On Tuesday, the S&P 500 surged 2.9%, the Dow climbed 2.5%, and the Nasdaq jumped 3.8% as optimism grew around a possible end to the conflict with Iran. The rally was sparked by comments from Iranian President Masoud Pezeshkian signaling willingness to end the war, while President Trump hinted at resolving the conflict without controlling the Strait of Hormuz. Today, watch the ISM Manufacturing Index for March (expected at 52.3) and weekly crude oil inventory data — both could shift sentiment on inflation and growth.

Markets had their best day in weeks after diplomatic signals from Iran raised hopes that the war could wind down. But the reality on the ground hasn’t changed — attacks continue, the Strait of Hormuz remains under pressure, and oil is still above $100 per barrel. The U.S. Treasury expects oil to stay elevated, and the IEA warned that April’s oil supply loss could be double March’s — worse than the 1970s oil crises and 2022’s Russian gas disruption combined.

Bank of America slashed its 2026 U.S. growth forecast to 2.3%, blaming roughly 75% of the cut on the war. They also raised their inflation forecast, expecting core PCE to hit 3.1% by year-end. For your portfolio, the tug-of-war between war-driven uncertainty and sticky inflation could keep markets volatile for weeks — energy stocks benefit, but tech and growth stocks remain under pressure.

A type of professional fund that uses automated strategies to trade based on market trends and momentum, often amplifying big moves up or down. Why you care today: Much of yesterday’s rally was driven by CTAs and hedge funds closing short positions — not long-term investors buying in — which means the move could reverse quickly if headlines turn negative.