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Wednesday, April 01, 2026
What’s happening: US stocks closed sharply higher on Tuesday after President Donald Trump indicated that the war with Iran may end soon.
What happened: Trump indicated that troops would leave Iran soon, even if no deal is reached.
All major US stock indices recorded sharp gains amid reports of Iranian President Masoud Pezeshkian being open to ending the conflict.
Why it matters: The ongoing Middle East conflict entered its fifth week, lifting energy prices with Iran effectively keeping the Strait of Hormuz closed for transit.
The conflict, which has gone on for longer than widely expected, resulted in the Dow Jones and S&P 500 stock indices recording their biggest quarterly losses since 2022, amid speculations of the US Federal Reserve being forced to hike interest rates to contain higher inflation.
On Monday, the Wall Street Journal reported that Trump was ready to end the military campaign in the Middle East, even if the Strait of Hormuz remained largely closed.
US Defence Secretary Pete Hegseth said that the next few days would be decisive and warned Iran of the war intensifying in case no agreement is reached.
Data released on Tuesday showed that job openings declined by 358,000 to 6.882 million in February. The figure also came in below market estimates of 6.92 million.
The Chicago business barometer tumbled to 52.8 in March from around a four-year high of 57.7 in the previous month. This too missed market expectations of 55. The S&P Cotality Case-Shiller home price index grew by 1.2% year-over-year in January but marked an easing from the previous month’s 1.4%.
Despite the disappointing economic data from the US, investor sentiment was lifted by hopes of the Middle East conflict ending soon.
The S&P 500 surged 2.91% to close at 6,528.52 points on Tuesday, while the Dow Jones index climbed 2.49% to 46,341.51 points and the Nasdaq 100 jumped 3.43% to settle at 23,740.19.
Although these stock indices notched their strongest single-session gains since May 2025 on Tuesday, the S&P 500 has lost 4.6% year to date, while the Dow Jones index is down 3.6%.
US stocks ended March in the red. The S&P 500 recorded its worst monthly performance since 2022, while the 30-stock Dow Jones index ended a 10-month winning streak.
Nine of the 10 largest sectors recorded gains on Tuesday, with communication services and information technology stocks being among the top performers. The energy index fell more than 1% but remained higher by 10% in March, amid a sharp surge in oil prices.
Tech stocks, which have remained under pressure since the beginning of the conflict, rose on Tuesday. Shares of Nvidia, Microsoft and Alphabet settled sharply higher.
What to watch: Investors will keep an eye on the developments around the conflict in the Middle East.
Data on ADP employment change (1645 UAE Time), retail sales (1630 UAE Time) and ISM manufacturing PMI (1800 UAE Time) from the US will be released today. Private businesses in the US, which added 63,000 jobs in February, are expected to add 40,000 jobs in March. US retail sales, which declined by 0.2% in January, are expected to rise by 0.5% in February. Analysts expect the ISM manufacturing PMI to rise to 52.5 in March from 52.4 in February.
Context: The EUR/USD forex pair gained this morning as investors digested the latest inflation data.
Details: Data released on Tuesday showed that Eurozone’s annual inflation rose to 2.5% in March from 1.9% in the previous month. However, the figure was better than market estimates of 2.6%.
The latest reading signalled the highest rate since January 2025, sending inflation level above the European Central Bank’s 2% target as energy costs jumped 4.9%, representing the sharpest rise since February 2023.
Investors scaled back speculations of the ECB cutting its benchmark interest rate anytime soon. There was some speculation of the central bank hiking interest rates at least twice this year.
Weakness in the US dollar also lent support to the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% to 99.76 this morning.
The EUR/USD pair gained more than 0.1% to reach 1.1568 this morning, while the EUR/GBP forex pair edged higher to 0.8739.
What to watch: Investors await the release of data on Eurozone’s S&P Global manufacturing PMI (1200 UAE Time) and unemployment rate (1300 UAE Time) today. Analysts expect the S&P Global Eurozone manufacturing PMI to surge to 51.4 in March from 50.8 in the previous month. Eurozone’s unemployment rate, which fell to 6.1% in January from 6.2% in December, is expected to remain at 6.1% in February.
Other Markets: Asian indices traded higher this morning, with Japan’s Nikkei 225, Hong Kong’s Hang Seng index and China’s Shanghai Composite index up by 4.04%, 2.10% and 1.53%, respectively.
Ukraine’s President Volodymyr Zelensky said allies had asked him to scale back attacks on Russia’s energy facilities due to the ongoing fuel crisis. The news sent the USD/RUB pair higher in forex trading this morning.
China’s RatingDog general manufacturing PMI declined to 50.8 in March from 52.1 in the previous month. Manufacturing activity remaining in the expansion zone exerted pressure on the USD/CNY forex pair.
Australia’s building permits jumped 29.7% to around a five-year high of 19,022 units in February, following a 7.2% decline in January, which sent the AUD/USD pair higher in forex trading this morning.
Malaysia’s S&P Global manufacturing PMI climbed to 50.7 in March from 49.3 in the previous month. Manufacturing activity surging to the highest level since April 2022 exerted pressure on the USD/MYR forex pair.
Indonesia’s S&P Global manufacturing PMI fell to 50.1 in March from 53.8 in February. This indicating near-stagnant conditions lent support to the USD/IDR pair in forex trading this morning.
Italy’s unemployment rate (1200 UAE Time), UK’s S&P Global manufacturing PMI (1230 UAE Time) and BoE FPC meeting minutes (1330 UAE Time), South Africa’s ABSA manufacturing PMI (1300 UAE Time), US MBA mortgage applications (1500 UAE Time), S&P Global manufacturing PMI (1745 UAE Time), business inventories (1800 UAE Time) and EIA crude oil stocks change (1830 UAE Time), Mexico’s business confidence (1600 UAE Time) and S&P Global manufacturing PMI (1900 UAE Time), Brazil’s S&P Global manufacturing PMI (1700 UAE Time), Canada’s S&P Global manufacturing PMI (1730 UAE Time) as well as Russia’s unemployment rate (2000 UAE Time), business confidence (2000 UAE Time), corporate profits (2000 UAE Time), real wage growth (2000 UAE Time) and retail sales (2000 UAE Time).
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