S&P 500 and Nasdaq Composite reach all-time highs: Is Wall Street being overly optimistic?

US stocks surged on April 15th, with the S&P 500 and Nasdaq Composite both reaching all-time highs, reflecting renewed optimism amid expectations of de-escalation in US-Iran tensions and positive earnings results from the banking sector.

Wall Street surged, with the S&P 500 surpassing 7,000 points for the first time, as investor sentiment shifted to risk aversion fueled by expectations of easing US-Iran tensions.

The trading session on April 15th (US time) closed with gains dominating Wall Street, marking a significant turning point as key indices not only recovered all of their earlier losses but also set new historical highs. The main driving force came from a marked improvement in investor sentiment, fueled by positive geopolitical signals and the simultaneous emergence of first-quarter earnings reports.

At the close of trading, the S&P 500 rose 0.8% to 7,022.95 points, surpassing the 7,000-point mark for the first time in history. Meanwhile, the Nasdaq Composite surged 1.6% to 24,016.02 points, continuing its upward trend driven by technology stocks. In contrast, the Dow Jones Industrial Average edged down 72.27 points, or 0.1%, to 48,463.72 points. The Russell 2000, a small-cap index, also recorded a modest 0.3% gain.

This development shows that the market has fully recovered what it lost during the previous sharp correction. Specifically, the S&P 500 had fallen nearly 9% since US-Iran tensions escalated in late February, approaching the 10% "technical correction" threshold. However, in just the last two weeks, the index has rebounded by about 10%, reflecting growing confidence that the global economy can avoid the worst-case scenario from geopolitical conflict.

A key factor driving the recovery was the expectation of diplomatic progress between Washington and Tehran. US President Donald Trump said the conflict was “near its end” and left open the possibility of resuming peace talks. This news immediately triggered a “risk-on” sentiment in the market, as investors increased their holdings of equities and withdrew from safe-haven assets.

In addition, the first-quarter earnings season also brought many positive signals. Major banks such as Bank of America and Morgan Stanley recorded profits exceeding expectations, thereby reinforcing confidence in the resilience of the US economy. Leaders of financial institutions said that domestic consumption remained stable, despite the earlier energy price shock, while IPOs and corporate transactions remained vibrant.

According to data from LSEG, total earnings for S&P 500 companies in the first quarter are projected to reach approximately $605.1 billion, higher than the $598.7 billion estimate at the beginning of the quarter. This figure indicates that earnings expectations are being adjusted in a positive direction, becoming an important support for the stock market.

From a sector perspective, technology stocks continue to play a leading role. The strong rally in the Nasdaq Composite reflects the return of capital to growth stocks after a period of correction. Several individual stocks also attracted attention, such as Allbirds, which surged after announcing its strategic shift towards artificial intelligence (AI) infrastructure, demonstrating the growing appeal of this emerging technology.

The energy market also contributed to stabilizing sentiment. Oil prices fluctuated but generally cooled down, remaining around $91-$95 per barrel, following signals that Iran might ease restrictions on shipping through the Strait of Hormuz. This helped alleviate concerns about global supply disruptions, a factor that had put significant pressure on financial markets recently.

Nevertheless, analysts remain cautious. Some argue that the market may be overreacting to geopolitical signals, while the risk of escalating conflict has not been completely eliminated. Furthermore, uncertainties related to monetary policy, particularly the possibility of a leadership change at the Federal Reserve (Fed), could also impact investor expectations in the coming period.

In addition, structural risks such as disruptions to the technology supply chain, particularly in the AI ​​sector, or pressure to withdraw capital from private credit funds are also being closely monitored. These factors could become unpredictable variables impacting the medium-term trend of the market.

However, overall, the prevailing trend on Wall Street remains positive. Strong capital flows continue into the stock market amid expectations of improved corporate earnings and temporarily easing geopolitical risks. The rise in major indices, particularly the S&P 500 surpassing 7,000 points, is seen as a significant technical signal, reinforcing confidence in a new bull cycle.

In the short term, the market is likely to continue to be influenced by two main factors: the progress of US-Iran negotiations and the earnings reporting season. If these factors remain positive, the upward trend could be sustained, although technical corrections are inevitable after the market has set new highs.

The April 15th session closed with a clear indication of optimism, showing that Wall Street is gradually adapting to geopolitical shocks. However, as many experts have noted, the market is still operating on a "line of expectation," where any unexpected fluctuations could quickly reverse the current trend.

Source: https://thoibaonganhang.vn/sp-500-va-nasdaq-composite-lap-dinh-lich-su-pho-wall-dang-lac-quan-teu-180631.html