Nasdaq Tests 22,000 in Positive Start To Week – The Latest

U.S. equity markets opened the post-Easter week on a risk-on footing, with the Nasdaq Composite testing the psychologically significant 22,000 level and trading 0.39 percent higher at 21,965 by mid-morning, as traders weighed the prospect of a diplomatic breakthrough in the U.S.-Iran conflict against President Trump’s explicit Tuesday deadline for military strikes on Iranian infrastructure.

The technology-heavy index’s advance extended a powerful rally from the previous week, when the Nasdaq surged 4.4 percent to snap a bruising five-week losing streak, its strongest weekly performance since late November. The S&P 500 climbed 3.4 percent over the same period, while the Dow Jones Industrial Average added 3.0 percent, both indices also breaking their respective five-week slides.

Monday’s gains came despite, or perhaps because of heightened geopolitical uncertainty. Volatility remained elevated intraday as markets digested conflicting signals: on one hand, Trump’s profanity-laden warnings that Tuesday would be “Power Plant Day, and Bridge Day, all wrapped up in one, in Iran” if the Strait of Hormuz remains closed; on the other, reports of active diplomatic efforts involving Pakistan, Egypt, and Turkey aimed at securing a 45-day ceasefire framework.

Diplomatic Efforts

According to multiple sources, the U.S., Iran, and regional mediators have been discussing terms for a potential 45-day ceasefire that could lead to a permanent end to hostilities. The framework under discussion would include an immediate cessation of military operations, the reopening of the Strait of Hormuz and a pathway toward addressing longer-term nuclear and security issues.

Reuters reported that Pakistan has conveyed a detailed plan to both Washington and Tehran that, if agreed, would result in an immediate ceasefire and the reopening of the strategic waterway. The framework could potentially come into effect as soon as Monday, though sources cautioned that the chances of reaching a partial deal before Trump’s Tuesday 8 p.m. ET deadline remain slim. The 45-day ceasefire is just one of several ideas being floated in what remain fluid and high-stakes negotiations.

Trump is scheduled to hold a news conference with military leadership at 1 p.m. ET Monday, an event that markets will scrutinize for any signals about whether the administration is preparing to follow through on its infrastructure-strike threats or is open to extending the deadline to accommodate ongoing diplomacy.

The Week That Was

Last week’s rally did not come easily. The major averages experienced wild intraday swings as traders assessed each incremental update on the conflict, from pilot rescues and Israeli airstrikes to Iranian missile responses and mediation efforts. The sharp rebound from a five-week drawdown suggests a market that had become overly defensive, with positioning tilted toward safe-haven assets and away from growth-sensitive equities.

The Nasdaq’s outperformance relative to the broader S&P 500 signals that markets are willing to rotate back into higher-beta, duration-sensitive technology names, a classic risk-on move. That rotation implies traders are looking through near-term headline risk toward an eventual de-escalation scenario, even as the fundamental backdrop remains fraught with binary event risk tied to Tuesday’s deadline.

Trump’s explicit ultimatum creates a risky setup in the coming days. On one hand, the existence of a structured diplomatic off-ramp provides a plausible path to de-escalation that would quickly ease energy supply fears, narrow credit spreads, and support forward earnings visibility. Markets appear to be pricing a material probability that either a last-minute extension or a face-saving limited strike coupled with renewed talks will allow both sides to step back from the brink.

On the other hand, the more Trump locks himself into hard public red lines, the higher the perceived chance he must act militarily if diplomacy stalls. Any outcome that fails to reopen Hormuz or triggers large-scale civilian-infrastructure strikes could drive oil sharply higher, hit risk assets broadly, and price in deeper growth damage. Iranian officials have publicly rejected some U.S. proposals as excessive and have signalled that further attacks on civilian infrastructure would trigger harsher retaliation, potentially widening the conflict to other strategic chokepoints.

The tension between these scenarios explains both the equity rebound and the persistent intraday volatility. Short-term traders are using options to hedge around fixed political events, driving up implied volatility around the Tuesday deadline and Monday’s press conference. Long-only investors are beginning to re-risk after the five-week slide but remain acutely sensitive to headline risk.

From a technical perspective, the Nasdaq’s test of 22,000 represents a key resistance level. A decisive break above that threshold on sustained volume would signal that the recent rally has legs and could broaden into a more durable risk-on phase. The coming 48 hours could well prove critical in shaping the early stages of Q2. Trump’s Monday press conference and the Tuesday deadline represent binary events that could either validate the market’s optimistic positioning or expose it as premature.