Revived New York Stock Market Amid Easing Iran War Tensions: Is This a True Rebound Signal?

On the 31st (local time), Wall Street rallied sharply on hopes of de-escalation in the Iran conflict. The Dow Jones Industrial Average climbed 2.5% to 46,341.51, the S&P 500 rose 2.9% to 6,528.52, and the Nasdaq jumped 3.8%, marking its largest one-day gain since May of last year. Although the S&P 500—already down more than 9% from its record high amid war and oil-price concerns—recovered much of those losses in a single session, first-quarter returns still rank as the worst since 2022, leading some market watchers to attribute the move to short covering and quarter-end position adjustments.

Reports that President Trump could end the conflict with Iran without reopening the Strait of Hormuz eased fears of a protracted war. Oil prices, which had surged nearly 60% over the past month, pulled back about 1% to roughly $101–102 a barrel, bolstering hopes of reduced inflationary pressure. Large-cap tech shares, including those in AI and semiconductors, and cyclical sectors such as airlines and cruise lines all rallied in tandem, while energy stocks—long beneficiaries of elevated oil prices—lagged behind.

The Federal Reserve reaffirmed its stance of “holding rates steady for now, with potential cuts if the economy slows” in minutes released after its March FOMC meeting and in Chairman Powell’s comments. Treasury yields fell across the board, creating a supportive backdrop for growth stocks. With February’s drop in job openings and a simultaneous improvement in consumer sentiment, the prevailing view was that “economic growth is cooling gradually but is not tipping into recession.” Corporate news included standalone developments—such as McCormick’s announcement to acquire Unilever’s food division—but overall market direction was driven by three key factors: the trajectory of the Iran conflict, oil prices, and the Fed’s policy stance.