U.S. stocks post biggest quarterly gains since 2020 amid Iran war worries

The Dow Jones Industrial Average closed above 52,000 for the first time on June 29, ending at 52,182.74, as U.S. stocks completed a quarter of broad gains that pushed all three major indexes sharply higher despite war-related tension involving Iran.

The S&P 500 rose 14.9% in the second quarter, the Nasdaq climbed 21.4% and the Dow added 12.9%, its strongest quarterly advance since late 2022. Technology shares drove much of the move, and a semiconductor index gained 3.9% as investors continued to favor the artificial-intelligence trade even after months of concern about valuations and the cost of big tech spending.

Alphabet gave the Dow an added lift, rising nearly 5% on its first day in the index. The stock’s advance helped offset a weak reaction to Nike, whose quarterly revenue edged past estimates but whose sales continued to fall in China. Nike shares finished the day at 41.05 before slipping further after the bell.

The rally was not a sign that investors had stopped worrying about the macro backdrop. Traders were still pricing in roughly a 64% chance of a Federal Reserve rate hike in September, underscoring how inflation and policy expectations remained central to market positioning. The economy itself was also doing part of the work: corporate earnings held up well enough to keep investors buying risk even as the fighting around Iran remained unresolved.

Diplomacy around the conflict stayed fragile. U.S. envoys were in Doha for meetings with mediators working toward an end to the war, but a Qatari official said the visiting Americans would not hold a high-level meeting with Iran. Iran said direct negotiations had not been scheduled, leaving the path to any durable ceasefire uncertain even as progress on talks supported shares.

Energy markets offered another reason stocks could look through the conflict. Analysts cut their 2026 oil price forecasts for the first time since the Iran war began, after five straight monthly increases, as the reopening of the Strait of Hormuz eased fears of prolonged supply disruption. In a Reuters poll, Brent crude was forecast to average $84.50 a barrel in 2026, down from $90.44 the month before.

That mix of firmer growth, steady earnings and calmer oil prices helped explain why the market treated Iran as a live risk rather than a sell signal. By the end of June, investors had pushed U.S. equities through one of their best quarters in years while still watching the Fed, the Strait of Hormuz and the uncertain diplomacy in Doha.