The S&P 500 delivered one of its most significant sessions of 2026 on Monday 13 April, jumping 1.02% to close at 6,886.24 — its highest closing level since before the US-Iran war began in late February.
The landmark close effectively erased the decline the broad market index had suffered since the conflict started, a remarkable turnaround achieved in the face of continuing geopolitical uncertainty and an active US naval blockade of the Strait of Hormuz.
The session opened under pressure. The S&P 500 was down 0.4% at its session low in early trading, as the reality of failed US-Iran peace talks and the implementation of the Strait of Hormuz blockade sent oil above $100 per barrel and triggered an initial flight to safety. The Dow Jones Industrial Average fell more than 400 points, or approximately 0.9%, at its session trough. The reversal came swiftly and decisively after President Trump stated publicly that Iran had reached out to Washington to 'work out a deal' — a signal that prompted a sharp acceleration in equity buying across multiple sectors.
How the S&P 500 Recovered on 13 April 2026
Nine of the eleven S&P 500 sectors closed higher on Monday, demonstrating the breadth of the recovery. Technology, financials, and consumer discretionary stocks led the advance. Within technology, Oracle surged nearly 13% following its showcase of artificial intelligence capabilities at its Customer Edge Summit, where the company highlighted AI-driven energy management tools that delivered hundreds of millions of dollars in utility savings in 2025. Palantir Technologies gained more than 3%, continuing to benefit from its defence and intelligence sector exposure at a time of elevated geopolitical risk. Software stocks broadly performed well, reflecting the thesis that AI-driven productivity tools are becoming increasingly insulated from macro volatility.
The rebound was also supported by Goldman Sachs, which — despite initially falling more than 3% after missing revenue estimates in its fixed-income, currencies, and commodities division — was among the contributors to the Dow's recovery from session lows. Goldman reported its second-highest quarterly profit on record, underscoring the resilience of US financial institutions even amid the conflict-driven market turbulence.
AppLovin rose 5% following a pair of bullish Wall Street research notes, and eight S&P 500 stocks traded at new 52-week highs during the session, including CMS Energy and Entergy, which reached all-time highs dating back to their listings on the New York Stock Exchange in 1987 and 1972 respectively.
The Iran Conflict and the S&P 500 in 2026
The significance of Monday's close cannot be overstated in the context of the 2026 trading year. At the closing lows of the US-Iran war, the S&P 500 had been down more than 7% for 2026. As of Monday's close, the index was up approximately 0.05% for the year — barely positive, but a striking statistical recovery from those war-driven lows. The Nasdaq Composite and Dow Jones Industrial Average remain modestly negative for the year, by 0.3% and 0.8% respectively, suggesting that the S&P 500's recovery was particularly strong.
Tom Lee, head of research at Fundstrat, offered a notable perspective on the rally. He argued that equity markets have historically demonstrated an ability to anticipate turning points even amid active conflicts, drawing a parallel with the Second World War, when US stock markets bottomed in May 1942, months before major deployments. Lee suggested that the current rally reflects an expectation of a 'favorable outcome' in the Iran negotiations, with markets discounting resolution even before it arrives formally.
Inflation Data and Federal Reserve Implications
Adding to the constructive backdrop on Monday was the growing investor focus on the Federal Reserve's rate path. Capital market participants noted that artificial intelligence-driven productivity improvements and capital expenditure are exerting downward pressure on inflation, which in turn should allow the Fed to ease monetary policy once a confirmed successor to the chairmanship is confirmed. Incoming chairman Kevin Warsh, who was mentioned by name in several analyst notes circulating during Monday's session, is widely expected to signal a more accommodative stance once installed. The prospect of rate cuts, combined with AI-driven earnings growth, forms the medium-term bull case for US equities.
Separately, the CBOE Volatility Index — the VIX — ended Monday at 21.04, having recovered from an earlier high of 21.58. The VIX had reached a peak close of 31.05 on 27 March at the height of war-driven fear, and has been declining steadily since the two-week ceasefire was announced in early April. Monday's reading of approximately 21 reflects residual uncertainty but is meaningfully below the panic levels of late March.
S&P 500 Outlook: Earnings Season and Diplomacy in Focus
The week ahead promises significant catalysts for the S&P 500. First-quarter earnings from major US banks — including JPMorgan Chase and Wells Fargo — were due after Monday's close, with investors focused on credit quality metrics and net interest income guidance as proxies for the US economy's health. Broader index direction will, however, continue to be shaped primarily by developments in the Iran negotiations. Pakistan's efforts to arrange a second round of US-Iran talks, and any signals of movement toward a ceasefire or deal to reopen the Strait of Hormuz, would represent the single most powerful potential catalyst for further equity upside. With the S&P 500 having recovered its war losses in just under six weeks, the trajectory from here depends overwhelmingly on whether the diplomatic momentum can be sustained.