Wall Street Climbs on Middle East Conflict Speculation
On Tuesday, Wall Street experienced a significant uptick, driven by hopes of a potential easing in the ongoing Middle East tensions that have led to soaring oil prices recently and increased fears around global inflation.
All three major stock indexes reached their highest points since May, following President Trump’s indication to aides that he might be willing to stop military actions against Iran, even though the Strait of Hormuz is mostly shut off.
The Dow Jones Industrial Average surged by 1,125 points, or 2.5%, closing at 46,341.51 points. The S&P 500 jumped nearly 3%, and the Nasdaq climbed 3.8%, finishing at 21,590 points.
Just last week, both the Dow and Nasdaq were about 10% below their all-time peaks, confirming they were in correction territory. They wrapped up the month and the quarter on a downward note.
Defense Secretary Pete Hegseth stated that the upcoming days would be critical regarding the conflict with Iran and cautioned that without a resolution, tensions could escalate.
The ongoing war over the past month has led to the steepest quarterly declines for the S&P 500 and Dow since early 2022. Investors are increasingly anxious that rising fuel prices might dampen demand for products and services, prompting the Federal Reserve to consider hiking interest rates to manage inflation.
“What we’re seeing today in the capital markets is some speculation about a possible early withdrawal or a cessation of hostilities,” noted Bill Northey, a senior investment director at U.S. Bank Wealth Management in Billings, Montana.
“The specifics are a bit murky, but investors are looking for indicators that energy shipments through the Strait of Hormuz could return to normal,” he added.
The most valuable companies in the stock market saw impressive gains, with Nvidia and Alphabet both rising over 5%, Metaplatform increasing by more than 6%, and Amazon climbing by over 4%.
Coreweave surged by 10% after obtaining $8.5 billion in funding for its AI infrastructure expansion. Marvell Technology jumped 13% following Nvidia’s $2 billion investment in the company.
However, many technology stocks underperformed in 2026, as there were concerns regarding whether major players like Microsoft, Alphabet, and Amazon would deliver swift results from their substantial AI investments.
Data from the government indicated that U.S. job openings fell more than anticipated in February, hitting their lowest levels in almost six years.
Money market participants believe it’s more likely that the Federal Reserve will increase interest rates by the end of the year rather than cut them, as the surge in oil prices linked to the conflict with Iran has rekindled inflation concerns, as reflected in CME Group’s FedWatch tool.
In corporate news, Unilever has decided to divest its food division to merge with McCormick in a deal valued at approximately $44.8 billion, although McCormick’s stock dropped by 5.8%. Meanwhile, Constellation Energy fell around 8% after it missed Wall Street’s profit expectations for 2026.
