Is This the Bottom for Tech Stocks? Wedbush Says Yes After Iran Ceasefire

TLDR

The US and Iran agreed to a two-week ceasefire, reopening the Strait of Hormuz to shipping US stocks surged sharply, with the Nasdaq up 3.5% and the Dow jumping over 1,300 points Oil prices cratered, with Brent crude falling nearly 16% and WTI dropping almost 18% Wedbush says the ceasefire creates a “risk-on” environment for tech stocks and the Magnificent 7 The firm believes the sell-off in software stocks is overblown and that a bottom is likely already in

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The US and Iran reached a two-week ceasefire agreement on Wednesday, triggering a broad market rally and a sharp drop in oil prices. The deal includes Iran lifting its blockade of the Strait of Hormuz.

President Trump announced the pause on Truth Social, writing: “I agree to suspend the bombing and attack of Iran for a period of two weeks. This will be a double sided CEASEFIRE!” Iran’s foreign minister Abbas Araghchi confirmed acceptance shortly after.

The Strait of Hormuz is a critical 21-mile-wide waterway for global energy shipping. Its reopening sent oil markets sharply lower almost immediately.

Brent crude futures fell nearly 16% to just above $91 a barrel. West Texas Intermediate crude dropped almost 18% to around $92 a barrel.

US equities responded strongly to the news. The S&P 500 climbed 2.5%, the Nasdaq Composite rose 3.5%, and the Dow Jones Industrial Average gained 2.9%, or more than 1,300 points.

E-Mini S&P 500 Jun 26 (ES=F)

Tech Stocks Seen as Key Beneficiary

Investment firm Wedbush said the ceasefire creates a “risk-on” environment for tech stocks. It specifically named the Magnificent 7 — Nvidia, Apple, Amazon, Tesla, Meta, Alphabet, and Microsoft — as likely beneficiaries.

Wedbush analysts wrote in a note to clients that a “nervous geopolitical backdrop over the past few months has created an oversold tech environment” for those companies and others in the AI space.

The firm said fears about AI companies like Anthropic and OpenAI displacing enterprise software are overstated. After speaking with chief information officers across the industry, analysts said the focus remains on partnering around AI workflows, not replacing existing products.

Wedbush called out Microsoft, Salesforce, and ServiceNow as stocks it sees as “very disconnected selloffs” relative to their AI monetization potential.

Rate Cut Bets Rise on Oil Price Drop

The sharp fall in oil prices also raised expectations that the Federal Reserve could resume interest rate cuts this year. Lower oil prices reduce inflation pressure, giving the Fed more room to act.

The Fed’s March meeting minutes were due for release on Wednesday and were expected to shed light on how policymakers have been weighing the Iran conflict’s impact on the economy.

On the earnings front, Delta Air Lines was set to report quarterly results before the opening bell. Investors were watching closely for the impact of the conflict after flights were suspended and jet fuel prices had spiked.

The ceasefire is set to last two weeks. Coordination with Iran’s Armed Forces will be required for ships to pass through the Strait of Hormuz during that period, according to the Iranian foreign ministry statement.

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