The S&P 500 closed above the psychologically important 7,000 mark for the first time ever, setting a new record high. It took 53 days for the broad index to eclipse its prior peak. During that period, the market worked through fears about software makers exposed to AI and the armed conflict in the Middle East, where the ceasefire is about to expire. Yet the US equity market now seems convinced the war is over.

The US rally is outpacing gains in equity markets globally. That is unsurprising: the United States is geographically distant from Iran and Israel, and its economy is less dependent on oil imports than Asia and Europe. On the contrary, heightened competition in those regions for energy has allowed US exporters to ramp up shipments and profit.

Performance of equity indices

Still, the S&P 500 rally looks surreal. Fast rallies are not unprecedented. Earlier, however, they almost always started from the depths of bear markets. Today, the broad index is not even down 10% from January highs. One somewhat analogous episode occurred in March 2000 — shortly before the dot-com bubble burst. Is history repeating? Could a breakdown in US–Iran talks and renewed escalation in the Middle East send the US index into a correction?

For now, that appears unlikely. According to a Bloomberg scoop, both Washington and Tehran are exploring extensions to the ceasefire to allow more time for substantive peace talks.

Performance of US equity indices

In fact, April's S&P 500 rally is not primarily driven by investor fatigue with geopolitics or the US's convenient geography — and not merely by a strong earnings season. It is driven by FOMO, or Fear of Missing Out. Many traders missed last year's S&P 500 surge after the White House tariff-driven sell-off, and the ensuing TACO trade (Trump Always Chickens Out) was born. Those who missed the S&P 500's April 2025 rally are now trying to catch up. Institutional investors, the so-called smart money, started the rally, and the crowd is piling in, pushing equities ever higher.

Investors are not deterred by geopolitics or stagflation fears. The US economy has repeatedly shown resilience to shocks in the past. Why shouldn't it repeat the trick?

Technically, the daily chart shows that the S&P 500 is re-establishing its uptrend. Key support is the pivot level at 6,990. Traders should stick to a buy?the?dip or breakout strategy. Long targets to watch are 7,100 and 7,180.