Wall Street Daily (April 14): US stocks reversed to close higher on Monday, Nasdaq 100 marked a nine-day winning streak; Iran tensions continued to weigh on the market; software sector surged, financials strengthened in tandem, Bitcoin soared

Summary: US stocks closed collectively higher on Monday, with the S&P 500 up 1.02% to 6886.24, Nasdaq up 1.23% to 23183.74, Dow Jones up 0.63% to 48218.25, and Russell 2000 small caps rising 1.52%; VIX edged down 0.57% to 19.12, as geopolitical risks marginally diminished but continued to sway the broader market. The US military's blockade of Iranian ports took effect, triggering an early sell-off, but Trump's statement mid-session that 'the other side has contacted us' reversed sentiment, pushing all three major indices to intraday highs by the close, with the Nasdaq 100 logging a nine-day winning streak. A rebound in the software sector fueled tech gains, while record Q1 earnings from Goldman Sachs boosted financials. In major asset classes, gold fell 0.17% to $4741, crude oil rose 2.49% to $98.01 (hitting above $105 during the session), the US dollar index dropped 0.29% to 98.41, and Bitcoin surged 5.24% to $74,627.

I. Major Events

1. Tensions with Iran continue to influence US stock movements

Trump announced on Truth Social that the US military would impose a naval blockade on all vessels entering or exiting Iranian ports starting at 10:00 EST on April 13; CENTCOM also stated that the US military does not obstruct freedom of navigation for non-Iranian destination ports. Risk assets came under pressure at the open, but in the afternoon Trump said at the White House that 'the other side has contacted us,' prompting the market to bet that negotiations were still possible, driving US stocks higher into the close.

2. Software sector rebounds strongly after false breakout

The software sector saw its largest one-day rebound in nearly a year, with IGV reversing last Friday's 'false breakout' below the February-March lows (a brief breakdown followed by a rapid recovery) in one decisive move. Goldman Sachs called the tech sell-off a 'rare buying opportunity,' while Bernstein countered market concerns about Microsoft's high AI capital expenditures. Oracle surged 12.7% in a single day, and the Nasdaq 100 logged a nine-day winning streak.

3. Goldman Sachs Earnings Report: Record Revenue in Equity Trading

Goldman Sachs released its Q1 2026 results, with diluted EPS at $17.55; the equity trading division reported revenue of $5.33 billion, up 27% year-over-year, setting a record for quarterly performance. CEO Solomon mentioned on the earnings call that 'AI implementation in enterprises remains challenging,' leading the market to interpret the previous sell-off in the software sector as overdone, which subsequently strengthened financial stocks.

II. Major Trends

The leadership of small caps continues, with sharp contrasts between short and long-term performances. As of April 13, IWM gained 10.63% over the past two weeks and 1.60% over three months, making it one of the few core ETFs excelling in both timeframes; during the same period, SPY rose 8.57% in two weeks but dropped 0.84% over three months, while QQQ climbed 10.59% in two weeks but fell 1.29% over three months. This rally appears more like a 'reversal' from prior deep losses rather than the start of a new trend.

Market breadth marginally improved, with growth sectors leading in the short term. The equal-weight RSP increased by 5.72% over the last two weeks, indicating momentum spreading to 'non-leaders'; however, SPY still outperformed RSP (8.57% vs 5.72%), showing larger-cap stocks contributed more significantly. In terms of style, value remained dominant over a three-month window (SPYV +0.58% outperformed SPYG -2.05%), but growth notably led the recent rebound (SPYG +12.42% vs SPYV +4.53%), reflecting typical oversold recovery characteristics.

III. Market Sentiment

Overall sentiment recovered from early April's panic, yet risk pricing remains cautious. VIX stood at 19.12, down 0.57% intraday. Despite geopolitical tensions and oil price spikes, volatility edged lower, suggesting limited impact from geopolitical shocks, though levels above 19 remain elevated. CNN Fear & Greed Index hit 41, improving from 37 on April 10 but still below the neutral threshold of 45, indicating sentiment recovery lags behind price rebounds. CBOE Total Put/Call Ratio was 0.8569, slightly down from 0.8828 on April 10, signaling reduced hedging demand but still elevated, as funds have not fully shifted to an 'unhedged' mode.

IV. Market Scan

1. Index ETFs

All four major index ETFs closed higher. Russell 2000 small-cap IWM led with a 1.44% gain, adding to a cumulative rise of 10.63% over the past two weeks, making it the only core ETF outperforming across both short-term and three-month periods. Nasdaq 100 (QQQ) rose 1.03%, driven by a rebound in the software sector, marking its ninth consecutive positive session. Dow ETF (DIA) gained 0.60%, relatively lagging amid a risk-on trading day due to limited elasticity. Overall, capital continued to marginally flow towards small caps and growth sectors.

2. Sector Performance

Sector trends were clear: Technology XLK led with a 2.10% gain, followed closely by Financials XLF at 1.75%, while Utilities XLU fell 1.21%, reflecting a structure favoring high-volatility sectors and pulling back from defensive plays. Strength in tech was primarily driven by a 'reversal after a false breakout' in the software segment, with Oracle surging 12.7% acting as a single catalyst. Financials benefited from Goldman Sachs' earnings report, reinforcing expectations that 'volatility benefits investment banks.'

3. Seven tech giants

Microsoft surged 3.64%, providing one of the strongest supports of the day. A Bernstein report countered market concerns about Microsoft's AI-related capital expenditures, combined with Goldman Sachs' bullish stance on tech, accelerating the stock's rise in the afternoon. Apple fell 0.49%, underperforming on a day when the broader tech sector rallied, as worries about its AI deployment timeline persisted. Disparities within the M7 group widened, with funds favoring assets with 'clearer AI monetization paths.'

4. Chinese Equities

Chinese internet stocks performed strongly overall. Baidu led with a 3.32% gain, continuing to trade on its AI narrative (plans to spin off its Kunlunxin chip unit via a Hong Kong IPO); Bilibili rose 2.99% in a rebound; JD.com gained just 0.03%, nearly flat. Overall, Chinese stocks mainly followed broader market moves without significant new catalysts, retaining some elasticity but lacking a strong independent lead.

5. Cryptocurrencies

Bitcoin surged 5.24%, closing at $74,627. Related stocks showed divergence: Circle (CRCL) jumped 12.09%, while MicroStrategy (MSTR) rose 2.89%.

$S&P 500 Index (.SPX.US)$ $SPDR S&P 500 ETF (SPY.US)$ $NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $SPDR Gold ETF (GLD.US)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $Bitcoin (BTC.CC)$ $BTC/USD (BTCUSD.CC)$ $Ethereum (ETH.CC)$ $ETH/USD (ETHUSD.CC)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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