Geopolitical instability has hampered Wall Street throughout 2026, but could cooling tensions in the Middle East help to support a relief rally throughout different sectors? 

With President Trump suggesting that the United States could end the war in ‘two to three weeks,' optimism has begun to return to global markets. 

In the US, the S&P 500 posted its best day since May last year on the back of unconfirmed reports that Iranian President Masoud Pezeshkian is open to ending the war with guarantees, prompting a 2.91% rally. 

The Dow Jones Industrial Average also climbed 1,125.37 points, or 2.49%, as the prospect of an end to the conflict appeared to be nearing. 

Whether this is the beginning of the end to the ongoing uncertainty surrounding Iran and the Strait of Hormuz, which has sent global energy prices soaring, or whether the war could continue to confound markets, it's certainly worth investors taking a moment to explore how markets could recover following a widespread rise in investor appetite for defensive stocks and safe haven investing. 

With this in mind, let's take a deeper look at three key sectors and their leading stocks that could be well-positioned for growth should we finally see an end to the war in Iran: 

Shipping Stocks

The closure of the Strait of Hormuz has had a significant impact on shipping, with traffic passing through the busy shipping lane falling sharply. 

Data shows that an average of just five to six ships passed through the strait per day since the beginning of the conflict, marking a sharp fall from the average of 138 prior to the war. 

Not only were many companies directly affected by the inability to pass through the Strait of Hormuz, but many had to deal with far higher insurance premiums and rerouted demand throughout the conflict in March. 

"One of the biggest winners on Wall Street from a potential ceasefire will be transporters of raw materials like dry bulk specialists Star Bulk Carriers Corp. (NASDAQ:SBLK) and Golden Ocean Group Limited (NASDAQ:GOGL)," said Iván Marchena, Senior Economist at global brokerage brand Just2Trade.

"Both firms fell almost 20% following the shock of the war last month, and as optimism grows that there's an end in sight, both appear to be strong value plays looking ahead." 

High-Tech Growth

The war brought a trend where investors began to look away from the high-tech stocks that drove much of the S&P 500's growth over the past three years to favor more defensive options as uncertainty hampered high market-cap companies. 

Over the past month, the Roundhill Magnificent Seven ETF (MAGS) has shed more than 5% in value as investor fear has driven sell-offs for leading Wall Street tech stocks. 

However, a de-escalation in the conflict is set to drive more attention back in the direction of high-tech leaders and large-cap hyperscalers like Alphabet (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), and Meta (NASDAQ:MTEA), who are in a strong position to benefit from market shifts away from defense-focused investing back towards prioritizing growth. 

Consumer Staples Revival

As uncertainty surrounding the war's implications for inflation rates in the US contributed to uncertainty on Wall Street, traders priced in the chances of an interest rate hike by the Federal Reserve at 53% by the end of March. 

Should the conflict end in the coming weeks, we're likely to see the Fed bypass a hawkish reversion, helping to settle consumer fears and encourage more spending. 

With energy prices set to fall following the end of the conflict, we could see large-cap retailers like Walmart (NASDAQ:WMT) and Costco (NASDAQ:COST) build greater levels of momentum in a stable, lower-inflation environment. 

Because consumer staples generally hold up well during periods of uncertainty, they make for great stocks to hold when cautious optimism begins to sweep back into markets, offering a level of insulation against any unforeseen complications that could cause the conflict to drag on further. 

Global Benefits to De-Escalation

Given that the United States benefits from a more robust energy infrastructure and is less likely to be adversely affected by the closure of Middle Eastern airspace than nations in Europe, there are plenty of opportunities for investors to seek out higher levels of growth among European stocks as the war approaches a conclusion. 

Aerospace stocks that have US and UK institutional overlaps, like Rolls-Royce (OTC:RYCEY) (OTC:RLLCF), could be well-positioned for growth, while other consumer airlines that have direct links to United Arab Emirates locations like Dubai, such as EasyJet (OTC:ESYJY) (OTC:EJTTF) are likely to see market upturns. 

With this in mind, adopting a more diversified approach to your investment strategy could be a great way to benefit from the return of optimism to global markets in the short-term. However, it's also worth keeping defensive positions in mind, and bracing for more uncertainty could be a strong measure against further market shocks in the future.

Disclosure: On the date of publication, Dmytro Spilka did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer. Dmytro Spilka does not intend to make a trade in any of the securities mentioned above in the next 72 hours.

Featured image credit: Author

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.