By Jamie McGeever
ORLANDO, Florida, March 31 (Reuters) – Wall Street closed a tumultuous first quarter with a bang on Tuesday as hopes of de-escalation in the Middle East powered stocks to their best day in almost a year, even as data showed a slump in U.S. job openings and hirings.
In my column today I look at the parallels between now and 2021-2022, the last time central banks faced a serious global supply shock. They acted in unison to tackle inflation then, if a little belatedly. There’s unlikely to be as much cohesion this time around.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
Today’s Key Market Moves
Today’s Talking Points
* Coiled spring or dangerously complacent?
Tuesday’s surge on Wall Street was extraordinary, and not just because the big three indices had their best day since May last year. Remarkably, the moves on the S&P 500 and Dow were the biggest since the Iran war started, meaning they clocked a 2% up day before a 2% down day.
This can be looked at in a few ways. It shows how keen investors are for the war to end so they can load up on risky assets. Or it shows they underestimate the damage already done, lingering risks even if hostilities cease tomorrow, and the potential for prolonged conflict. Or, it was just quarter-end position squaring.
* A quarter for the ages
The first quarter of 2026 closed on Tuesday, and what a three months it has been. Brent crude had its biggest rise since the first Gulf War; European LNG rose 80%; the “Mag 7” megacaps slumped 13%; March was the worst month for world stocks since September 2022, with $8 trillion market cap lost.
The volatility sparked by the Middle East conflict is summed up perfectly by South Korea’s KOSPI index. It ended the quarter up 20% but also in a bear market, as its close on Tuesday was down 20% from February 27 peak, the day before the U.S. and Israel attacked Iran. Buckle up for Q2!
* U.S. gasoline crosses “psychological” $4
Traders often cite “psychological” price levels in markets as magnets for activity – round numbers, big numbers, new highs or lows. On Main Street, the break of big price levels can have political reverberations, which is happening with U.S. gas prices right now.
The average price of gasoline is now above $4 per gallon for the first time since 2022, up 35% since the Iran war started. This is potentially damaging for President Donald Trump, whose approval rating is tanking. There’s a long way until the midterms in November, but high and rising gas prices aren’t a vote winner.
What could move markets tomorrow?
Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(Reporting by Jamie McGeever; Editing by Nia Williams)
Comments