NEW YORK, March 31, 2026, 16:20 EDT
Wall Street ended sharply higher on Tuesday as investors seized on signs that Washington may accept a messy endgame in the Iran conflict rather than wait for the Strait of Hormuz to reopen. The S&P 500 rose 2.91% to 6,528.81, the Nasdaq gained 3.84% to 21,592.47 and the Dow added 2.47%, or about 1,125 points, to 46,334.83. 1
The rebound mattered because it followed a punishing March selloff driven by oil, bond yields and renewed inflation fears. Only days earlier, the Dow and Nasdaq had slipped into correction territory — down more than 10% from recent highs — while the S&P 500 was staring at its worst quarter since 2022. 2
The immediate trigger was a Wall Street Journal report that President Donald Trump had told aides he was willing to end the military campaign even if Hormuz stayed largely shut. Unconfirmed reports that Iranian President Masoud Pezeshkian was open to ending the war under certain conditions added to the relief, though Trump later rebuked Britain and France for not joining the campaign and told them to show “delayed courage” in securing their own oil. 3
That matters because Hormuz is not a side story. The narrow shipping lane carries roughly one-fifth of the world’s oil and gas, and crude swung violently on Tuesday after Iran hit and set ablaze a tanker off Dubai: Brent briefly rose above $118 a barrel before the next-month contract slid back toward $104-$105, easing some pressure on stocks, even as U.S. gasoline topped $4 a gallon. 3
“What you’re seeing … is speculation around an earlier off-ramp,” Bill Northey, senior investment director at U.S. Bank Wealth Management, said. Colin Graham, head of multi-asset strategies at Robeco, said markets were taking Washington “at their word,” but had not yet grappled with the possibility that the shooting could ease while the strait remains closed. 1
The snapback was led by technology and other growth shares. Communication services and information technology topped the S&P 500 sector gainers, Marvell Technology surged after Nvidia invested $2 billion in the chipmaker, and CoreWeave climbed after securing an $8.5 billion loan, while airlines and cruise operators rose as oil cooled. 1
The relief spread into Asia-Pacific. Australian shares were set to open sharply higher on Wednesday, with ASX 200 futures up 108 points, or 1.3%, near 4:45 a.m. AEDT after Wall Street’s rebound and the retreat in oil. 4
Still, the downside case has not gone away. Trump has swung between talking up a deal and threatening to “obliterate” Iran’s energy plants, the Dubai tanker strike showed shipping remains exposed, and Saxo Bank’s Ole Hansen warned that unless Hormuz reopens soon prices could push into “demand destruction territory”; Stratas Advisors’ John Paisie said Brent could move toward $190 if the waterway stays shut for another month. 3
Next up is the labor market. Government data showed job openings and hiring weakened in February, and IG analyst Tony Sycamore said Friday’s non-farm payrolls report would be watched closely after February payrolls unexpectedly shrank by 92,000, with interest-rate markets pricing roughly a 25% chance of a Fed hike by year-end. 1
