10% in 10 days: US equities ignore Middle East war and stage a stunning rebound

From geopolitical shock to market stress

The end of March was brutal for United States (US) equity markets, with both the S&P 500 and the Nasdaq 100 shedding roughly 5%.

The primary catalyst for that decline was an escalation in geopolitical tensions following Iran’s refusal to reopen the Strait of Hormuz. This standoff prompted President Trump to issue a strict 48‑hour ultimatum, threatening to obliterate Iranian power plants, ‘starting with the biggest one first’.

While concerns eased marginally after that deadline was pushed back into early April, the underlying reality remained grim. With the Strait effectively closed and key energy producers forced to shut supply due to drone strikes or maxed‑out storage facilities, all the ingredients were in place for an escalation capable of completely derailing the bull market.

Then came what appeared to be a breakthrough, a two‑week ceasefire ahead of formal peace talks. Unfortunately, that initial optimism faded when weekend negotiations ended in frustration without a signed agreement.

In response, the US President played what we described earlier this week as his ‘Trump Card’, a US naval blockade of the Strait targeting Iranian ports. This aggressive tactic appears to have forced the issue, paving the way for another round of talks in Pakistan this coming weekend.

Markets look through the noise

This dizzying sequence of events in April has culminated in a spectacular market rally. The Nasdaq has now risen for 10 consecutive sessions, marking its longest winning streak since late 2021, while the S&P 500 closed overnight more than 10% above its March low of 6316.

While the situation in the Strait of Hormuz remains extremely tense, markets are, by their very nature, forward‑looking. At present, equities are actively pricing in the end of this geopolitical chapter rather than dwelling on the current stalemate.

Take the nuclear negotiations, for example. Iran appears prepared to halt uranium enrichment for five years, whereas the US is demanding 20. A compromise somewhere in the middle, perhaps around the ten‑year mark, feels realistic and within reach.

Once a nuclear agreement is reached and normal traffic resumes through the Strait, the US administration can comfortably pivot. It could declare a major foreign‑policy victory -pointing to significant wins like the recent regime change in Venezuela alongside a new Iranian nuclear deal - before turning its attention towards stimulating the domestic economy and pushing for Federal Reserve (Fed) rate cuts ahead of the mid‑term elections.

Couple that forward‑looking outlook with the ongoing strength of the artificial intelligence (AI) trade heading into reporting season, and it becomes apparent why sentiment has shifted so rapidly. Naturally, this blistering rally has also raised the bar significantly around valuations and for what will qualify as a ‘good’ set of earnings results.

It has been a remarkable 10 days for US equities. While a short‑term pause would not be surprising ahead of record highs, the path of least resistance remains firmly higher.

Nasdaq 100 technical analysis

The Nasdaq 100 began a correction after hitting its late‑October record high of 26,182, a move that was later reinforced by a clear double‑top formation near 26,165 in late January.

The correction gathered pace in late March as the index broke decisively below its 200‑day moving average (MA), followed by a break of the November low at 23,854. This drove the Nasdaq down to a solid band of horizontal support near 23,000.

The rebound since then has been striking.

As long as the Nasdaq 100 holds above support near 24,200, the October 2025 low and the level from which it gapped higher last week, we believe the correction likely bottomed at the late‑March low of 22,841. From here, and following a brief period of consolidation ahead of record highs, we continue to expect a retest and eventual break of the 26,182 record high, before a move towards 27,000.

Nasdaq 100 daily candlestick chart

Dow Jones technical analysis

In our Wall Street updates last month, we highlighted that the Dow Jones had formed a classic head‑and‑shoulders topping pattern from the 50,512 high, with the neckline sitting around 48,500 - 48,400.

The decisive daily close below that neckline in early March triggered a sharp sell‑off. The index reached our projected target of 46,500 in mid‑March before extending lower to the late‑March low of 45,063.

The rebound since then has been equally impressive. As long as the Dow Jones holds above support near 46,800, which coincides with the 200‑day MA and last week’s upside gap, we believe the correction likely bottomed at 45,063, and that a retest of the 50,512 high is now underway.

Confidence in this view has increased following the index’s break and close above horizontal resistance at 48,400 - 48,500.

Dow Jones daily candlestick chart

• _{Source: TradingView. The figures stated are as of 15 April 2026. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}