S&P 500 Surges 1% Defying Hormuz Blockade — Oil Reverses From $104, Goldman Beats but Falls, Tech Leads

Wall Street delivered one of the most defiant sessions of 2026 on Monday, shrugging off a weekend blockade announcement in the Strait of Hormuz and staging a broad-based, tech-led rally that left the S&P 500 well above every pre-market estimate — including ours. The benchmark index surged 1.01% to close at 6,885.91, smashing through this morning’s AlphaEdge predicted range of 6,765–6,825 by more than 60 points.

The session’s defining story was crude oil’s stunning intraday reversal. WTI spiked above $104 per barrel in overnight trading after the Pentagon formally announced a naval blockade of the Strait of Hormuz on Sunday evening, but the contract collapsed $12 during regular hours to settle at $92.09 — still up 2.8% from Friday, but a world away from overnight panic levels. Iranian President Ebrahim Raisi’s midday comments suggesting “a deal remains within reach” proved the catalyst, and crude’s capitulation unleashed a wave of dip-buying across equities.

Technology led the charge, with the XLK ETF gaining 2.10%. Microsoft surged 3.64% and Salesforce jumped 4.76%, while the VIX collapsed from 21.15 premarket to 19.12 at the close — a clear signal that the market’s fear gauge was in full retreat. Goldman Sachs beat first-quarter earnings expectations on record equity trading revenue, but shares fell 1.87% as fixed-income weakness and rising credit loss provisions spooked investors. Tomorrow’s slate — JPMorgan, Wells Fargo, Citigroup, and BlackRock — will determine whether Goldman’s FICC miss was an outlier or a warning.

Closing Scoreboard

What Happened

Markets opened cautiously Monday morning after the Pentagon’s Sunday evening confirmation that the U.S. Navy had established a formal blockade of the Strait of Hormuz. WTI crude touched $104 in overnight futures, European benchmarks opened sharply lower, and S&P 500 futures were underwater — this morning’s AlphaEdge preview flagged a deterioration toward 6,765 in the bear case.

But the selling never materialized on the cash open. Within the first 90 minutes, buyers emerged aggressively in mega-cap tech, with Microsoft and Salesforce each printing multi-percent moves higher. The catalysts were twofold: first, Iranian President Raisi’s comments around midday suggesting a diplomatic resolution was still achievable sent crude into freefall — Brent peaked at $103.86 intraday before settling at $98.27, while WTI collapsed from $104+ to $92.09. Second, Goldman Sachs’s premarket earnings report, despite its FICC stumble, demonstrated that equity trading desks had posted record revenue — reinforcing the thesis that institutional activity remains robust.

The VIX’s plunge from 21.15 to 19.12 told the real story. Fear evaporated as the session progressed, and by mid-afternoon the S&P had broken decisively above 6,850 and kept running. The Russell 2000’s 1.50% outperformance confirmed the breadth of the move — this was not a narrow mega-cap rally but a genuine risk-on pivot. Small caps, which are more sensitive to domestic economic conditions and cost-of-capital dynamics, typically underperform when oil spikes threaten to reignite inflation. Their outperformance Monday tells you the market does not believe this blockade will persist.

Mega-Cap & Key Movers

The standout theme across the leaderboard was software and cloud. Salesforce and Microsoft both moved sharply on growing conviction that AI-driven enterprise spending is accelerating into the back half of 2026, even as traditional SaaS names face secular headwinds. Broadcom’s 2.21% gain reflects the continued AI infrastructure buildout thesis. Meanwhile, the payment networks — Mastercard and Visa — rallied on signs that consumer transaction volumes remain healthy despite the inflationary backdrop from elevated energy costs.

Sector Breakdown

Nine of eleven sectors closed green. Technology’s 2.10% gain powered the index, with financials close behind at 1.75% ahead of tomorrow’s megabank earnings gauntlet. The only meaningful red came from the defensive corners: consumer staples (−1.00%) and utilities (−1.21%) were sold as money rotated decisively into cyclicals and growth. Notably, energy gained just 0.30% despite oil being higher on the day — the sector’s muted performance suggests traders view the Hormuz premium as temporary and are reluctant to chase crude-exposed names at volatile levels.

Global Markets

Europe

European benchmarks absorbed the worst of the Hormuz shock, having opened into the overnight oil spike and closed before the U.S. session reversal. The STOXX 50 fell 0.36%, the DAX slipped 0.26%, the CAC 40 lost 0.29%, and the FTSE 100 dipped 0.17%. Spain’s IBEX 35 underperformed with a 0.99% decline, weighed by energy-intensive industrial names. European markets will likely play catch-up on Tuesday if oil remains below $100 and U.S. futures hold overnight gains.

Asia

Asian markets had traded mixed to lower on the initial blockade headline. The session was dominated by energy-security concerns, with Japan’s Nikkei and South Korea’s KOSPI both weaker on oil-import vulnerability. Chinese mainland indexes showed relative resilience, supported by continued domestic stimulus expectations. Tuesday’s Asian session will be the first to react to Monday’s dramatic U.S. reversal.

Fixed Income & Commodities

The Treasury market mirrored the equity session’s risk-on pivot. The 10-year yield eased to 4.31%, down from 4.335% in the morning, as the oil reversal dampened re-inflation fears. The 2-year slipped to 3.81%, and the 2s/10s spread held at a positive 50 basis points — the yield curve remains in steepening mode, which historically signals economic expansion rather than recession.

