The market has recovered the decline: the S&P 500 is back in the green year-to-date

The market is doing what it does best — surprising exactly when most have already prepared for the worst-case scenario. After a nervous start to the year and a series of geopolitical headlines, investors received a signal that is hard to ignore: the stock market has not just stabilized, but has effectively erased the losses of 2026.

Even the tension around the Strait of Hormuz, which not long ago seemed capable of breaking sentiment, failed to disrupt the current momentum. Monday trading began with elevated volatility but ended with confident gains. This is an important nuance: the market is not ignoring risks, but it is no longer reacting to them with panic.

The key indicator — the S&P 500 — gained about 1% during the session and moved back into positive territory for the year, showing growth of around 0.6%. In numerical terms, this may seem modest, but from a psychological perspective — this is a turning point. The index has returned to positive territory, meaning the market has officially “digested” previous drawdowns.

An even more impressive performance is being shown by the Nasdaq Composite. The technology sector has risen for nine consecutive sessions — such a sustained and confident uptrend has not been seen since late 2023. This is no longer just a rebound, but a full-fledged rally with participation from major players.

Market breadth also confirms the strength of the move. The Russell 2000, reflecting small-cap companies, gained about 1.5% and officially exited correction territory. This is an important signal: the rally is no longer narrow and is beginning to spread across a wider range of companies. When small businesses join the move, it often indicates growing investor confidence in the economy as a whole.

Against this backdrop, analyst rhetoric is also shifting. A number of investment houses, including Business Daily, have already raised their recommended equity allocation to 60–80%. Put simply — the market is becoming “investable” again rather than “defensive.”

At the same time, it cannot be said that the external environment has become ideal. Oil prices remain high, around $98 per barrel, which is traditionally seen as a headwind for the economy. However, current dynamics show something interesting: businesses are adapting. Companies continue to find growth opportunities even in a high energy cost environment, and investors continue to find entry points.

Particular attention is now focused on the start of the earnings season. This week, the market will closely watch results from major banks such as JPMorgan Chase and Wells Fargo. Their reports traditionally set the tone for how the economy is perceived — from lending to consumer activity.

Technology giants such as TSMC and ASML are equally important. Amid the ongoing AI boom, they are shaping expectations for growth in the tech sector. If their results are strong, this could serve as fuel for the continuation of the rally.

All of this creates a rather unusual picture. On one hand — geopolitical risks, high oil prices, and recent volatility. On the other — steady index growth, broader participation in the rally, and a return of optimism.

The market seems to be saying something simple: bad news is already priced in, while good news is still ahead.

What does this mean in practice? This is not the moment to afford the luxury of “not looking at your portfolio.” The period ahead of the peak of earnings season is a time when the balance of power can shift very quickly.

Investors should reconsider their asset allocation, look for imbalances, and ask a simple question: does the portfolio reflect the current market, or is it still shaped by the fears of the beginning of the year?

Special attention should be paid to the technology sector. It is setting the pace right now, and it will largely determine whether the current rise turns into a long-term trend or remains an impressive but temporary episode.

Ultimately, the market once again returns us to a basic principle: it does not wait until things feel “comfortable.” It rises when most are still uncertain.