Last night, just hours after the Wall Street close, US President Donald Trump posted a message on Truth Social that triggered a significant relief rally across global financial markets. The United States will extend the two-week ceasefire with Iran indefinitely. As justification, Trump cited the “seriously fractured” government in Tehran as well as a request for additional negotiation time conveyed by Field Marshal Asim Munir and Pakistan’s Prime Minister Shehbaz Sharif.
Markets responded immediately. In Asian trading, S&P 500 futures rose 0.5 percent, Nasdaq 100 contracts gained 0.7 percent. As Wall Street opened this morning, the gains continued. The S&P 500 currently trades about 0.68 percent higher, the Nasdaq Composite marked a new intraday record high and is on track to extend its historic winning streak to twelve consecutive trading days — something not seen in this form since 1992.
For investors, this is a remarkable moment. Just a week ago, markets were pricing in the real possibility of renewed escalation in the Middle East. Oil prices had briefly risen above $100 per barrel, the VIX — Wall Street’s so-called fear gauge — had spiked significantly. Today, by contrast, the VIX has fallen back to around 19 points, a sign that risk aversion among market participants is palpably easing. Brent still trades above $95 per barrel, but the panic-driven price spikes of recent days have disappeared.
The Geopolitics of Patience
The situation recalls a classic lesson that André Kostolany emphasized repeatedly: Market turning points arise psychologically, not fundamentally. Just days ago, sentiment ranged from tense to pessimistic. Iran had imposed shipping restrictions through the Strait of Hormuz, Vice President JD Vance postponed a planned trip to Pakistan, Iranian officials refused negotiations. Each of these factors was cause for concern — and yet markets have recovered all their Iran-conflict losses within days.
This is an important point for investors. The danger of geopolitical crises often lies not in their permanent impact on fundamentals. It lies in investors panicking and thereby inflicting the greatest losses on themselves. Anyone who held stocks through the past ten days is in a better position today than those who panic-sold at $99 Brent and are now missing the re-entry.
At the same time, the situation is not as clear-cut as today’s prices might suggest. Iranian semi-official news agencies report that the paramilitary Revolutionary Guard attacked a third ship in the Strait of Hormuz on Wednesday. The US blockade on vessels from Iranian ports remains in force. Tehran argues that this blockade itself violates the ceasefire. The situation is far from relaxed — it is simply less escalating than it was days ago.
Earnings Season as the Actual Driver
While geopolitics dominates headlines, a second important market event runs in the background: the Q1 2026 earnings season. And so far, it is unfolding remarkably positively.
Nearly 20 percent of S&P 500 companies have already reported quarterly results. Earnings per share are expected to grow 12 percent in the first quarter — a strong number. For full-year 2026, analysts expect earnings growth of 18 percent. If realized, this would mark the third consecutive year of double-digit earnings growth in the S&P 500 — a historically rare phenomenon.
Several important figures have already come in this morning. Boeing reported a loss of 20 cents per share — significantly better than the expected 83-cent loss. Revenue of $22.22 billion exceeded the consensus estimate of $21.78 billion. The stock rose over three percent in pre-market trading. Particularly encouraging for investors: Boeing confirmed that the 737 Max 7 and Max 10 will receive certification this year, with first deliveries in 2027. This is the kind of concrete milestone communication the market had missed from Boeing in recent years.
GE Vernova, the energy technology company that went public in 2024 as a spin-off from General Electric, has proven to be an even bigger winner of the session. The stock rose seven percent after revenue of $9.34 billion exceeded estimates of $9.25 billion. More importantly, GE Vernova raised its full-year outlook. For a company sitting at the epicenter of the AI-energy boom — data centers need massive power, and GE Vernova provides the turbines and grid infrastructure — this is a significant signal.
United Airlines also rose. First-quarter results exceeded expectations, although the airline lowered its full-year 2026 outlook. This illustrates the airlines’ dilemma: Business is performing in the short term, but higher oil prices from the Iran conflict have changed the calculation for the rest of the year.
