--- title: "Traders bet that the US-Israel war is nearing its end, US stocks accelerate to a historic high, inflation risks still exist" type: "News" locale: "en" url: "https://longbridge.com/en/news/283201834.md" description: "Global financial assets rebounded significantly this week, as traders bet that the U.S.-Israel war is nearing its end, driving U.S. stocks to record highs. The S&P 500 recorded its largest monthly gain since 2020, supported by progress in ceasefire talks and the resilience of the U.S. economy. Despite the bullish sentiment in the stock market, the bond market appeared cautious, with short-term U.S. Treasury yields rising and market expectations for Federal Reserve rate cuts cooling. Oil prices fell back to around $90 per barrel, but the supply side has yet to return to normal, and the energy market remains tense" datetime: "2026-04-17T23:23:03.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283201834.md) - [en](https://longbridge.com/en/news/283201834.md) - [zh-HK](https://longbridge.com/zh-HK/news/283201834.md) --- # Traders bet that the US-Israel war is nearing its end, US stocks accelerate to a historic high, inflation risks still exist According to Zhitong Finance APP, global financial assets experienced a significant rebound this week, as traders generally bet on the U.S. and Israel's war against Iran, driving the stock market to new highs and weakening the dollar, while oil prices fell back to around $90 per barrel. Boosted by progress in the ceasefire, risk assets rose across the board. The U.S. stock index represented by the S&P 500 reached a historical high and recorded the largest single-month increase since 2020. Factors improving market sentiment include the ceasefire agreement between Israel and Hezbollah, as well as Iran reopening the Strait of Hormuz for commercial shipping. U.S. President Trump stated that Iran has agreed to indefinitely suspend its nuclear program, and the agreement to end the war is "basically complete," with both sides expected to reach a final agreement over the weekend. However, Iran has yet to confirm these statements. As risk appetite rebounded, volatility in cross-asset markets significantly decreased. Bank of America's cross-market risk indicator shows that the current pace of volatility decline is the second fastest in history, only behind the rebound phase at the beginning of the COVID-19 pandemic. At the same time, demand for the dollar as a safe haven weakened, and the exchange rate retraced gains made during the war, while previously short-selling stocks, quantitative funds were forced to switch to long positions, further pushing up the market. ![WeChat Screenshot_20260417164252.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260418/1776459756557814.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Data shows that the U.S. stock market rebounded from the war's low to a historical high in just three weeks, marking one of the fastest reversals in recent years. ![WeChat Screenshot_20260417164239.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260418/1776459737446184.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) Analysts point out that this round of increase is not entirely driven by the easing of geopolitical tensions. The resilience of the U.S. economy, strong corporate earnings, and the continued rise in demand for artificial intelligence also provide support for the market. J.P. Morgan Asset Management expects that the earnings growth rate of S&P 500 companies for 2026 has been revised up by nearly 3 percentage points, and even though the war has caused some drag on earnings, overall, a double-digit growth is still expected. In emerging markets, corporate earnings expectations have also reached new highs, indicating an overall improvement in global risk appetite. Despite the bullish sentiment in the stock market, the bond market is signaling a more cautious outlook. Short-term U.S. Treasury yields have risen significantly since the war, and market expectations for a Federal Reserve rate cut have cooled considerably, currently factoring in only about a 60% probability of one rate cut this year. ![WeChat Screenshot_20260417164301.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260418/1776459772632784.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg) At the same time, oil prices have retreated from their highs, but the reality is that the supply side has not yet returned to normal. Factors such as transportation disruptions, rising tanker freight rates, and declining inventories mean that the energy market remains tight, and a return to normal prices will take time. Some institutions warn that the current market may underestimate risks. Although investors generally expect the war to gradually ease, supply chains, energy infrastructure, and inflation expectations have been significantly impacted and are unlikely to be fully repaired in the short term. 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