ORLANDO, Florida, April 22 - U.S. equities surged on Wednesday as technology names and upbeat earnings expectations propelled markets higher, with the Nasdaq reaching a new intraday high and the S&P 500 recording a fresh closing peak. The advance came even as Brent crude climbed back above $100 a barrel and geopolitical tensions in the Middle East showed little sign of abating.
In this column I look at why a temporary boost to U.S. household finances from unusually large tax refunds may be short-lived, as higher gasoline prices tied to the Iran conflict could offset that relief. Before reading on, consider registering for an LSEG webinar on April 23 where safe-haven strategies in volatile markets will be discussed with my colleague Mike Dolan.
For further context on today’s market moves, here are several recommended reads that touch on the unfolding geopolitical and economic storylines:
- Iran seizes ships in Strait of Hormuz after Trump halts attacks
- From paint to planes, Iran war lifts costs, darkens outlooks
- Iran war may crush oil demand today, but send it soaring long term: Bousso
- Warsh’s impossible mission - Tame inflation and please Trump: Mike Dolan
- Germany halves 2026 growth forecast, raises inflation outlook amid Iran war
Today’s key market moves
- STOCKS: Asian markets were mixed, though Nikkei and KOSPI reached record highs. European and UK benchmarks were slightly lower. U.S. markets rallied strongly - new high for the Nasdaq and a new closing high for the S&P 500.
- SECTORS/SHARES: Seven of the 11 sectors in the S&P 500 rose while four fell. Technology led gains with a +2.3% move. Individual movers included GE Vernova +14%, Micron Technology +9%, Boeing +5%. Tesla rose 4% following Q1 results, while United Airlines fell 5.5%.
- FX: The dollar strengthened broadly, up about 0.5% versus the Swiss franc. USD/JPY moved nearer to the 160.00 level. Bitcoin climbed roughly 4% to a three-month high, with $80,000 coming into view.
- BONDS: The U.S. Treasury curve flattened for a third consecutive day. A 20-year U.S. Treasury auction saw an above-average bid-to-cover ratio, although primary dealers took a smaller share than normal.
- COMMODITIES/METALS: Oil rose about 3%, pushing Brent back above $100 per barrel.
Talking points
Oil back above $100 - Brent crude futures climbed above $100 a barrel, driven largely by concerns after a pause in direct U.S.-Iran negotiations. Following three weeks of declines, Brent has rebounded about 12% so far this week and is on pace for its second-largest weekly rise since the start of the war. Analysts at Rabobank anticipate the Strait of Hormuz may remain closed for up to another four weeks, potentially into late May. They warned that the probability of escalation to enforce that closure is very high, "which risks more energy supply damage."
Profit warming - Despite the backdrop of conflict, energy-price pressure, inflation and trade frictions, equity markets are exhibiting resilience. Earnings expectations are a central driver: analysts at JPMorgan have lifted their S&P 500 earnings-per-share forecast for the year to $330, citing optimism around technology and AI rather than an improved geopolitical picture. BlackRock has moved to an overweight stance on U.S. equities for similar reasons. The market question now is which institutions will follow with upward revisions.
FX swap shop - The regional fallout from the Middle East conflict and related energy disruptions is creating financial pressure for several countries. U.S. Treasury Secretary Scott Bessent said on Wednesday that a number of U.S. allies in the Gulf and in Asia have requested access to U.S. dollar swap lines; he did not identify them. President Trump has said he is considering a dollar swap line with the United Arab Emirates. Swap lines provide access to hard currency, helping to ease funding strains and stabilize local markets.
Near-term market movers to watch
- Further developments in the Middle East
- Energy market moves and oil price direction
- Flash purchasing managers' indices for Japan, the euro zone, UK and U.S. for April
- South Korea GDP preliminary Q1 reading
- UK public finances for March
- European Central Bank account of its March policy meeting
- Canada's PPI inflation for March
- U.S. Treasury auction of $26 billion of 5-year TIPS
- U.S. weekly jobless claims
- Corporate earnings including Intel, American Express and Blackstone
Market participants are balancing the immediate lift from improved corporate outlooks against the sustained shock to energy markets and the potential spillovers to currencies and funding in vulnerable economies. Which factor dominates will likely dictate the path for risk assets in the coming weeks.