Explained — What prompted S&P 500 to rebound and recover all its losses for 2026 on Monday

Benchmark indices on Wall Street reversed early losses on Monday, April 13, and ended with substantial gains. The initial losses were due to the rise in oil prices, uncertainties surrounding the Iran deal, and below-par results from banking giant Goldman Sachs.The Dow Jones reversed 700 points from the lows of the day to end with gains of 300 points. The S&P 500 also gained nearly 100 points from the day’s low, ended with gains of 1%, and also turned positive on a year-to-date basis, reversing all the losses made during the Iran war. The tech-heavy Nasdaq ended 1.2% higher, outperforming its peers, having reversed over 400 points from the day’s low.

What Caused The Reversal

The reversal came after US President Donald Trump said that Iran still wants to make a deal following the failed talks in Islamabad and the US navy beginning to block the Strait of Hormuz.
Goldman Sachs also reversed half of its losses after missing results estimates on two important parameters, thereby contributing to the recovery in the Dow.

What Do Experts Say

“The oil retracement, in combination with bearish positioning, has fueled the equity rebound,” said JonesTrading Chief Market Strategist Michael O’Rourke. “Overall, investors doubt the veracity of headlines, but they don’t want to be caught on the wrong side of them either.”Ulrike Hoffmann-Burchardi, CIO Americas and global head of equities at UBS Global Wealth Management believes that given the economic costs of higher oil prices and with the immediate turn of events being highly uncertain, he believes that investors should avoid attempts to “trade geopolitics.”

Morgan Stanley’s Mike Wilson believes that the strong earnings backdrop is preventing steeper losses in the S&P 500. Analysts are expecting this quarter to see earnings growth of 12% among S&P 500 companies.

(With Inputs From Agencies)