U.S. stock index futures edged higher on Friday following remarks from former President Donald Trump, who stated that the conflict with Iran is "going well" and "will be over very soon." Trump made these comments during an event in Las Vegas on Thursday, adding that the situation was progressing favorably. This came just hours after he announced a 10-day ceasefire agreement between Israel and Lebanon.
S&P 500 futures advanced by 0.4%, while Nasdaq 100 futures also climbed 0.4%. Futures for the Dow Jones Industrial Average increased by 240 points, representing a gain of 0.5%.
During Thursday's trading session, all three major U.S. stock indices closed higher, with the S&P 500 and the Nasdaq Composite reaching new record highs.
Earlier in the week, Trump had indicated that the Middle East conflict was "winding down" and that Iran was "very eager to make a deal," with his latest comments reinforcing this optimistic signal.
Market expectations for a peace agreement have recently driven stocks upward, positioning all three major indices for solid weekly gains. The blue-chip Dow Jones has accumulated a 1.4% increase for the week, while the S&P 500 and the Nasdaq have risen by 3.3% and 5.2%, respectively.
Barclays strategist Venu Krishna noted in a report on Friday that the S&P 500 took only 54 trading days to rebound from near correction territory—a decline of nearly 9%—to a new record closing high this week, marking the fastest recovery of this kind since 2020.
Measured from its recent low, the rebound to a new high took just 11 trading days, the quickest recovery among all near-9% corrections since 1990.
This week’s surge to record levels has caught many Wall Street bears by surprise. The S&P 500 broke through the 7,000-point mark for the first time in history, while the Nasdaq Composite rose for a 12th consecutive session on Thursday, its longest winning streak since 2009.
However, Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, cautioned that the current market rally has been narrowly based and may not be sustainable. "There’s nothing wrong with hitting a new high in just 11 days, but I think we need to see broader participation among individual stocks to confirm that this rally has staying power," she stated.
She added, "There are still many unresolved issues. In this environment, it’s important to return to the discipline of diversification—both within and across asset classes. Don’t make big bets here; instead, use market volatility to adjust rebalancing timing, especially for investors who typically rebalance on a calendar basis."
Semiconductor, media (internet), and hardware stocks have been the primary drivers of the record-breaking advance, with funds flowing back into AI-themed stocks that had weighed on the indices during the sell-off in March. Once again, the technology sector has emerged as a major beneficiary.
The strong rally has been supported by a combination of optimistic geopolitical developments and leadership from tech stocks. First, investor sentiment improved following news of a provisional ceasefire between the U.S. and Iran and the possibility of high-level peace talks. International oil prices retreated to around $97 per barrel, easing near-term inflation concerns.
At the same time, the AI super-cycle remains a key market driver, with a strong earnings report from Taiwan Semiconductor Manufacturing Co. further fueling the rally. The company reported record profits and raised its 2026 outlook, alleviating concerns that geopolitical tensions would dampen AI-related spending.
Solid first-quarter earnings from banks such as JPMorgan Chase and Bank of America, along with lower-than-expected U.S. Producer Price Index (PPI) data, have helped the market climb a "wall of worry" and reach new highs.
Jenny Johnson, CEO of Franklin Templeton, expressed strong optimism about the U.S. economy during the Semafor World Economy Summit this week.
Has the stock market already shrugged off the war? Is a new bull market underway?
As technology stocks lead a global equity rebound—with the tech-heavy S&P 500 and Nasdaq hitting new highs even amid geopolitical conflict—investors are sounding the charge for a new bull market. Several institutions, including Citigroup, Morgan Stanley, and BlackRock, have recently turned bullish on U.S. stocks.
The narrative of a new bull market rests on three pillars: resilience in corporate earnings as seen in the latest reporting season, a revival in risk appetite led by tech and AI computing themes, and the market’s judgment that Middle East tensions will not lead to prolonged inflation akin to 2022. As long as these three pillars hold, Wall Street is likely to treat war-related headlines as mere trading noise.
Citigroup analysts have called for a potential rebound in software stocks, suggesting that a broad-based summer rally may be taking shape.
Scott Chronert, U.S. equity strategist at Citigroup, suggested that as the U.S. stock market enters a critical earnings season, the technology sector is experiencing what he termed a "reverse perfect storm." He noted that despite varying pressures across semiconductors, software, and hyperscale data centers, strong upcoming quarterly results could validate current AI investment themes and reinforce the leadership of major tech companies.
The core logic behind this outlook is that investors are eagerly looking for fundamental confirmation that the significant earnings beats and guidance raises seen in recent quarters are not temporary, but rather reflect sustained growth momentum.
Animal spirits have returned with greater force, driving the strongest surge in U.S. stocks since 2020. Retail investors are returning to the market in large numbers. Stocks favored by individual investors are outperforming those preferred by institutions by the widest margin since November 2020.
A Goldman Sachs basket tracking retail favorites has risen 22% since late March. For now, bullish sentiment remains dominant, with strong demand for short-term call options betting on further gains.
Retail buying, a key support for the market, is expected to strengthen after the April 15 tax filing deadline, as investors anticipate larger-than-usual tax refunds due to policies from the Trump administration.
Marko Kolanovic, former chief strategist at JPMorgan, argued that the S&P 500's 10% rise is not due to stronger fundamentals but rather to Commodity Trading Advisor (CTA) funds covering short positions. He suggested that the rally is more a result of internal market positioning and systematic trading flows than improvements in commodity fundamentals or geopolitical conditions. He emphasized that this kind of macro-catalyst-independent advance reveals a potentially mechanistic element in current market pricing, with trend-following CTAs playing a key role.
Focus Stocks: General Motors and Ford Motor saw pre-market gains of 2.5% and 0.6%, respectively. The U.S. Department of Defense has entered talks with major automakers about converting civilian auto plants to produce weapons and military equipment, in order to replenish ammunition stocks depleted by conflicts in Ukraine and the Middle East. If finalized, defense contracts could become a new revenue stream for large car manufacturers.
Netflix fell nearly 10% pre-market after reporting better-than-expected Q1 results but issuing weaker Q2 guidance.
Stellantis rose over 2% pre-market after signing a five-year AI cooperation agreement with Microsoft.
Ericsson declined more than 3% pre-market following weaker-than-expected Q1 earnings.
Alcoa dropped 3.3% pre-market due to disappointing Q1 results and an 8% decline in total aluminum shipments.
North Indian Power rose 2.6% pre-market after reaching a major energy infrastructure agreement with Google and Amazon.
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