Equity markets surge on Strait of Hormuz reopening. The stock market posted three new all-time highs last week with a 4.5% weekly gain following Iran's decision to reopen the critical shipping lane after a two-week closure. Nasdaq and micro-cap stocks led the rally, with Big Tech regaining leadership as investors rotated heavily into growth, momentum, and technology names. Energy stocks became the primary funding source for this risk-on rotation, as investors sold defensive positions and commodities. The Magnificent Seven stocks particularly benefited from renewed optimism. However, portfolio managers remain cautious about Middle East stability and whether this rally can sustain itself. Cash reserves are being carefully managed as uncertainty persists around geopolitical tensions and their market impact.
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