After five weeks of losses in the S&P 500, the blue-chip index rebounded, closing 3.4% higher. The Nasdaq gained 4.4% and the Dow rose 3.0% as optimism around a potential de-escalation in the U.S.-Iran conflict lifted sentiment… at least temporarily.

Markets were driven largely by geopolitics. Early-week volatility gave way to a strong midweek rally on reports of possible ceasefire discussions, though uncertainty remained high as headlines continued to shift and oil prices stayed elevated.

Over the weekend, reports came out of a downed US F-15 pilot in Iran. This, combined with an expletive laced Easter Morning Truth Social post showed that there was still a long way to go on reaching a ceasefire.

For the stock market, leadership came from growth sectors. Across, Small, Mid and Large, Capitalizations, growth-oriented stock benefited from the reprieve in the market turmoil.
At the sector level, communication services and technology lead the way. Semiconductor stocks rebounded sharply after early weakness, helping power gains in mega-cap names. Meanwhile, energy lagged as oil prices swung throughout the week.

Investors also reacted to comments from Fed Chair Jerome Powell, who emphasized that longer-term inflation expectations remain stable and noted the Fed has limited ability to address supply-driven shocks. That helped ease rate hike expectations.

Overall, the rally appears driven by a mix of improving geopolitical sentiment, a bounce from oversold conditions, and renewed strength in tech. Still, with oil volatility and uncertainty around Iran ongoing, markets remain cautious heading into this week.