US stocks soar as traders bet on potential war off-ramp

NEW YORK - Wall Street ended sharply higher on March 31, lifted by speculation about a potential de-escalation in the Middle East conflict that has sent oil prices soaring and fuelled fears of global inflation in recent weeks.

All three major US indexes rallied after the Wall Street Journal reported on March 30 that US President Donald Trump told aides he was willing to end the military campaign against Iran, even if the Strait of Hormuz remained largely closed.

US Defense Secretary Pete Hegseth said the next few days in the Iran war would be decisive and warned Tehran that the conflict would intensify if it did not make a deal.

The month-long conflict has left the S&P 500 and the Dow with their deepest quarterly declines since 2022 as investors worry that a wave of higher fuel costs could hurt demand for goods and services, while forcing the US Federal Reserve to raise interest rates to contain inflation.

“What you’re seeing in capital markets today is speculation around an earlier off-ramp, or a cessation of hostilities,” said Mr Bill Northey, senior investment director at US Bank Wealth Management, in Billings, Montana.

“Details are light, but the capital markets are looking for any indication that there is an opportunity for a more normal flow of energy through the Strait of Hormuz.”

The US stock market’s most valuable companies made big gains, with Nvidia up 5.6 per cent, Alphabet adding 5.1 per cent and Meta Platforms jumping 6.7 per cent.

The PHLX chip index jumped 6.24 per cent in its strongest session in nearly a year.

The S&P 500, Nasdaq and Dow Jones Industrial Average recorded their biggest one-day gains since May 2025, when investors reacted to a truce in the trade war between Washington and Beijing.

The S&P 500 jumped 2.91 per cent to end March 31’s session at 6,528.52 points.

The Nasdaq rallied 3.83 per cent to 21,590.63 points.

The Dow Jones Industrial Average rose 2.49 per cent to 46,341.51 points.

Volume on US exchanges was heavy, with 22.4 billion shares traded, compared with an average of 20.3 billion shares over the previous 20 sessions.

Nine of the 11 S&P 500 sector indexes rose, led by communication services, up 4.42 per cent, followed by a 4.24 per cent gain in information technology.

The energy index dropped 1.2 per cent and remained up 10 per cent in March, tracking the rally in oil prices.

With the first quarter complete, the S&P 500 is down 4.6 per cent year-to-date, while the Nasdaq has lost 7.1 per cent and the Dow has fallen 3.6 per cent. CoreWeave rallied 12 per cent after securing an US$8.5 billion (S$11 billion) loan to expand AI infrastructure. Marvell Technology also surged 12 per cent after Nvidia invested US$2 billion in the firm.

Many technology stocks have taken a beating in 2026 due to worries that Microsoft, Alphabet, Amazon and other heavyweights may be taking too long to show results from their massive spending in AI.

Last week, the Dow and the Nasdaq ended 10 per cent below their record-high closes, confirming they were both in corrections. US job openings fell more than expected in February and hiring dropped to the lowest level in nearly six years, government data showed.

The oil spike stemming from the Iran war has revived inflation worries, and money market traders think the Fed is more likely to raise interest rates by year-end than lower them, according to CME Group’s FedWatch Tool.

Unilever agreed to separate its food unit and merge it with McCormick in a cash-and-stock deal, valuing the spice maker at about US$44.8 billion. McCormick shares fell 6.1 per cent. Constellation Energy dropped 6.5 per cent after forecasting 2026 profit below Wall Street expectations.

Advancing issues outnumbered falling ones within the S&P 500 by a 5.2-to-one ratio.

The S&P 500 posted 6 new highs and 8 new lows; the Nasdaq recorded 37 new highs and 154 new lows. REUTERS