Tesla and IBM After the Close — The Most Important Reports of the Week
The actual highlight of today’s earnings session comes after the close. Both Tesla and IBM will report after 4 p.m. Wall Street time. Both reports will have signal effect far beyond their own companies.
For Tesla, several central questions arise. First: How much did Q1 deliveries actually decline? Analysts expect another year-over-year decline after all of 2025 already disappointed. Second: How is the robotaxi business performing in Austin and other US cities where Tesla has rolled out the service? Third: What statements will management make about the planned SpaceX IPO, in which many Tesla investors are indirectly interested through their SpaceX stakes?
IBM is the second important company this evening. The technology veteran from Armonk has entered an astonishing renaissance under CEO Arvind Krishna. The hybrid cloud business is growing, the watsonx AI platform is winning customers, and the stock trades near 52-week highs. This evening will show whether the momentum continues.
What Bank Numbers Already Showed
Already in the previous week, major US financial institutions had released their quarterly results — and the outcomes were remarkably positive. JPMorgan Chase, Citigroup, Wells Fargo, and Goldman Sachs predominantly exceeded analyst expectations. Investment banks benefited from a strong M&A pipeline as well as the high trading volumes that geopolitical uncertainty typically generates.
Goldman Sachs’s numbers were particularly impressive, with the bank reporting a record quarter. Yet the stock reacted muted — a classic example that at the stock market, relative performance to expectations counts, not the absolute result. Goldman delivered, but the market had apparently expected even more.
Today’s Winners and Losers
A sector view shows the current market logic. Technology and materials lead the gains. The Nasdaq 100 trades 0.7 percent higher, the iShares Expanded Tech-Software ETF continues its impressive outperformance of recent weeks. Software companies with limited international exposure are seen as relative safe havens in times of geopolitical uncertainty.
Defense stocks, by contrast, are giving back slightly after rising strongly during the crisis. This is a classic “buy the rumor, sell the news” pattern — those who bet on escalation are now taking profits. Energy stocks show a mixed picture. Major oil companies ExxonMobil and Chevron continue to benefit from high crude prices, while airlines and other energy consumers face slight pressure.
Pharma stocks are today’s biggest losers in the Dow Jones. Merck & Co. collapsed 3.89 percent. The reasons lie in company-specific news rather than the macroeconomic environment. This shows that despite strong index movement, individual stock risks remain substantial. Johnson & Johnson lost 2.18 percent, 3M dropped 2.31 percent. Anyone holding a dividend portfolio should take a close look at positions today.
UnitedHealth, by contrast, was the big star of the previous day with a gain of 8.75 percent. Strong Q1 numbers and the raised full-year outlook lifted the healthcare sector generally.
The Role of the Fed and the Interest Rate Outlook
An underrated factor in the current market dynamic is monetary policy. The Federal Reserve currently holds the policy rate at 4.5 percent. Inflation expectations have remained stable despite the oil price jump — a sign that market participants interpret the Iran conflict as a geopolitical rather than inflationary event.
The yield on ten-year US Treasuries stands at 4.27 percent today and tends slightly lower. This is a positive signal for risk assets: Lower yields mean more favorable financing conditions for companies and make stocks more attractive relative to bonds.
Initial unemployment claims fell to 207,000 last week, significantly below the expected 217,000 and far below the 30-year median of over 300,000. The labor market remains robust, confirming the Fed in its wait-and-see stance. A rate cut in June remains priced in, but no longer with the certainty that prevailed a month ago.
Japan in Focus — The Nikkei Approaches 60,000
An often-overlooked aspect of the current market situation is developments in Asia. The Nikkei 225 marked a new record high overnight, approaching the magical 60,000-point mark. This is remarkable because in the 1990s and 2000s, Japan was the prime example of structural deflation and endless sideways movement.
