April 16, 2026 — Major U.S. stock indexes climbed to new peaks Wednesday, powered by optimism that the United States and Iran could extend a ceasefire and negotiate a broader peace agreement. The S&P 500 and Nasdaq 100 both closed at all-time highs.
According to a report from the Associated Press, the two nations have reached an “in-principle agreement” to prolong their current truce. The ceasefire was set to expire Tuesday. The potential extension, reportedly for two weeks, would allow more time for diplomatic talks.
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Market Performance and Sector Moves
The S&P 500 Index ($SPX) closed up 0.80%. The Nasdaq 100 Index ($IUXX) jumped 1.40%. The Dow Jones Industrial Average ($DOWI) was the laggard, dipping 0.15% as industrial stocks slumped.
Software and cybersecurity stocks led the charge higher, rebounding from recent losses. In the Nasdaq 100, Atlassian (TEAM) soared more than 10%. Datadog (DDOG) gained over 9%. ServiceNow (NOW) and Intuit (INTU) rose more than 6% and 7%, respectively.
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Microsoft (MSFT), up over 4%, was the top performer in the Dow. Cloudflare (NET) surged 6% after an upgrade from Piper Sandler, which called the company an “AI-winner to own.”
But not all sectors shared in the gains. Industrial stocks fell sharply on worries about the costs of potential U.S. metals tariffs. Carrier Global (CARR) dropped more than 9%, leading S&P 500 decliners. Caterpillar (CAT) fell over 3%, making it the worst performer in the Dow.
Economic Data and Fed Commentary
Wednesday’s economic reports presented a mixed picture. The April Empire State manufacturing survey showed general business conditions jumping to a five-month high of 11.0, far stronger than expected.
However, the National Association of Home Builders’ housing market index fell to a seven-month low of 34. That missed forecasts. The implication is that the housing sector may be losing momentum despite other areas of economic strength.
Comments from Federal Reserve officials leaned hawkish. Cleveland Fed President Beth Hammack said the central bank is still “persistently missing” its inflation mandate. She stated her baseline view is that the Fed will keep rates on hold for a “good while.”
The Fed’s latest Beige Book noted economic activity increased at a “slight-to-modest” pace in recent weeks. It also reported that energy and fuel costs rose “sharply” across all twelve Federal Reserve districts. This suggests persistent inflationary pressures.
Geopolitical and Commodity Context
The market’s positive reaction to the peace hopes comes amid ongoing tension. The U.S. military began a naval blockade of the Strait of Hormuz on Monday. President Trump has threatened retaliation for any Iranian resistance.
Iran has warned it would target all ports in and near the Persian Gulf if its shipping is threatened. The strait is a vital chokepoint, with about one-fifth of global oil and liquefied natural gas passing through it.
Despite the blockade and conflict, Iran exported roughly 1.7 million barrels of oil per day in March. WTI crude oil prices were little changed Wednesday.
Earnings Season and Other Movers
Earnings season is underway. Data from Bloomberg Intelligence projects first-quarter S&P 500 earnings will climb 12% year-over-year. Excluding the technology sector, growth is estimated at a much weaker 3%, which would be the slowest pace in two years.
Several individual stocks made big moves on specific news. Robinhood Markets (HOOD) surged more than 10% after the SEC approved changes to rules limiting day-trading activity for small investors.
Live Nation Entertainment (LYV) fell over 6%. A New York federal jury found the company illegally monopolized the live events industry and overcharged fans.
Morgan Stanley (MS) rose more than 4% after reporting stronger-than-expected Q1 equities trading revenue of $5.15 billion.
What Comes Next
Investors will watch for official confirmation of the US-Iran ceasefire extension. Market direction may hinge on the tone of upcoming diplomatic talks. The early stages of Q1 earnings reports will also be a major focus, providing a fresh check on corporate health.
Traders are also monitoring interest rates. The 10-year Treasury note yield rose to 4.276% Wednesday. According to futures market data, traders see only a 2% chance of a Fed rate hike at the April 28-29 policy meeting.
For more details on market regulations, see the U.S. Securities and Exchange Commission website. Historical market data is available from sources like Bloomberg Markets.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
