Investors remain focused on developments in U.S.-Iran relations, with news of a ceasefire and an open-for-business Strait of Hormuz firing up investor optimism on Friday. But some economic and corporate news will also get attention this week. The conflict has implications for oil prices, inflation and consumer spending. New information on the latter will land with Tuesday’s release of March U.S. retail sales data: Investors are keen to see how consumers are handling one of the largest jumps in inflation in years ahead of the Fed’s policy meeting next week and tax refunds often bolstering spending around this time of year. (Observers generally expect the central bank to hold rates steady, though hopes of rate cuts in 2026 haven’t faded completely.) Retail spending picked up 0.6% in February, after dipping slightly in January amid harsh weather, according to the Census Bureau.

Quarterly updates from the “Magnificent 7” tech stocks are set to start Wednesday, when Tesla reports results. Investors should have plenty to assess, with the company and CEO Elon Musk generating a flurry of headlines in recent weeks. Sluggish electric vehicle sales have weighed on Tesla shares, and the company is trying to transform into an emerging technology specialist. Recent announcements have shed light on Musk’s vision—and lifted share prices. Musk said Tesla finished designing a new chip and brought Intel in as a partner on its “terafab” chip production project. Investors are also thinking about how an initial public offering of Musk’s space company SpaceX could impact Tesla. Intel, meanwhile, is also set to report results this week.

Investing.com — U.S. stocks surged Friday after Iran declared the Strait of Hormuz “completely open” following a ceasefire announcement between Israel and Lebanon, driving all three major indexes to fresh records.

Oil prices fell sharply on the news as fears of supply disruptions eased.

The S&P 500 rose 1.2% to close at 7,126.06, crossing the 7,100 mark for the first time. The Nasdaq Composite gained 1.52% to finish at 24,468.48, notching its 13th consecutive winning session. The Dow Jones Industrial Average climbed 868.71 points, or 1.79%, to close at 49,447.43. The small-cap Russell 2000 also reached a fresh high, rising more than 2%.

The gains capped a strong week for equities, with the Dow up 3.2%, the S&P 500 up 4.5% and the Nasdaq advancing 6.8%.

But that momentum somewhat reversed at the start of this week, as oil prices rebounded and global equities retreated after a weekend of renewed Hormuz tensions. On Saturday, a day after Iran’s foreign minister had declared the strait open, Tehran reversed course, reasserting control over the waterway and attacking two Indian-flagged vessels.

Moreover, a U.S. Navy destroyer on Sunday seized an Iranian-flagged cargo ship that President Trump said had tried to evade a U.S. blockade on vessels traveling to and from Iranian ports.

Brent crude fell about 5% below $95, while S&P 500 futures edged lower. Equities in Europe and the U.K. also slipped.

This week, the path of interest rates moves to the spotlight when Kevin Warsh, Trump’s pick to lead the Federal Reserve, appears before Congress for his confirmation hearing on Tuesday.

March retail sales data, also due Tuesday, could offer further clues on the war’s economic impact.

Busy Q1 earnings week ahead

Investors will also be watching a busy week of corporate results in the days ahead, with nearly one-fifth of S&P 500 companies scheduled to report first-quarter earnings.

Tesla is up Wednesday, and will be the first of the so-called Magnificent Seven megacaps to report results for the quarter. Boeing, Intel, and Procter & Gamble are among the other notable names reporting in the coming days.

Strategists at Morgan Stanley forecast first-quarter earnings for S&P 500 companies to grow 12% year-over-year, with sales up 7%.

The Magnificent Seven megacaps are expected to post 25% earnings growth in 2026, compared with 11% for the rest of the index, though analysts are beginning to revise estimates higher for the broader group.

“Dispersion (both in terms of price and earnings) is elevated heading into the quarter and is expected to persist during earnings season, giving room for idiosyncratic price action,” Morgan Stanley strategists led by Michael Wilson said.

What analysts are saying about U.S. equities

JPMorgan: “We have consistently argued in the past weeks that one should not succumb to the bearish views – these quickly became mainstream for most – that a range of military, political and economic considerations argued against the conflict becoming prolonged, and that one should use the weakness to buy, with markets showing oversold signals from 23rd March, once the initial derisking became advanced. It appears that many got whipsawed, turning bearish as the market fell, and therefore will need to rebuild positions, which should provide legs to the rebound. We stick to the positive equity outlook, and believe resilient corporate earnings delivery will support this stance.”

RBC Capital Markets: “What we’re seeing at the moment is that the S&P 500’s market cap-weighted P/E has started to move up but remains well below last fall’s highs. Looking at U.S. equities relative to non-U.S. equities, we currently see a relative multiple that’s in line with its five-year average, and that’s only slightly above its 20-year average. The most recent high remains far off. In other words, from a valuation perspective—similar to what we are seeing in terms of AAII sentiment, where the highs of the past few years are also far off—there is still plenty of room to run.”

Evercore ISI: “Even with the chaos of War, corporate M&A activity has now surpassed the past highs. Improving market sentiment and a cycle that has yet to peak supports EVR ISI Strategy’s forecast of S&P 500 at 7,750 by year end. The potential for Bubble risks remain reined-in too as strong M&A is still subdued compared to total market cap. At the same time, EVR ISI Strategy is actively monitoring the potential for a “FOMO heat-up, especially as once-in-a-generation IPOs for mega-cap tech SpaceX, OpenAI and Anthropic eye a listing within the next year.”

Morgan Stanley: “Despite geopolitical risks, the earnings recovery remains intact, driven by the return of positive operating leverage. Our view that we’re in an early cycle backdrop remains out of consensus as does our call for a broadening in price/earnings leadership this year.”