NEW YORK (CNN/Money) - Just when investors had got it in their minds that the war in Iraq may drag out for months, signs emerged that it might not take all that long.

At least this was the perception on Wall Street Wednesday morning, when traders were pushing stock index futures higher, banking on a rally at the open.

The rescue of U.S. army soldier Jessica Lynch from an Iraqi hospital cheered the market immensely -- not just because it was good news in itself, but because it demonstrated U.S. military strength. Further improving the mood were reports that U.S. coalition forces have begun the push through the Republican Guard defenses encircling Baghdad and were now within 30 miles of the city.

"It's getting very very bullish here," said Phil Ruffat, director of the futures division at Mizuho Securities USA. "It just goes to show you how starved people have been for news of anything positive -- everyone is thinking maybe this could turn out better than expected."

Across the world, investors were once again unwinding "war trades" -- conservative bets that offer protection against a longer war. Overseas stock markets and the dollar were higher; crude oil, Treasury bonds and gold were slipping.

The good mood on Wall Street began to build Tuesday: First, the market was able to shrug off a dismal manufacturing report from the Institute of Supply Management; second, Saddam Hussein's failure to show up at a press conference fueled speculation that he had died; and third, U.S. auto sales, though poor, were not quite so poor as the market had expected.

The Dow Jones industrial average rose 1 percent and that Nasdaq Composite tacked on 0.5 percent.

The question for traders now is whether this will be the final mood swing before the last shot gets fired. The memory of how stocks rallied in the run up to and first days of the war, only to fall when the war began to go less swimmingly than investors had first assumed, still stings.

Nor do traders have any real sense of what the war's aftermath will look like, since everything seems so dependent how the war proceeds. Will anger in the Arab world lead to fresh tensions, and threaten new conflicts? Will the economy, which appears on the brink of recession, revive as businesses and consumers heave a collective "phew" when the war ends? Since those questions all seem absolutely unanswerable, Wall Street has been reduced to trading on however the war seems to be going.

"I don't know that anyone is looking at the fundamentals," said Ruffat.