Stock markets have had to absorb too many headlines about a possible deal between the US and Iran to end the war. The latest agreement was announced Thursday after the United States and Iran reached a 60-day memorandum of understanding to extend the ceasefire between the two countries. The deal was still awaiting approval from President Donald Trump. Average stock prices on major stock markets initially soared, but quickly tapered off. In the past, a similar headline would have sent stock prices soaring for several days. But this time, investors are facing “headline fatigue and a reluctance to trade on geopolitical signals,” according to JPMorgan’s trading desk. “While we are seeing rapid short covering in the wake of ‘optimistic Iran reports,’ a more definitive announcement or agreement by both governments will be needed to prompt a full risk-on rally in the stock market.” .SPX Mountain 2026-05-01 May S&P 500 stock prices have also soared this month, perhaps making it more difficult for investors to add exposure to already elevated levels. Through Thursday’s close, the S&P 500 had risen nearly 5% in May, hitting record highs along the way. The Dow Jones Industrial Average and Nasdaq Composite rose 2% and 8%, respectively, also at record levels. The rally extended beyond Big Tech, with the equally weighted S&P 500 index rising 2.4% to a new all-time high. The sharp rise in stock prices, coupled with headline fatigue between the US and Iran, begs the question of how high stocks will rise once a deal to end the war is announced. For now, JPMorgan traders believe that “we believe the risk of ‘defensive hostilities’ has increased and it may be prudent to reduce net exposure or start adding hedges.”
