U.S. Markets Surge on Iran War Exit Hopes, Best Day in 10 Months
U.S. equities exploded higher Tuesday with the Dow soaring over 1,100 points and the Nasdaq surging 3.6%, as reports that Trump is willing to end the military campaign against Iran—even if the Strait of Hormuz remains largely closed—sparked the biggest relief rally in nearly a year.
Primary Catalyst: Iran War Exit Signals Ignite Relief Rally
A report indicating Trump is willing to end Operation Epic Fury even without full Hormuz reopening sent markets sharply higher, with all three major indexes posting their best single-session gains in months. Trump suggested the war won't last "much longer," driving broad-based buying across growth and cyclical sectors. However, oil held above $112 per barrel and the Strait of Hormuz remained largely closed, with analysts warning the "danger zone" is $125+ oil sustained for more than a month.
Macro Context: Ugly Quarter Ends on a High Note
March was the worst month for U.S. equities since September 2022, with the S&P 500 down ~9.3% and oil surging 53% over the quarter. JOLTS data showed a "low-hire, low-fire" labor market backdrop, while consumer sentiment continued to cool. Fed officials remain in wait-and-see mode, with Powell's "look past energy prices" stance providing a policy floor.
Sector Performance (NASDAQ)
NASDAQ Sector Performance - March 31, 2026
View data table
| Label | Value |
|---|---|
| Communication Services | 3.4 |
| Technology | 3 |
| Consumer Cyclical | 2.3 |
| Industrials | 1.9 |
| Healthcare | 1.8 |
| Utilities | 1.1 |
| Financial Services | 0.6 |
| Real Estate | 0.6 |
| Basic Materials | 0.4 |
| Energy | 0.2 |
| Consumer Defensive | 0 |
Investor Takeaway
The rally's durability hinges on whether Trump's peace signals translate into a genuine cease-fire. Friday's jobs report will be critical—a weak print could revive recession fears even as geopolitical optimism builds. Oil above $112 and a still-closed Strait of Hormuz remain the key variables to watch heading into April.