Traders work on the floor of the New York Stock Exchange during morning trading on May 4, 2026 in New York City.
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of S&P500 Ignoring Thursday’s headlines about the U.S.-Iranian trade hit in the Strait of Hormuz, it continued to rise in Friday trading, topping 7,400 for the first time. Prediction market traders believe there’s still fuel left in the tank.
The index is already up more than 16% from its March 30 low, but Kalsi traders believe there is a 59% chance the index will break above 8,000 this year. This is an 8% increase from current trading levels, and the index just topped 7,000 for the first time in January.
Prediction market traders aren’t the only ones getting bullish. RBC raised its 12-month price target for the index to 7,900 in a note Friday. Lori Carbasina, head of U.S. equity strategy, said the average and median of the five models the bank used to calculate the estimate was 8,100, suggesting there could be more upside to her forecast.
Stocks ignore what appears to be a long-term closure of the Strait of Hormuz, a key conduit for global supplies of oil, and the possibility of a renewed escalation of the war between the United States and Iran.
Investors are instead embracing an increase in artificial intelligence that appears to be firing on all cylinders. This drives up the stock prices of related companies, driving much of the profit growth enjoyed by the market and boosting GDP through increased private investment.
One Point Peter Boockvar, chief investment officer at BFG Wealth Partners, said: “AI technology trading has become so powerful that it is starting to displace everything else.” He added that even though stock prices have risen significantly since the ceasefire was announced, no one wants to miss out on the potential upside if the US and Iran reach a peace deal. “Momentum has a life of its own.”
Keith Lerner, chief investment officer at Trust Wealth, said the market’s sudden rally should be explained in light of the prewar situation, when major U.S. indexes traded in narrow ranges from late October to March. The current level is nearly 7% compared to the level S&P first posted in October.
S&P 500 since October 1, 2025.
Boockvard added that there is still a risk from Iran, even though the indicators don’t show it. He said the weakness in some consumer stocks shows there are isolated pains in the economy that could be a risk to the broader market.
Lerner agreed that while Iran has not gone away as a market concern, the hurdles for Iran to derail the rally are now high and will likely mean oil prices are back to their late March highs.
“It has to come back in a meaningful way, otherwise people will buy the market quickly,” he said.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
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