Global stocks advance as Strait of Hormuz reopens; Bank reports lifts markets

Global stocks rise following the reopening of the Strait of Hormuz

Global equity markets concluded the session with significant gains amidst rising expectations of a diplomatic resolution involving the United States, Israel, and Iran. According to reports from Reuters, Iranian Foreign Minister Abbas Araqchi declared that the Strait of Hormuz would remain open to all commercial vessels during the 10-day ceasefire agreement brokered between Israel and Hezbollah in Lebanon. Furthermore, US President Donald Trump indicated that high-level discussions between Washington and Tehran aimed at concluding hostilities could transpire as early as this weekend.

Consequently, market participants have interpreted the official commentary from both Tehran and Washington as a positive catalyst for equity markets. These developments are viewed as a precursor to a potential peace agreement, thereby reducing the systemic risks to global inflation and economic growth.

Nevertheless, it remains pertinent to acknowledge that logistical challenges persist, specifically regarding high insurance premiums and inventory bottlenecks. Furthermore, energy infrastructure throughout the Gulf has sustained damage; therefore, the specific details of any potential agreement will be crucial in determining the framework for regional infrastructure recovery.

In response to these geopolitical developments, global indices rallied strongly. In the United States, the S&P 500 advanced by 1.20%, the Nasdaq 100 appreciated by 1.29%, and the Dow Jones Industrial Average rose by 1.79%. European markets mirrored this strength, with the French CAC 40 advancing by 1.97%, the UK’s FTSE 100 increasing by 0.73%, the Spanish IBEX 35 rising by 2.18%, and the German DAX 40 appreciating by 2.27%. In Asia, the FTSE China A50 increased by 0.59%, while the Hang Seng gained 1.22%.

Major US banks exceed analyst expectations, underpinning market gains

The primary US benchmarks, the S&P 500 and the Nasdaq 100, attained new record highs at the close of this week's trading. While the prevailing optimism is primarily attributed to hopes of a conflict resolution in the Middle East, the higher-than-anticipated Q1 2026 results from major banking institutions have provided further impetus for investor confidence and elevated valuations.

On Monday, Goldman Sachs outperformed forecasts for both total revenue and earnings per share (EPS), reporting $17.23 billion of revenue and $17.55 per share respectively. These results represent a year-on-year (YoY) growth rate of 14.4% in revenue and a substantial 24.3% increase in EPS.

By Tuesday, JPMorgan, Citigroup, and BlackRock had similarly exceeded market consensus estimates. JPMorgan recorded a YoY revenue increase of 10%, with EPS rising by 17%. Citigroup demonstrated even greater momentum, with total revenue increasing by 14% and EPS surging by 56%. Meanwhile, BlackRock achieved a revenue growth rate of 27% and a 10.9% increase in EPS. Although Wells Fargo’s revenue did not exceed analysts’ estimates, the firm still generated a YoY growth rate of 6.4%, accompanied by a 15% increase in EPS.

The trend continued into Wednesday, with Bank of America and Morgan Stanley reporting results ahead of analyst projections. Bank of America recorded a 10.6% YoY increase in revenue and a 23% rise in EPS. Morgan Stanley concluded the first quarter with a 16% YoY increase in revenue and a significant 31.9% rise in EPS.

Finally, on Thursday, Charles Schwab exceeded forecasts for both revenue and earnings. The financial services giant reported a YoY revenue growth rate of 15.7% and a 37% increase in EPS.

In summary, the financial sector has demonstrated robust performance throughout Q1 2026. These solid results have underpinned the broader equity market advance and established a positive precedent for the remainder of the US quarterly earnings season, which will continue over the coming weeks.