U.S. Stocks Surge on Iran War De-escalation Hopes

U.S. stock markets rallied sharply on Tuesday as investors responded to encouraging signals that the ongoing U.S.-Iran military conflict could be nearing its end. Reports emerged that President Donald Trump was open to concluding the military campaign even without fully reopening the Strait of Hormuz, a critical global oil shipping lane that has been effectively blocked for weeks. Adding to the optimism, Iranian President Masoud Pezeshkian signaled through state television that Iran was willing to end hostilities if given security guarantees against future attacks.

The S&P 500 climbed 2.9% to close at 6,528.99, the Nasdaq Composite surged 3.8% to finish at 21,590.63, and the Dow Jones Industrial Average rose 2.5% to settle at 46,341.21. The Nasdaq officially exited correction territory with the session's gains, following the Dow a day earlier. Despite the rebound, all three major indexes still posted significant losses for March, with the S&P 500 and Nasdaq each falling roughly 5%, marking their worst monthly performances since March 2025.

Oil prices dropped sharply on the diplomatic developments, with Brent crude falling 3.4% to around $103.78 per barrel. Lower oil prices provided additional relief to equity markets, which have been under sustained pressure from energy-driven inflation fears. U.S. gasoline prices recently topped $4 per gallon for the first time since 2022, squeezing American consumers and stoking broader inflation concerns.

On the economic data front, consumer confidence came in slightly above expectations in March, though inflation expectations among respondents jumped to their highest levels in months. Job openings data for February showed a modest decline, with the hires rate hitting its lowest point since April 2020. Investors also tracked corporate news, including a major merger between McCormick and Unilever's food division, and a significant AI partnership between Marvell Technology and Nvidia that sent Marvell shares up nearly 13%.