Stocks closed higher on Friday and for the week.

The Dow, which was the last of the big 3 indexes to make a new all-time high, made another one on Friday.

YTD, the Dow is up 5.24%, the S&P 500 is up 9.17%, and the Nasdaq is up 13.4%. Additionally, the small-cap Russell 2000 is up 15.6%, and the mid-cap S&P 400 is up 11.1%.

Optimism that a peace deal with Iran could be forthcoming has continued to underpin the market.

Granted, we've been hearing that for weeks with little progress to show for it. But it's been six weeks of a ceasefire. And it suggests a diplomatic solution to the conflict would be preferred.

On Saturday, President Trump said an agreement has been "largely negotiated," after talking with leaders from Saudi Arabia, the United Arab Emirates, Qatar, Pakistan, Turkey, Egypt, Jordan, Bahrain, and separately with Israel. The President also mentioned that the deal involves opening the Strait of Hormuz.

While he previously put the odds for a peace deal at "a solid 50/50," given Iran's stalling and unrealistic demands, it appears things may be closer than ever to get it done. The deal is still subject to finalization by all involved parties, not the least of which is Iran. But people close to the talks are calling it a "breakthrough."

So hopes are high that the Middle East conflict and effective closure of the Strait could finally be coming to an end.

Meantime, earnings season, which is winding down, has come in spectacularly better-than-expected.

The star of the season has been all things AI related. Strong sales and earnings, upgraded outlooks, and soaring AI demand was the theme. And comments from various CEO's suggest there's a lot more upside demand to go, which will continue to fuel record sales and earnings.

Last week's FOMC Minutes, while not packing any surprises, did underscore the split amongst policymakers, with some still expecting rate cuts, and others contemplating rate hikes if inflation remains sticky, or worse.

Kevin Warsh, was sworn in as the new Federal Reserve Chairman on Friday. The general belief is that he will advocate for a rate cut sooner rather than later.

But the markets are putting low odds on that happening this year. And cutting rates is not a one-man show. Will need 7 out of 12 policymakers to vote for it.

Nonetheless, it does appear Mr. Warsh will be steering in that direction. And we?ll see how many he can bring along with him.

We'll get another 327 companies on deck to report this week, including Trip.com, AutoZone, Marvell Technology, Costco, and Genesco to name a handful.

But earnings season is effectively over with roughly 95% of the S&P 500 constituents having already reported.

But what an earnings season it's been. And it's on pace to show a 24.1% EPS growth rate. Wow!

Q2'26 is expected to be pretty stellar as well with a projected 21.0% EPS growth rate. Q3 is forecast at 18.1%. And Q4 is forecast at 20.0%.

All great news for the market.

The economy has its challenges for sure. But earnings are a key driver. And it suggests plenty more earnings growth to go. And that should lift stocks along with it.

With these sharp double-digit earnings growth expectations throughout the year, I'm expecting another double-digit market gain as well. And I'm expecting 20%, if not more, as the historic AI boom continues.

See you tomorrow,