Late Trading: The S&P 500 continues last week's gains as the market focuses on Middle East tensions

Beijing time in the early hours of April 7, U.S. stocks held onto their gains into Monday’s late trading, with the S&P 500 rising on Monday and continuing last week’s rally. The market continued to focus on the situation in the Middle East. Reports said Iran and the United States are seeking a ceasefire, but Trump claimed he could eliminate Iran as early as Tuesday, and the U.S. defense secretary previewed a major strike against Iran.

The Dow gained 119.60 points, up 0.26%, to 46,624.27; the Nasdaq rose 110.54 points, up 0.51%, to 21,989.73; and the S&P 500 rose 24.86 points, up 0.38%, to 6,607.55.

According to reports, the U.S., Iran, and some regional mediators are discussing the terms of a potential 45-day ceasefire agreement, which could ultimately end the war, but the likelihood of reaching partial agreements before Tuesday’s deadline is low. It is important to be clear that a 45-day ceasefire is just one of many proposals.

In addition, there have been reports that Iran and the United States have received a plan to end hostilities; if an agreement is reached, there would be an immediate ceasefire and the Strait of Hormuz would be reopened. An anonymous source told the media that this framework proposal was put forward by Pakistan and could take effect on Monday.

However, on Monday, U.S. President Trump told reporters that Iran could be eliminated overnight—“and that night could be tomorrow night”—and warned Tehran that it must reach an agreement before Tuesday night or face consequences.

“An entire country can be eliminated overnight, and that night could be tomorrow night,” Trump said at a White House press conference.

U.S. Defense Secretary Hegseth said at a briefing that the largest strike since the start of actions against Iran would take place on Monday, and he warned that the intensity of the strike on Tuesday would be greater.

Last week, U.S. stocks performed strongly. The S&P 500 rose 3.4%, ending five straight weeks of declines, and recorded its best weekly performance since late November. The Dow and the Nasdaq also ended their respective five-week losing streaks. The Dow rose 3% last week, while the Nasdaq rose 4.4%.

However, these gains did not come easily. Last week, the major stock indexes saw sharp volatility as traders assessed the latest developments in the U.S.-Iran war and judged when the conflict might end.

On Sunday, Trump warned that if the Strait of Hormuz is not opened before Tuesday, the U.S. will strike Iran’s power plants and bridges. Late Monday, he said that although he wants to take Iran’s oil, “there will be no further action.”

“What do I want to do? Take the oil—because the oil is right there, waiting to be taken,” he continued. “They can’t do anything about it. Unfortunately, the American people want us to go home.”

Early this week, oil prices swung violently amid volatile trading. U.S. West Texas Intermediate crude oil for the May contract latest rose 1% to above $112 per barrel. International benchmark Brent crude rose 1% to above $109 per barrel.

Michael Rosen, chief investment officer of Angeles Investments, said: “The market may be underestimating how chaotic the world economy is. I think the direct and intermediate-term impact of energy disruptions may be underpriced by the market, which means energy prices will remain high for a longer period of time.”

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Editor: Zhang Jun SF065