Wells Fargo Securities lifted its S&P 500 year‑end target to 7,950 points from 7,300, signaling a 5% upside from Monday’s close. The lift follows easing macro worries and expectations that a pending US‑Iran ceasefire will ease inflationary pressure. Market sentiment has shifted from war concern to policy optimism.

The interim peace deal, set to sign in Switzerland on Friday, would end months of conflict and reopen the strategic Strait of Hormuz. Closing the Strait would curb oil‑price spikes that have fueled inflation fears, giving traders a clearer view of future commodity global dynamics.

Equity analysts point to a reset in Nasdaq sentiment, creating a tailwind for the AI trade. They recommend investing in semiconductor names and cyclical stocks, which could rally as defense loses ground once hostilities subside. The shift taps into a sector that has driven recent index gains.

Yet risks linger. Mid‑term elections could trigger a 10% swing in the second half, while political pressure on AI may dent the sector. Investors must weigh these uncertainties against the backdrop of a Federal Reserve that may pursue a “run it hot, inflate out” stance, which could keep stocks as an inflation hedge.