Trump Signals Exit from Iran Conflict, Stocks Surge

Wall Street experienced its strongest session since May on Tuesday as investors reacted to growing optimism that the Iran war could move toward resolution. The S&P 500 logged its worst quarter in a year, while the Dow and Nasdaq posted their weakest quarterly performances since 2022 due to the Iran conflict, private-credit worries, and the AI 'scare trade'. The Technology Select Sector SPDR Fund (XLK) rose over 4%, Nvidia climbed 5.6%, and Microsoft gained 3.1% as technology stocks led the rebound.

The development comes after Iranian President Masoud Pezeshkian signaled openness to ending the conflict if Iran's 'legitimate rights' were recognized, reparations were paid, and firm international guarantees were provided against future attacks. U.S. President Donald Trump is reportedly willing to exit military hostilities even if the Strait of Hormuz remains largely shut.

Brent crude settled up 4.94% at $118.35 per barrel, the highest close since June 2022, after Iran reportedly struck a Kuwaiti oil tanker in Dubai waters. West Texas Intermediate crude settled down 1.46% at $101.38 per barrel.