Dow Jones jumps 380 points as Iran de-escalation hopes lift stocks

• Oil prices surged above $118 per barrel for Brent crude and $103 for WTI, on track for a record monthly gain, raising inflation concerns and leading traders to price out expected Fed rate cuts for 2025
• The S&P 500 remains down nearly 8% for March, heading for its worst quarterly performance since 2022, with only the energy sector (+11%) in positive territory for the month
• Technology stocks led the recovery with the tech sector fund rising 1.4%, while markets await JOLTS data and Fed commentary after Chair Powell signaled a wait-and-see approach to assessing the conflict's economic impact

Market Summary: US Stocks Rally on Iran De-escalation Hopes

Key Market Movements:

US equities posted strong gains on Tuesday, March 31, 2026, with the Dow Jones jumping 380 points (+0.8%), while the S&P 500 and Nasdaq 100 advanced over 1%. The rally was driven by reports that President Trump may be willing to halt military operations against Iran, even if the Strait of Hormuz remains largely closed.

Geopolitical Context:

The Wall Street Journal reported Trump's potential willingness to de-escalate, providing relief after weeks of heightened Middle East tensions. However, volatility persists following reports that Iran struck a Kuwaiti oil tanker in Dubai waters. Both the S&P 500 and Dow remain on track for their steepest monthly declines since September 2022.

Energy Sector Impact:

Despite equity gains, oil prices surged dramatically. Brent crude climbed approximately 5% to above $118 per barrel, while WTI rose above $103. Oil is tracking toward a record monthly gain in March, with the S&P 500 energy sector up over 11%—the only sector posting positive monthly performance.

Monetary Policy Implications:

Sustained oil price increases have revived inflation concerns, significantly altering Fed expectations. According to CME's FedWatch Tool, traders have priced out interest rate cuts for 2026, a sharp reversal from prior expectations of two cuts. Fed Chair Jerome Powell indicated the central bank will wait to assess the conflict's full economic impact before policy adjustments.

Market Outlook:

Technology stocks led the recovery, with the Technology Select Sector SPDR Fund rising 1.4%. Investors await February JOLTS data and commentary from Fed officials Goolsbee and Bowman for further policy direction. The S&P 500 remains down nearly 8% for March, reflecting significant recent volatility.