Wall Street is betting on the end of the war with Iran. The S&P500 is rebounding from a 7-month low

Speculations related to the end of the war with Iran and the unblocking of the Strait of Hormuz have finally generated a solid rebound on the New York stock markets. The S&P500 index had its best session since May, rebounding with momentum from its 7-month low.

The S&P500 gained 2.91% on Tuesday and ended the day at 6,528.52 points. Thus, a rebound finally appeared after three declining sessions in a row and at the lowest levels since August last year. It was also the strongest daily increase in this index since May '25.

The Nasdaq Composite reacted even more strongly, rising by 3.83%, reaching 21,590.63 points. The Dow Jones industrial average increased by 2.49% and finished at 46,341.51 points. The VIX volatility index fell by 17.5%, and Brent crude oil, which was initially rising in price, fell by almost 3%.

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The fuel for growth was provided by hopes for de-escalation or perhaps even an end to the war with Iran. President Donald Trump suggested on social media his readiness to end hostilities with Iran without a hard condition to open the Strait of Hormuz. In turn, Defense Secretary Pete Hegseth said that the “next few days” will be crucial, which may mean the imminent prospect of ending the conflict in the Persian Gulf.

However, such a euphoric market reaction to the virtually lack of new information may prove disastrous. These types of corrections “should” end in an atmosphere of serious doubt or even mild panic. It must be admitted, however, that the popular American Fear and Greed Index has been indicating “extreme fear” for several days now, with almost extremely low values.

– Today, we see speculation on the capital markets about an earlier end or suspension of the conflict. Details are thin, but markets are looking for any indication that there is a chance for a more normal energy flow through the Strait of Hormuz – this is how Bill Northey from US Bank Wealth Management commented on Tuesday's session for Reuters.

US Treasury bonds also strengthened for the second day in a row. The yield on 10-year securities decreased only by a modest 3 basis points. to 4.32%, but by Friday's peak we already have a drop of almost 20 bp. The yield on 2-year bonds dropped to less than 3.80%, although it was above 4% last week.

In the first quarter ended today, the S&P500 lost 4.6%, and the Nasdaq lost almost 7.2%. The biggest losers were technology companies, whose sector sub-index lost 13%. Telecommunications companies and real estate companies paid slightly less. Of course, the biggest winners were shares of oil companies – this market sector gained 39% in three months.

On the macroeconomic side, data from the American labor market were slightly disappointing. Number of unfilled vacancies by JOLTS survey in February was 6.88 million, compared to 7.24 million in January. The market consensus assumed 6.92 million vacancies. However, the Conference Board's March reading of consumer sentiment performed very well, unexpectedly rising from 91.0 points. up to 91.8 points Economists, seeing skyrocketing fuel prices, predicted that this indicator would drop to an average of 88 points. The industrial situation in the Chicago region has significantly weakened. The local PMI in March recorded a decline from 57.7 points. up to 52.8 points (expected 55 points).

K.K

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