Wedbush Declares Tech Stock Bottom Following US-Iran Ceasefire Agreement

Key Takeaways

• Washington and Tehran struck a temporary two-week peace deal, allowing ships through the Strait of Hormuz
• Major indices posted strong gains: Nasdaq climbed 3.5%, Dow soared over 1,300 points
• Crude oil plummeted with Brent down nearly 16% and WTI sliding almost 18%
• Wedbush analysts see favorable “risk-on” conditions emerging for technology names and Magnificent 7
• Investment analysts believe software sector declines were excessive and a market floor has been established

Financial markets posted significant gains Wednesday following news that Washington and Tehran had reached a temporary peace arrangement. The agreement, lasting fourteen days, lifts Iran’s maritime restrictions on the Strait of Hormuz.

The Strait of Hormuz represents one of the world’s most strategically important shipping channels at just 21 miles wide. News of its reopening triggered an immediate collapse in energy commodity prices.

Brent crude contracts plunged nearly 16% to settle just above $91 per barrel. West Texas Intermediate saw an even steeper decline of almost 18%, trading around $92 per barrel.

Equity markets across the United States posted robust advances. The S&P 500 surged 2.5%, while the Nasdaq Composite jumped 3.5%. The Dow Jones Industrial Average rallied 2.9%, translating to gains exceeding 1,300 points.

Technology Sector Positioned to Gain Most

Wedbush Securities indicated the ceasefire arrangement establishes favorable “risk-on” market dynamics for technology equities. The firm highlighted the Magnificent 7 group—Nvidia, Apple, Amazon, Tesla, Meta, Alphabet, and Microsoft—as prime candidates for upside momentum.

The research team dismissed concerns that AI firms such as Anthropic and OpenAI would significantly displace traditional enterprise software providers. After conducting conversations with chief information officers throughout the sector, analysts concluded that organizations prioritize collaborative AI integration rather than wholesale platform replacement.

Wedbush specifically identified Microsoft, Salesforce, and ServiceNow as companies experiencing “very disconnected selloffs” that don’t reflect their artificial intelligence revenue generation capabilities.

Declining Crude Prices Boost Federal Reserve Rate Cut Prospects

The dramatic decline in petroleum prices increased market speculation that the Federal Reserve might resume monetary easing later this year. Reduced energy costs diminish inflationary pressures, potentially providing policymakers greater flexibility.

The Federal Reserve’s March policy meeting minutes were scheduled for Wednesday release and were anticipated to provide insights into how officials assessed the Iranian conflict’s economic implications.

Regarding corporate earnings, Delta Air Lines prepared to announce quarterly financial results before market open. Market participants were particularly interested in evaluating how the geopolitical situation affected operations after flight cancellations and jet fuel cost increases.

The temporary peace arrangement will remain effective for fourteen days. According to the Iranian foreign ministry’s official statement, vessels will need coordination approval from Iran’s Armed Forces to transit the Strait of Hormuz during this interim period.

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