Crude oil was the story of the day. WTI spiked above $104 in overnight trading after the Pentagon confirmed the Hormuz blockade, the highest level since the early-2023 energy crisis. But President Raisi’s conciliatory comments, combined with reports that back-channel diplomacy via Oman was ongoing, sent crude into a dramatic reversal. WTI settled at $92.09 (+$2.51, +2.80%), while Brent closed at $98.27 (+$3.07, +3.22%) after touching $103.86 intraday. The $12 WTI swing from overnight peak to settlement was one of the largest single-session reversals in recent memory.

Gold settled at $4,763 per ounce, down $24 (−0.51%). The decline was telling — gold’s traditional safe-haven bid was overwhelmed by the aggressive risk-on rotation out of defensive assets. The dollar (broad DXY at 118.86) held relatively steady, while EUR/USD firmed to 1.1760 (+0.30%). Bitcoin surged 3.46% to $73,205, with the crypto market reading the equity rally and oil reversal as a signal that the worst-case geopolitical scenario was priced out.

Corporate News

Goldman Sachs Q1: Beat on Equity Trading, Miss on FICC

Goldman Sachs reported first-quarter earnings that beat consensus on the top and bottom lines, fueled by record equity trading revenue and a jump in M&A advisory fees. However, the fixed income, currencies, and commodities (FICC) division disappointed, and the bank substantially raised its provisions for credit losses — a data point that rattled sentiment. CEO David Solomon acknowledged on the conference call that the Iran conflict was “slowing dealmaking activity” and struck a cautious tone, noting that “things rarely move in a straight line.” Shares fell 1.87% to $890.79 despite the earnings beat. UBS maintained its Neutral rating with a $930 price target.

Private Credit Stress Surfaces

Goldman’s rising credit loss provisions fed into a broader narrative around private credit stress. Fears that AI disruption could erode software company earnings — and weaken their ability to service debt — have rattled the multi-trillion-dollar private credit industry, prompting a wave of investor withdrawals and fund gates. This is a developing theme that bears close monitoring through the rest of bank earnings season.

Insurance Sector Under Pressure

Mizuho significantly cut price targets across the insurance sector, slashing estimates on Prudential, MetLife, Lincoln National, Equitable Holdings, Corebridge Financial, and Aflac. The cuts reflect concerns around elevated credit risk and potential investment losses tied to the broader Hormuz-driven volatility in fixed income markets.

Anthropic Cybersecurity Meeting

In a notable development, Treasury Secretary Bessent and Fed Chair Powell convened an urgent meeting with major bank CEOs to discuss cybersecurity threats from Anthropic’s new Mythos AI model. The meeting underscores the rapidly growing intersection of AI capability and financial-system risk — a theme that is likely to generate regulatory headlines in coming weeks.

Economic Data

No major domestic data releases were scheduled for Monday. However, the market continued to digest last Thursday’s March CPI print of 3.3% year-over-year, which showed gasoline prices surging 21.2% month-over-month — the largest single-month spike since records began in the 1960s. Cumulative CPI since January 2021 has now reached 26%. The market’s ability to rally despite that re-inflation backdrop suggests investors are betting the Hormuz premium will prove transitory once diplomacy succeeds.

After-Hours Activity

After-hours activity was muted. Goldman Sachs (GS) traded essentially flat at $890.50–$891.57 in the aftermarket, suggesting the market had fully digested the earnings report by the close. Netflix (NFLX) was quoted at $103.19–$103.23 in extended trading. The real fireworks will come from tomorrow’s premarket as JPMorgan, Wells Fargo, Citigroup, and BlackRock all report before the opening bell.

The AlphaEdge Take

Monday’s session was a masterclass in how modern markets price geopolitical risk. The Hormuz blockade — a genuine, material threat to 20% of the world’s seaborne oil trade — produced exactly one trading session of fear premium before the market pivoted to pricing a diplomatic resolution. WTI’s $12 intraday collapse told you everything: institutional traders believe this crisis has an expiration date, and they are not willing to pay $100+ per barrel for longer than it takes to confirm that back-channel talks are progressing.

The sector rotation confirmed the conviction. Tech leading with utilities lagging is not the positioning of a market bracing for a protracted energy war — it is a market that has stress-tested the worst case and decided it will not materialize. The Russell 2000’s 1.50% outperformance added an exclamation point. Small caps are the most rate-sensitive and cost-sensitive segment of the equity market. If the oil shock were going to feed through into sustained re-inflation and tighter monetary policy, small caps would have been the first to break. They didn’t. They led.

That said, tomorrow is the real test. Four megabanks report simultaneously, and the market will parse every line of their credit loss provisions with surgical precision. Goldman’s FICC miss and elevated provisions were dismissed as idiosyncratic today, but if JPMorgan or Citigroup report similar trends, the narrative could shift abruptly from “buy the dip” to “credit cycle turning.” The private credit stress emerging around AI-disrupted software borrowers is not a fringe concern — Bessent and Powell’s emergency cybersecurity meeting with bank CEOs suggests the government is watching this space closely.

We are in the early innings of a week that will define the second quarter. The S&P 500 recaptured 6,880 and is pushing back toward the January 27 all-time high of 6,978. Oil’s failure to hold above $100 is an enormous psychological victory for bulls. But 800 ships are still stranded in the Persian Gulf, and a single headline from Tehran could send crude right back to triple digits. Stay long the trend, but hedge the tail.