Author: Timothy St. John

The U.S. stock market reacted only marginally to renewed attacks between Iran and the United States over the weekend with leading stock indices dropping slightly.

The Nasdaq fell just 0.74% on Monday while the Dow slipped 0.24%. The S&P 500 ticked down by 0.46% in a minor correction after last week’s record highs. Both the Nasdaq and S&P 500 set new records this month and are only down slightly this week from those highs.  

That may surprise many investors since the United States attacked a cargo ship from Iran over the weekend and seized it. Just days before, Iran refused to come to the table with the U.S. and negotiate for peace.

Little Change This Week Means Market Is Stabilizing

Because the stock indices are not affected very much by the escalating conflict in the Middle East, that tells us that the market is strengthening and is less volatile than it was a few weeks ago. Analysts say that this is due to strong sentiment that Iran and the United States will come to a peace agreement quickly. They do not expect the fighting to continue for much longer.

Since late February, the two countries have attacked one another, and Israel and Lebanon have also joined in the fighting. Ceasefire agreements between these countries were in place last week and are set to expire this week, which means either the fighting intensifies or the countries prepare to reach a deal. For now, the stock market is behaving as though a deal is imminent.

The biggest movers across the stock market since the conflict started have been energy stocks and technology stocks. Energy stocks are obvious because of how the fighting has affected oil prices and shipments of commodities throughout the region and around the world. Technology stocks are finding new life thanks to strong quarterly earnings and less negative sentiment toward capex spending.

Oil prices are higher this week, with Brent crude oil up by 5%, reaching $94 a barrel. West Texas Intermediate also climbed 5%, hitting $88 per barrel. These prices are lower than we have seen throughout the entire Iran conflict, so it is not unusual that the stock market is hardly reacting to the higher rates.

Nvidia (NVDA) fell 1.52% Monday, but the stock is still elevated after days of gains. In fact, Nvidia has been mostly bullish over the last 30 days, moving from $175 per share to $198. Advanced Micro Devices (AMD) is performing similarly. This stock fell 1.46% on Monday but jumped from $204 to $274 per share over the last month.

There is a similar story across the stock market today. Many stocks are down after last week’s gains, but this looks like a small market correction compared to a bullish overall trend for a large number of stocks from the tech and energy sectors.  

Oil prices dropped and stocks gained on Friday morning after U.S. President Donald Trump announced that the conflict in Iran “should be ending pretty soon.”

A ceasefire has been reached in at least part of the ongoing conflict in the Middle East. This agreement is between Israel and Lebanon, and President Trump said that the war is going along swimmingly. In response to this news, the Dow added 240 points, gaining 0.5% along with the Nasdaq Composite. The S&P 500 added 0.4% on Friday morning in early trading, and we anticipate a bullish trend to emerge on the back of these developments.

Stock indices have been moving upward all week long, with the Nasdaq gaining 5.2% on strong technology stock movement and the S&P 500 adding 3.3%. The Dow gained 1.4% this week so far, and all three indices are enjoying some of their biggest gains since the conflict began in late February.

Iran War “Very Close to Over” and Stocks Are Bullish

Trump spoke this week about the ongoing Middle East conflict and said that it was “very close to over.” He said that Tehran is ready to make a deal, and his comments have sparked positive movement in the equity market, spurring bullish activity that extended to the cryptocurrency market as well.

Talks of a peace deal have been circulating all week long, helping tech stocks in particular to rally.  Investors should be aware that the current market environment is volatile, though, and that new developments in the conflict could shift the trends in the other direction quickly and with little warning.

Both the Nasdaq and S&P 500 have hit new highs in the last few days, while the Dow is struggling to make its way back to early 2026 highs. The swift upward movement does not necessarily indicate little risk of a pullback.

Strong earnings reports recently from several leading companies helped the market get where it is right now. Microsoft (MSFT), Nike (NKE), and Netflix (NFLX) have all beat estimated earnings in recent weeks. Several AI-related companies have recently produced excellent quarterly earnings statements as well and taken some of the selling pressure away from that niche.