Market Summary: What Happened Yesterday and What Awaits Us Today 1/4

A strong rebound in US stocks amid signs of a cooling-off period… but first-quarter losses impose a harsh reality

US equity markets staged a strong rebound on Tuesday, as renewed optimism around a potential de-escalation in the Iran conflict lifted risk appetite after weeks of volatility. The Nasdaq Composite led the rally, surging 3.8%, while the S&P 500 climbed 2.9% and the Dow Jones Industrial Average gained 2.5%, adding more than 1,100 points.

The recovery was driven largely by reports suggesting that US President Donald Trump is open to ending the war with Iran, even without a full reopening of the Strait of Hormuz. Markets interpreted this as a meaningful step toward de-escalation, particularly after comments indicating that US forces could withdraw within weeks.

Technology stocks led the advance, with gains across the so-called “Magnificent Seven” cohort. Meta Platforms rose 6.7%, while Nvidia jumped 5.6% following news of a strategic partnership with Marvell Technology, whose shares surged 13% on the back of a $2 billion investment.

Despite the strong session, the broader context remains fragile.

All three major indices recorded their worst quarterly performance in nearly four years, reflecting sustained pressure from geopolitical tensions and rising energy costs. The Nasdaq fell 7.1% over the quarter, while the S&P 500 declined 4.6% and the Dow dropped 3.6%.

In energy markets, oil prices eased slightly but remained elevated, with Brent crude near $104 per barrel and US crude around $102 per barrel. Persistently high fuel costs continue to feed into inflation, with US gasoline prices averaging $4 per gallon, maintaining pressure on consumers and policymakers alike.

Bond markets reflected a modest shift in sentiment, with the 10-year US Treasury yield falling below 4.30% after recent highs, suggesting some renewed demand for fixed income. Meanwhile, gold rose 3.4% to around $4,710 per ounce, partially recovering from recent losses, while the US dollar index slipped to 99.90, supporting gains in alternative assets such as Bitcoin, which climbed to approximately $67,700.

Outside the US, markets painted a more cautious picture. European equities edged lower, with the Stoxx 600 under pressure, while Asian markets were mixed, reflecting ongoing uncertainty around geopolitical developments and their economic implications.

Market outlook

Markets remain highly sensitive to headlines surrounding the Iran conflict, with any credible signs of de-escalation likely to extend the current recovery, particularly in growth sectors such as technology. However, elevated oil prices and persistent inflation risks continue to pose a significant headwind.

Investors will closely monitor bond yields and the US dollar, as further declines could support equities in the near term. Absent a sustained geopolitical resolution, markets are likely to remain volatile, with sharp swings in sentiment driving short-term price action.