U.S. stocks surge violently! The Dow jumps over 1,100 points, the Nasdaq soars nearly 4%, tech giants celebrate collectively, and signals of a ceasefire between the U.S. and Iran ignite market sentiment.

Ask AI · How Can Truce Signals Between the U.S. and Iran Ease a Month-Long Market Anxiety?

On Tuesday, March 31 (U.S. Eastern Time), all three major U.S. stock indexes surged sharply. The Dow Jones Industrial Average surged by 1,125 points, the biggest single-day gain since May last year, while the Nasdaq Composite jumped nearly 4%. Behind this robust rebound is the hope that the geopolitical fog has temporarily lifted—both the United States and Iran released signals of conflict de-escalation, finally allowing a market that had been enduring a month of suffering to exhale.

A Historic Epic Rally in U.S. Stocks—Tech Titans Celebrate Together

By the close, the Dow rose 2.49% to 46,341.33 points, the S&P 500 gained 2.91% to 6,528.52, and the Nasdaq rose 3.83% to 21,590.63. All three indexes logged their best single-day performance since May 2025. The market showed a broad-based rally: among the S&P 500’s 11 sectors, Telecommunication Services and Information Technology led, followed by Consumer Discretionary, with gains all exceeding 3%; only the Energy sector bucked the trend and fell 1.12% due to a pullback in oil prices.

Large-cap technology stocks became the main force behind the rebound. The Nasdaq U.S. Technology Seven Giants index overall rose 4.4%; among them, Meta jumped more than 6.6%, and both Nvidia and Google gained more than 5%, while Tesla rose 4.6%.

Chip stocks also surged across the board. The Philadelphia Semiconductor Index rose more than 6%. Micron Technology surged nearly 13% after receiving a $2 billion investment from Nvidia and establishing a strategic partnership. ARM rose more than 10%, and TSMC rose more than 6.7%.

Chinese concept stocks also performed strongly. The Nasdaq China Golden Dragon Index rose 2.8%. NIO rose more than 9%, iQIYI gained more than 6%, Baidu and Bilibili rose more than 4%, and Alibaba, JD.com, and XPeng Motors all rose more than 2%. This rally continued the relatively strong performance of Chinese concept stocks in recent times.

However, this surge looks more like a “breather” after a brutal month-long selloff. Looking back across March as a whole, the S&P 500 fell 5.1% cumulatively, marking its worst monthly performance since 2022; the Dow and Nasdaq fell 5.4% and 4.8%, respectively. From Q1 alone, the Nasdaq led the declines, down more than 7%, while the S&P 500 and Dow fell 4.6% and 3.6%, respectively. “Investors may be looking for a recent bottom, after all, this is one of the S&P 500’s most gloomy months since 2022,” said Robeau Harworth, senior strategy director at U.S. bank Union Bank Asset Management.

Truce Signals Ignite Market Sentiment

The key factor driving this violent rebound came from clear signs that the situation in the Middle East is cooling. According to reports from Xinhua News Agency and CCTV News, Iranian President Pezeshkian said on March 31 that Iran has a “necessary willingness” to end the war, but only on the condition that the other side meets Iran’s demands—especially by making necessary assurances that they will not invade again. Almost at the same time, U.S. President Donald Trump said from the White House that the U.S. would end its hostilities with Iran within “two to three weeks,” adding that it might reach an agreement with Iran before then.

Earlier, according to media reports, Trump had told aides that even if the Strait of Hormuz remains broadly closed, he is still willing to end military action against Iran. U.S. government officials assessed that forcibly reopening the waterway would push the military operation beyond the original 4-to-6-week timeframe, so they decided to gradually end military action after achieving major goals such as weakening Iran’s navy and its missile capabilities.

These remarks immediately triggered a sharp reaction in capital markets. U.S. stocks and precious metals surged straight up, while oil futures—previously soaring due to the escalation of conflict—dropped sharply in the short term. Bill Northey, senior investment manager at Bank of America Wealth Management, commented: “Today, the capital markets are reflecting expectations that the conflict will end sooner or that there will be a ceasefire. Although the details are still unclear, the capital markets are looking for any sign that energy transport through the Strait of Hormuz could return to normal.”

“Any step toward ending the war is welcomed by the stock market, so what you’re seeing is this kind of de-escalation-driven rebound,” said Eric Diton, president of The Wealth Alliance. “But we haven’t gotten out of harm’s way. Ultimately, if we don’t solve the oil supply problem, it will continue to create pressure.”

Cool Thinking in the Heat: Oil Prices and Inflation Remain Hidden Worries

Although market sentiment has soared on expectations of a ceasefire, analysts generally warn that there is still substantial uncertainty about how events will unfold. Fawad Razaqzada, a financial market analyst at Forex.com, said that although Trump intends to end hostile actions, the key question—when the Strait of Hormuz will reopen—remains unresolved, which is what the market is focusing on most. “It’s hard to imagine Iran stepping back on its own without getting any concessions.”

At the same time, oil prices are showing divergence in their moves. Brent crude oil futures closed up 4.94% on March 31, at $118.35 per barrel, setting the highest closing price since June 2022. March alone saw a 63% surge, the biggest monthly gain since 1988. Meanwhile, WTI crude oil futures closed down 1.46%, at $101.38 per barrel. This divergence itself reflects the market’s complex assessment of the outlook.

Even more noteworthy is inflation pressure. Jeff Schmid, president of the Federal Reserve Bank of Kansas City, warned that due to the energy-price increases triggered by the conflict between the U.S. and Iran, U.S. inflation may remain at a higher level for longer, approaching 3%. He pointed out that this oil-price rise occurred in a backdrop where inflation is “already too high and has been too persistent,” and the Fed should not simply assume that inflation driven by higher energy prices is temporary.

At present, fed funds interest rate futures show that traders assign a 75% probability that interest rates will be kept unchanged within the year. Meanwhile, the yield on 10-year U.S. Treasuries fell from 4.35% on Monday to 4.31%, down notably from 4.44% at the end of last week—showing that bond markets have eased concerns about inflation pressure, though yields are still at a relatively high level.

From a more macro perspective, the market turbulence sparked by geopolitical conflict again highlights how sensitive global financial markets are to geopolitical risks. On the one hand, news of de-escalation can instantly ignite risk assets; on the other hand, any back-and-forth in the situation could quickly reverse market sentiment. Until shipping through the Strait of Hormuz truly returns to normal, the market’s “de-escalation-driven rebound” may still be accompanied by caution and volatility.