The Dow Jones Industrial Average rose about 90 points, or 0.20%, to above 48,500 on Thursday. The S&P 500 gained 0.30% to above 7,000, and the Nasdaq Composite added 0.40% to a new high.
The Dow moved between about 48,275 and the close. For the week, the S&P 500 is up more than 3%, the Nasdaq is up more than 5%, and the Dow is up more than 1%.
Ceasefire Headlines Lift Markets
Donald Trump said he spoke with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu, and announced a 10-day ceasefire starting at 21:00 GMT. Iran’s parliament speaker linked a pause in Israeli operations in Lebanon to formal US-Iran talks, with a second round of talks reportedly under discussion.
Initial jobless claims fell by 11K to 207K in the week ended April 11, and the prior week was revised down by 1K to 218K. Continuing claims rose by 31K to 1.818 million in the week ended April 4.
Abbott fell about 4% after cutting guidance linked to a $23 billion acquisition, and Charles Schwab dropped nearly 4% despite record Q1 profit. PepsiCo rose 0.3% and Bank of New York Mellon gained 1.3%.
TSMC posted Q1 net profit of T$572.5 billion, up 58% year on year, with revenue up 35%. It guided 2026 capex towards the upper end of its $52 billion to $56 billion range.
After hours, DJIA futures traded near 48,760, while S&P 500 and Nasdaq 100 futures were up about 0.1%. Netflix reports after the bell, with Friday’s focus also on Middle East updates.
Options Hedging And Rotation
Given the market’s rally on fragile ceasefire hopes, we should consider buying protection against a sudden reversal. The Volatility Index (VIX) has fallen below 14 on this news, making put options on the SPX or QQQ relatively cheap insurance in case the deal falls apart. We saw last year in 2025 how similar geopolitical scares sent the VIX spiking above 20 overnight, and any sign of trouble from Israeli officials could trigger a repeat performance.
The strong labor market, with initial jobless claims at a low 207,000, reinforces the idea that the Federal Reserve will not be cutting rates soon. This resilience means the economy can withstand current rates, but it also puts a cap on how high the overall market can go. Therefore, we should be cautious with long-dated call options on broad market indices like the SPY and instead focus on sector-specific opportunities.
We are seeing a clear split between the lagging Dow and the high-flying Nasdaq, which is up over 5% this week compared to the Dow’s 1% gain. This divergence suggests a pairs trade, such as buying calls on the QQQ ETF while buying puts on the DIA ETF, to play the ongoing rotation into tech and away from some traditional industrial and financial names. The weak guidance from companies like Abbott Labs and Charles Schwab validates this defensive posture on older-economy stocks.
The AI trade received a massive boost from TSMC’s blowout earnings and strong capital expenditure guidance for 2026. This confirms the infrastructure spending cycle is not slowing down, making bullish bets on semiconductor ETFs like the SMH a priority for the coming weeks. With megacap tech continuing to lead, buying call spreads on names like NVIDIA or Microsoft ahead of their earnings looks like a solid strategy to capture further upside.
