Markets and premature optimism

This is quite odd:

The S&P 500 hit a fresh record high on Wednesday, reflecting investors’ optimism that a peace deal would be reached before the war in Iran could inflict significant damage on corporate America.

The benchmark stock index, which is widely watched across the world as a barometer of the health of the U.S. market, rose about 0.8 percent to close above 7,000 and higher than its previous peak, reached in January. The index had already erased its losses during the war in Iran and now sits 2 percent higher than it was before the fighting began in late February. 

Further down in the article, in the New York Times:

...some market watchers have been perplexed by the recent rally, which has taken place as the Strait of Hormuz, the narrow waterway on Iran’s southern coast that serves as a crucial shipping lane for the world’s oil supply, has remained throttled. Even if a formal peace deal is achieved between the United States and Iran, it could take a long time to get ships moving again and repair damage to ports and other oil facilities. High oil and gas prices have been feeding into rising U.S. inflation and tumbling consumer confidence.

The International Monetary Fund said on Tuesday that disruptions to oil markets could slow growth, fuel inflation and raise the possibility of a global recession. Even if the war is short-lived, the damage to the global economy has been done, the I.M.F. warned as it cut its forecasts for economic growth.

“What is a little strange is that there is a tendency by some to assume that it’s business as usual,” Christine Lagarde, the president of the European Central Bank, said on Tuesday when asked about the seeming exuberance of markets at an event held by Bloomberg in Washington.

Looking further down, it's hard not to get the impression that something seems "off":

JPMorgan Chase, the banking bellwether, on Tuesday reported a $17 billion profit for the first three months of the year, considerably more than analysts expected. The bank slightly lowered its forecast for profits in the remainder of the year, but still expects to earn more than $100 billion. Its executives expressed worry about energy costs weighing on consumers but stressed that the labor market remained healthy. Goldman Sachs, Citi and Bank of America also reported strong profits this week.

Bolstering the signal sent by the S&P 500, the Russell 2000 index of smaller companies — typically seen as more susceptible to economic shocks — has also rallied sharply. The index has risen over 12 percent since March 30 and began trading on Wednesday just 0.5 percent away from its January record. 

 Why are the banks being so profitable when recent American consumer confidence looks like this?: