The Wall Street bull stands in the financial district near the New York Stock Exchange

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Stocks are back at all-time highs, and the rally can be chalked up to the clearing of two major headwinds investors have been dealing with for weeks: AI-related earnings jitters and macro fears tied to the Iran war.

Indexes were up again on Wednesday after the S&P 500 joined the Dow in record territory on Tuesday. Renewed optimism over the AI trade after weeks of jitters ahead of mega-cap earnings helped catalyze this week’s rally.

Here’s where major indexes stood shortly after the 9:30 a.m. ET opening bell:

• Nasdaq 100: 26,692.98, up 0.41%

Some of the fresh momentum arrived late last week, as Leopold Aschenbrenner’s Situational Awareness hedge fund melted down. Citadel swooping in to buy the AI-laden stock portfolio amounted to a vote of confidence in the tech trade, sparking a rally to cap off the week.

The second major bullish development this week has been the apparent softening of US-Iran tensions and new indications that a deal is near to reopen the Strait of Hormuz. That would dispel a major economic overhang that’s weighed on the market all summer.

“A fuller opening of the Strait would help alleviate investors’ concerns around prolonged inflation increases,” said Dominic Pappalardo, chief multi-asset strategist at Morningstar Wealth.

“Waning inflation fears translate into lower interest rates as investors will not require as much term premium further out the yield and could even reduce the need for the Fed to hike interest rates this year.”

Pappalardo also told Business Insider that strong earnings from some Big Tech leaders, including Microsoft and Amazon, have reinvigorated the tech trade, demonstrating that high capex spending is starting to drive growth for hyperscalers, something that’s been a key concern for many investors.

He also pointed to Palantir‘s stellar earnings report on Monday that propelled the stock nearly 30% higher in Tuesday’s session. The “otherworldly” commercial revenue acted as another catalyst that helped drive growth for tech stocks on Tuesday.

“The stock rallies seen in the last two days suggest there is a desire from market participants to see the AI stocks continue to move higher,” Pappalardo added. “The price action following any positive news seems to outweigh the actual strength of the news reflecting what could be described as potentially overly bullish sentiment.”

Other finance pros see more reasons to regard the recent AI recovery as an indicator of more gains to come. Marcus Sturdivant Sr, a managing principal at advisory firm The ABC Squared, noted that rather than falling into a bearish feedback loop after July’s intense volatility, the market showed a clear ability to shake off severe volatility.

Ken Mahoney, CEO of Mahoney Asset Management isn’t surprised by the latest show of strength either. He added that while the Nasdaq Composite and Nasdaq 100 were battling volatile conditions, the Dow and S&P 500 were both showing strength.

“If we can continue to see a risk on move and more rotation to tech, the Nasdaq will be the next index to make new highs hopefully, and those can be very good periods for momentum and high beta stocks to really ramp back up after some of these large declines we saw there,” he told Business Insider.

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Samuel O’Brient is an experienced financial markets and business journalist who has written extensively on a wide range of topics involving economics, technology and public policy. At Business Insider, he covers important macro and micro economic stories, including takes from leading economists and hedge fund managers, breaking IPOs,  corporate bankruptcies, meme stocks and short-selling. He also writes on other markets such as crypto, oil and real estate.He has interviewed many of the market’s most influential voices, ranging from top economists such as Mark Zandi and Richard Thalerto prominent investors including Danny Moses, Andrew Left, Anthony Scaramucci, Louis Navellier and Grant Cardone.Programs such as LiveNOW from Fox , Taking Stock and Ticker News have had Samuel on to discuss stock market and economic developments. His reporting has been cited by The New York Times DealBook, Bloomberg Radio, Forbes, Entrepreneur, Gizmodo and TheFutureParty.Samuel began at InvestorPlace, covering investing, retail trading and macro economic trends. Prior to joining Business Insider,  he served as a technology markets reporter at TheStreet. He is a graduate of Sarah Lawrence College and Trinity College Dublin.Samuel’s work has appeared in publications such as TipRanks, EV and Observer. When he isn’t chasing down stories, he can often be found browsing book and record shops. To reach Samuel, email him at sobrient@insider.com or connect with him on LinkedIn. He is also on Signal as Samuel Clemens. Popular Articles: A Nobel economist has a warning for meme stock tradersThe business school dropout who kicked off the Beyond Meat rally wants you to know he’s not Roaring Kitty 2.0A top economist who thinks we’re on the brink of a recession says he’s eyeing these 3 warning signsTrump’s 401(k) executive order marks big changes for retirement savings — and possibly puts your money at riskWhy hedge fund icon Ray Dalio says you shouldn’t invest in real estate in this economyAI bullishness is soaring, but pros see a major opportunity brewing in an overlooked corner of the market