US equity markets staged a significant rebound on Monday, April 14, 2026, with major indexes settling higher as investor sentiment shifted towards optimism for a potential agreement to end the Iran War. The S&P 500 Index ($SPX) (SPY) closed up +1.02%, marking a 5-week high, while the Nasdaq 100 Index ($IUXX) (QQQ) advanced +1.06% to a 1.5-month high. The Dow Jones Industrial Average ($DOWI) (DIA) also saw gains, closing up +0.63%.
The market’s turnaround was primarily driven by evolving geopolitical developments. Stocks initially moved lower on Monday after crude oil prices jumped following President Trump’s order for a naval blockade of the Strait of Hormuz. This action came after deadlocked peace talks over the weekend between the US and Iran, with President Trump threatening retaliation in the event of Iranian resistance. Iran, in turn, stated it would target all ports in and close to the Persian Gulf if its own shipping hubs were threatened. This blockade, impacting about a fifth of the world’s oil and liquefied natural gas transit, raised concerns about global oil and fuel shortages, despite Iran exporting approximately 1.7 million barrels per day (bpd) in March.
However, market sentiment reversed and stocks extended their gains after President Trump later indicated that Iran “still wanted to make a deal and reached out to the US about peace negotiations.” This statement led to crude oil prices falling from their best levels, contributing to the broader market rally. June E-mini S&P futures (ESM26) rose +0.98%, and June E-mini Nasdaq futures (NQM26) climbed +1.06%, reflecting the positive shift in investor outlook.
Economic Data and Interest Rate Implications
Amidst the geopolitical volatility, Monday’s US economic news presented a bearish signal for stocks. March existing home sales fell -3.6% month-over-month to a 9-month low of 3.98 million units, missing expectations of 4.05 million. This weaker-than-anticipated housing data, however, proved to be a dovish factor for Federal Reserve policy, contributing to a recovery in Treasury notes.
June 10-year T-notes (ZNM6) closed up by +2.5 ticks, with the 10-year T-note yield falling -2.0 basis points to 4.297%. T-notes initially moved lower on Monday after a surge in WTI crude oil prices pushed inflation expectations higher, with the 10-year breakeven inflation rate rising to a 3-week high of 2.405%. However, short covering emerged in T-notes as crude oil prices retreated from early highs following President Trump’s peace negotiation remarks. European government bond yields, conversely, moved higher, with the 10-year German bund yield rising +3.4 bp to 3.092% and the 10-year UK gilt yield increasing +3.4 bp to 4.869%.
Looking ahead, the markets are currently discounting a mere 1% chance for a +25 basis point FOMC rate hike at the April 28-29 policy meeting. Swaps are also discounting a 42% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.
Sectoral Performance and Key Movers
Software stocks led Monday’s rally, with Oracle (ORCL) jumping more than +12% to lead gainers in the S&P 500. The surge followed Oracle’s announcement that its new utilities industry suite offerings help utilities cut costs with AI. Other notable software gainers included Cadence Design Systems (CDNS), up more than +8%, ServiceNow (NOW) and Atlassian (TEAM), both up more than +7%. Workday (WDAY) and Adobe (ADBE) closed up by more than +6%, while Intuit (INTU) gained over +5%. Salesforce (CRM) led gainers in the Dow Jones Industrials, closing up more than +4%.
Chip makers and AI-infrastructure stocks also provided a significant boost to the overall market. ARM Holdings (ARM) closed up more than +5%, and Intel (INTC) rose more than +4%. Microchip Technology (MCHP), Qualcomm (QCOM), Broadcom (AVGO), Marvell Technology (MRVL), and Seagate Technology Holdings Plc (STX) all closed up more than +2%.
Conversely, utility stocks retreated, giving back some of last week’s gains. Edison International (EIX) and PG&E (PCG) closed down more than -4%, while NextEra Energy (NEE), Sempra (SRE), and Xcel Energy (XEL) closed down more than -2%. Among other notable movers, Revolution Medicines (RVMD) surged more than +40% on positive late-stage trial results for a pancreatic cancer treatment. Leggett & Platt (LEG) climbed more than +12% following an acquisition agreement, and Sandisk (SNDK) gained over +11% after Nasdaq announced its replacement of Atlassian in the Nasdaq 100 Stock Index.
On the downside, Fastenal (FAST) closed down more than -6% after reporting Q1 operating income below consensus. Conagra Brands (CAG) fell more than -4% following news of a CEO change, and Best Buy (BBY) declined over -2% after a double-downgrade from Goldman Sachs. Goldman Sachs (GS) itself closed down more than -1% after reporting weaker-than-expected Q1 FICC sales and trading revenue.
As earnings season commences this week with money center banks reporting, Q1 S&P 500 earnings are projected to climb +12% year-over-year, according to Bloomberg Intelligence. However, stripping out the technology sector, Q1 earnings are projected to increase around 3%, which would mark the weakest growth in two years. This mixed outlook, coupled with ongoing geopolitical uncertainties and fluctuating economic indicators, underscores the dynamic and responsive nature of the markets to both global events and corporate fundamentals.