Since 2020, the situation has fundamentally changed. The Bank of Japan has normalized monetary policy, Japanese companies have dramatically improved capital efficiency, and demographic transformation has tightened labor supply — resulting in wages and inflation finally rising again. For German investors in the MSCI World, this is good news: Japan accounts for over five percent of that index and contributes noticeably to performance.
What Investors Should Consider Now
The current market situation is paradoxical in some ways. We simultaneously have record highs on major indices, an extended ceasefire after a geopolitical crisis, an ongoing recovery after four weeks of losses, and an earnings season indicating solid profit growth. At the same time, individual pharma and industrial names trade significantly below their highs, oil prices remain elevated, and the geopolitical situation is anything but resolved.
For the long-term oriented investor, this means three things.
First: Not all sectors benefit equally from the current dynamic. Outperformance of tech and software continues, while classic defensive sectors like pharma and consumer staples show weakness. Too heavy a weight in tech means better short-term performance but higher concentration risk.
Second: Earnings season is not over. Tesla, IBM, Microsoft, Alphabet, and Meta will all report in the coming two weeks. The actual direction of the market for the second quarter will be decided afterwards. Anyone making large position changes now does so blind.
Third: Geopolitics remains a risk factor. The ceasefire extension is positive, but the underlying conditions — attacks in the Strait of Hormuz, US blockade, fractured Iranian leadership — remain fragile. Renewed escalation is not ruled out, and the market could react much more strongly to that than to today’s positive news.
Kostolany’s Eternal Truth
One of Kostolany’s most concise sentences reads: “Bull markets die in euphoria, bear markets die in depression.” Today, we are in neither extreme euphoria nor depression. We are in a phase where sentiment is slowly shifting from pessimistic to cautiously optimistic. Historically, this has often been one of the most profitable phases for equity investors.
The record highs on Nasdaq and S&P 500 should not be interpreted as a warning signal. Rather, they are a sign that fundamental drivers — earnings growth, robust labor market, falling yields — remain intact. At the same time, the current phase requires discipline. Those who chase now out of euphoria make a mistake. Those who sell out of fear do too. The art lies in consistently following the existing strategy.
Outlook: What the Coming Days Bring
Tesla and IBM numbers are the focus tonight. Thursday brings Netflix updates from the tech sector as well as additional industrial names. On Friday, the Bureau of Economic Analysis releases the first estimate of US GDP for Q1 2026 — an important data point for Fed expectations.
On the macroeconomic side, oil prices should play the leading role. As long as Brent trades above $90 per barrel, inflation concerns remain a theme. Should the Strait of Hormuz situation continue to ease, we could see Brent prices between $75 and $85 in the coming weeks. This would be another tailwind for equities.
For dividend investors, the current environment is particularly interesting. The combination of moderate interest rate environment, solid earnings growth, and stable economic base creates ideal conditions for companies with reliable dividend histories. Coca-Cola reports on April 28, additional aristocrats follow in the coming weeks. Those watching the return of dividend stocks we previously analyzed will get important new data points in the coming weeks.
Conclusion
Today marks an important turning point in the current market phase. After four weeks of losses, the S&P 500 has fully recovered its Iran crisis losses, the Nasdaq trades at record levels, and earnings season points to continued profit growth. Geopolitical uncertainty remains but is increasingly perceived as a negotiable factor rather than an existential threat.
For long-term oriented investors, this is a time when discipline matters more than activity. Anyone already holding a well-diversified portfolio has no reason for haste. Anyone with capital on the sidelines finds selectively good buying opportunities in the current environment — especially in sectors pressured by recent distortions (pharma, defensives) that have fundamental strengths.
The coming weeks will be the real test. Earnings season will show whether profit growth is actually as robust as analysts estimate. Geopolitical negotiations will show whether the ceasefire holds. And the Fed will signal in the first half of May whether the expected June rate cut actually materializes. Until then, Kostolany’s old wisdom applies: Patience is the most important currency at the stock market. And patience today is held only by those who have been in markets long enough to recognize the patterns.
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