Traders piled into US stocks on Tuesday afternoon as Iran's president said he's ready to end the war with the US, according to state media — just hours after a Wall Street Journal report said President Donald Trump wanted to end America's military campaign.
The S&P 500 Index rallied 2.9% in New York, while the technology-heavy Nasdaq 100 Index jumped 3.4%, with both benchmarks notching their best days since May, when the White House reversed many of its global tariffs. Speculative corners of the market posted solid gains: Goldman Sachs Group Inc.'s most-shorted basket of stocks surged 7.1%, while the small-cap Russell 2000 Index climbed 3.4%.
“It was a definitely a coiled spring,” said Joe Gilbert, portfolio manager at Integrity Asset Management. “All an oversold market needs is just a glimmer, and that's kind of what we got.”
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Iran has “the necessary will to end this war” but expects certain requirements to be met, Iranian President Masoud Pezeshkian told European Union Council President António Costa in a call Tuesday.
President Trump called on other nations to take control of the Strait of Hormuz, expressing his frustration that the month long war is unresolved and the latest sign he is looking to exit the conflict as oil and gas prices surge.
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Energy stocks gave up gains after the Iranian president's reported comments, with Exxon Mobil Corp. falling 1.1% and Chevron Corp. sliding 1.8%. Shares of fuel-hungry airlines rallied. West Texas Intermediate dropped in the afternoon. Earlier, US gasoline topped $4 a gallon for the first time since 2022.
Energy goods and services accounted for just 3.7% of consumer spending in January compared to 5.6% before Iraq invaded Kuwait in 1990, according to data from Bank of America Corp., providing some solace that the economy “has become much more energy-efficient over time, making it more resilient to energy shocks,” BofA economist Aditya Bhave wrote in a client note.
Earlier in the day, data showed an unexpected rise in consumer confidence in March, with the Conference Board's gauge increasing and eclipsing economist estimates.
In individual movers, shares of Nvidia Corp. rose 5.6% after announcing a $2 billion investment in Marvell Technology Inc. as part of an agreement to collaborate on silicon photonics technology. Shares of McCormick & Co. dropped 6.1% after Unilever Plc agreed to combine its food business with the spice maker in a $44.8 billion deal.
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