By John Towfighi, NCS
New York (NCS) — US stocks moved sharply higher Tuesday, placing markets on observe to shut out a tough month on a excessive word: The Dow rose by 1,017 factors, or 2.25% by mid-afternoon. The S&P 500 gained 2.7% and the tech-heavy Nasdaq Composite rose 3.6%.
The rebound got here after studies and feedback from the Trump administration about doubtlessly ending the war quickly, albeit with out a decision within the Strait of Hormuz. But an unconfirmed rumor that Iran’s president could also be open to discussing an end to the war, with situations, despatched stocks even higher round noon.
Stocks moved on a report that Iranian President Masoud Pezeshkian had issued a assertion that Iran is prepared to end the war in change for safety ensures. NCS couldn’t instantly verify these studies, and though markets had been higher, the cautious move in oil costs and comparatively muted decline in Treasury yields recommend traders stay considerably skeptical about an speedy end to the war.
Wall Street entered the month of March buying and selling slightly below document highs. But the war with Iran has rocked markets, sending the Dow and Nasdaq into correction territory and placing the S&P 500 on observe for its worst quarter since 2022.
Oil costs have surged this month, elevating issues about power inflation, clouding the outlook for central banks and posing headwinds for stocks. It’s been a volatile month as merchants have navigated headlines out of the Middle East and shifting forecasts for how the Federal Reserve may reply to issues about inflation and financial progress.
Wall Street’s concern gauge, the VIX, soared this month to its highest stage since April. The VIX surpassed 30 factors, a threshold that alerts considerably heightened volatility.
Stocks rallied Tuesday on hopes for extra steerage on when the conflict might come to a close after the Wall Street Journal reported President Donald Trump mentioned ending the war. Traders have been grappling with uncertainty in regards to the length of the war.
While stocks rallied, some traders are cautious in regards to the outlook. Oil costs traded above $100 per barrel Tuesday whereas the Strait of Hormuz stays successfully shut. Brent crude, the worldwide oil benchmark, is up virtually 50% this month.
The Dow and S&P 500 are set for their worst month since September 2022. The Nasdaq is ready for its worst month in a yr.
“If the Strait of Hormuz remains closed…and thus oil prices remain extremely elevated…it’s going to be very tough for the stock market to form the bottom for this decline,” Matt Maley, chief market strategist at Miller Tabak + Co, mentioned in a word.
NCS’s Fear and Greed Index traded in “extreme fear” and hit its lowest stage since November.
Stocks had been additionally buoyed by hopes that the Fed may resume slicing rates of interest later this yr. Markets have gyrated as merchants attempt to discern the outlook for the Fed. Treasury yields fell as traders purchased bonds, reversing course after surging higher this month.
The US greenback index fell barely Tuesday. The greenback index is up 2.6% this month and on observe for its finest month since July, benefitting from secure haven demand.
“All eyes will remain on the price of oil and news out of the Middle East,” Jay Woods, chief market strategist at Freedom Capital Markets, mentioned in a word. “As tensions ebb and flow from the region, so will the direction of the markets.”
This is a creating story and might be up to date.
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NCS’s David Goldman contributed to this report.