The S&P 500 Just Shrugged Off the Iran War and Hit a New Record High. But Are Investors Too Bullish?

2 weeks ago 14

Anthony Di Pizio, The Motley Fool

Thu, April 16, 2026 astatine 8:43 AM CDT 5 min read

Geopolitical tensions person been raging successful the Middle East since Feb. 28, centered astir a nonstop struggle betwixt the U.S. and Iran. Oil prices person soared arsenic the portion grapples with attacks connected captious infrastructure and the effectual closure of shipping lanes successful the captious Strait of Hormuz.

As I constitute this, the terms of a tube of West Texas Intermediate crude is up 60% since the commencement of 2026. That means American consumers are facing higher prices not lone astatine the state pump, but for practically each merchandise that travels connected a boat, plane, oregon truck.

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The S&P 500 (SNPINDEX: ^GSPC) banal marketplace scale precocious plunged by arsenic overmuch arsenic 9% from its highest arsenic investors weighed the imaginable antagonistic impacts to firm net and the broader economy. However, sentiment turned connected a dime connected April 8 erstwhile the U.S. and Iran reached a ceasefire agreement. The scale has since recovered each of its losses, and it closed astatine a caller grounds precocious connected April 15.

But with lipid prices inactive elevated, are investors simply excessively bullish close now?

A Wall Street thoroughfare motion with American flags successful the backdrop.

Around 20 cardinal barrels of oil transited the Strait of Hormuz each time earlier the war, representing 25% of the world's seaborne supply, truthful the disruptions to this captious waterway stoked fears of a planetary vigor shortage.

However, the archetypal lipid proviso constraints weren't arsenic terrible arsenic primitively feared. Iran continued to vessel astir 1.8 cardinal barrels per time retired of its ports adjacent aft the struggle started, portion Saudi Arabia utilized its East-West pipeline to reroute astir 7 cardinal barrels per time to its ports successful the Red Sea instead. The United Arab Emirates besides has a strategical pipeline susceptible of moving 1.5 cardinal barrels per time beyond the Strait.

When you adhd the ceasefire to that proviso picture, I'm not amazed investors person piled into the banal marketplace with truthful overmuch condemnation implicit the past week oregon so. But immoderate unrelated developments person besides bolstered sentiment.

First, according to the latest non-farm payrolls study from the U.S. Bureau of Labor Statistics (released connected April 3), the system created a whopping 178,000 jobs successful March. It blew distant economists' statement estimation of 60,000 caller jobs, and it reversed the 133,000 occupation losses from February. An capitalist should ne'er bent their chapeau connected 1 information point, but this study was an aboriginal motion that the system mightiness beryllium taking higher lipid prices successful stride.

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