Stocks Surge on Peace Hopes but Face Worst Quarter Since 2022

Major U.S. stock indexes surged Tuesday as investors seized on reports that President Donald Trump was willing to end the U.S.-Iran war without waiting for the Strait of Hormuz to fully reopen, producing one of the sharpest single-day rallies in months even as all three benchmarks remained on track to close the quarter with their worst performance since 2022.

The Dow Jones Industrial Average climbed 828 points, or 1.8%, and briefly surged above 1,100 points intraday after an unconfirmed report circulated that Iranian President Masoud Pezeshkian was open to ending the war. The S&P 500 gained 2.3% and the Nasdaq Composite advanced 3.2%.

The Wall Street Journal reported that Trump had told aides he was willing to end military hostilities in the Middle East even if the Strait of Hormuz remained largely shut. The New York Post separately reported that Trump said he believes the Iran war will likely end soon, with other nations taking the lead in reopening the Strait. Yahoo Finance reported Trump indicated the conflict would not last "much longer."

Despite Tuesday's gains, the quarter's damage was severe. The Nasdaq led all three major indexes lower for the period, falling almost 9%. The S&P 500 dropped nearly 6% and the Dow fell almost 5%, with all three on pace for their worst quarterly performance in nearly four years. March alone proved brutal: the S&P 500 fell more than 6% for the month, which would rank as its worst monthly showing since September 2022, when the index plunged 9.3%. The Dow and the Nasdaq both also fell more than 6% in March, leaving the Dow set to snap a 10-month winning streak.

Technology stocks, which had been under sustained pressure since the conflict began, recovered broadly. The Technology Select Sector SPDR Fund rose almost 2%, while Nvidia climbed more than 3% and Microsoft advanced more than 1%.

Commodities reflected the ongoing strain. Gasoline topped $4 a gallon, according to the Wall Street Journal, while oil was on track for a record monthly gain, Reuters reported.

Eric Diton, president at The Wealth Alliance, framed the session in terms Wall Street had been anticipating for weeks. "Any steps toward ending the war overall, the stock market likes, and so, you are getting that relief rally," he said. "But no, we're not out of the woods."

With the conflict entering its second month, commodities still elevated, and the Dow's intraday spike above 1,100 points tied to a report that remained unverified by market close, Tuesday's rally offered a measure of optimism without resolving the pressures that defined the worst quarter for U.S. stocks in three-and-a-half years.