2000, and November 2020.

Bottom line: This is not a clean all-clear. Two of those cases led to strong follow-through. One marked a major multiyear top.

On Monday, the S&P 500 (^GSPC) erased its Iran war premium.

Today, it has erased its entire 9% decline in only 11 trading days, and notched its first intraday all-time high since Jan. 28.

Under the hood, the rebound has been led by growth. Tech (XLK) and consumer discretionary (XLY) are the only sectors outperforming the broader market, and both are up by double digits. Communication services (XLC) also stands out, up 9%, meaning the three leading sectors are also the ones that house all of the “Magnificent Seven” stocks.

The laggards are mostly defensive groups. Energy (XLE) is the clear outlier, down nearly 10% over the last 11 days. Consumer staples (XLP) is slightly negative, while utilities (XLU) and healthcare (XLV) are up only modestly.

Robinhood (HOOD) stock jumped 8% on Wednesday, extending gains from the prior session after the Securities and Exchange Commission (SEC) announced the removal of long-standing day trading limits for small investors.

The SEC approved removing a $25,000 minimum asset balance requirement for day traders. Instead, the new framework allows investors of all account sizes to trade more freely as long as they have enough money to cover the risk of each trade.

“This is unequivocally bullish for Robinhood, in my view,” Sean Farrell, head of digital assets at Fundstrat, said on Tuesday night.

Farrell noted Robinhood will benefit from the rule change, given that the average account balance for its users is much smaller than that of traditional brokerage firms.

Read more here.

Allbirds (BIRD) stock is soaring on Wednesday after the company announced it’s switching from being a sneaker business to an artificial intelligence company.

The stock jumped as high as $23 per share and is now trading around $17, a far cry from its price of less than $3 just days ago.

The company plans to change its name to NewBird AI and raise $50 million, with the funds expected to close during the second quarter of 2026.

In late March, Allbirds sold its footwear assets to American Exchange Group, the company behind Aerosoles and Ed Hardy, for $39 million.

NewBird AI will aim to “acquire high-performance, low-latency AI compute hardware” and “provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service,” the company said in a press release.

Essentially, the company is looking to jump on the AI bandwagon, providing high-performance AI chips and data center space.

“The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet,” the company said in the release.

Allbirds launched 10 years ago and went public in 2021. It was known for its Wool Runner shoe, but investors struggled to stay optimistic on the stock as customers gravitated toward Hoka (DECK) and On (ONON) shoes.

President Trump said during a televised interview aired Wednesday morning that he would move to fire Federal Reserve Chairman Jerome Powell if he doesn’t resign when his term as chair ends in May.

“Well, then I’ll have to fire him, OK?” Trump said in an interview with Fox Business.

While Trump’s pick to lead the Fed, Kevin Warsh, is set to begin confirmation hearings this month, there is a chance Warsh will not be confirmed by May 15, the final day of Powell’s term. In that case, Powell would have the option to remain as chair “pro tem” until Warsh — or someone else — is confirmed, which the current chair has said would elect to do.

Complicating matters is the Department of Justice’s criminal probe into Powell over alleged cost overruns for renovations to the Federal Reserve building. Sen. Thom Tillis, a Republican from North Carolina, who sits on the Senate Banking Committee, has said he will not vote to confirm any candidate to be the next Fed chair until the Justice Department drops its investigation into Powell.

Trump, however, has continued to insist that the probe continue, going beyond traditional norms of the division of powers by explicitly directing the Justice Department’s work.

“Here’s a man who took this little, tiny building and a couple of other little, tiny complex, and he’s spending more than $3 billion,” Trump said in the interview with Fox Business.

“It is probably corrupt, but what it really is is incompetent, and we have to show the incompetence of that,” Trump said. The president also noted that Tillis “is an American,” and that the Republican senator “knows what to do.”

While Powell’s term as chair ends in May, his term as a Fed governor runs through January 2028, and he has said he will not step down from the central bank until the probe is resolved.

Repairs to energy-linked infrastructure in the Middle East could cost up to $58 billion, with $50 billion in oil and gas-related repairs alone, the energy consultancy Rystad Energy said Wednesday morning.

In the seven weeks thus far of the so-called third Gulf war, air strikes and drones have damaged refineries, processing plants, pipelines, storage facilities, and other critical energy infrastructure. Rystad’s $58 billion repair bill estimate is more than double the $25 billion figure it published three weeks ago.

The primary constraint, however, is likely not to be capital but instead the availability of the smaller pool of equipment and contractors available to commence repairs, Rystad noted. Equipment and labor crews previously allocated to new build projects will have to be redirected, delaying timelines for new capacity, while those facilities needing damage will have to compete for the small pool of specialized labor available.

“This is no longer just a story about damaged facilities in the Gulf, it is a stress test for the global energy supply chain,” said Karan Satwani, a senior supply chain research analyst at Rystad.

The effects are unlikely to be felt evenly, Rystad noted. While facilities in more accessible countries with contractors readily available could start repairs within weeks, repairs on more complex facilities, such as Qatar’s Ras Laffan LNG complex, could take much longer to begin, as specialized parts, equipment, and labor are scarce.

“Repair work does not create new capacity, it redirects existing capacity, and that redirection will be felt in project delays and into inflation far beyond the Middle East,” Satwani said.

“The $58 billion bill is the headline, but the knock-on effects on energy investment timelines globally may prove just as significant.”