Wall Street ended sharply higher on Tuesday on speculation of a potential de-escalation in the Middle East conflict, which boosted oil prices in recent weeks and fueled fears of global inflation. All three major U.S. indexes rose Monday after the Wall Street Journal reported that U.S. President Donald Trump told aides he was ready to end the military campaign against Iran, even if the Strait of Hormuz remains largely closed. US Defense Secretary Pete Hegseth said the next few days in the Iran war would be critical and warned Tehran that the conflict would intensify if it did not make a deal.

The Dow Jones Industrial Average rose 1,125.07 points, or 2.49%, to 46,341.21. The S&P 500 rose 185.27 points, or 2.92%, to 6,528.99, while the Nasdaq Composite rose 795.99 points, or 3.83%, to 21,590.63.

The months-long battle left the S&P 500 and the Dow on track for their deepest quarterly declines since 2022 as investors worried that higher fuel costs could hurt demand for goods and services, while the US Federal Reserve was forced to raise interest rates to curb inflation.

“What you’re seeing in the capital markets today is speculation of an earlier off-ramp or an end to hostilities,” said Bill Northey, senior investment director at US Bank Wealth Management in Billings, Montana.

“The details are sketchy, but capital markets are looking for any sign that there is an opportunity for a more normal flow of energy through the Strait of Hormuz.”

Nvidia, Alphabet, Meta Platforms and Amazon are among the most valuable companies on the US stock market with big gains.

The PHLX chip index also rose. Corewave rallied after securing an $8.5 billion loan to expand AI infrastructure. Marvel Technologies grew after Nvidia invested $2 billion in the firm.

Many technology stocks have taken a beating in 2026 on concerns that Microsoft, Alphabet, Amazon and other heavyweights may take too long to show results from their massive spending in AI.

Last week, the Dow and ⁠Nasdaq ended 10% below their record-high closes, confirming that they were both in corrections. US job openings fell more than expected in February and hiring fell to the lowest level in nearly six years, government data showed.

An oil spike stemming from the Iran war has revived inflation concerns and money market traders believe the Fed is more likely to cut interest rates by year-end, according to CME Group’s FedWatch tool. Unilever agreed to spin off its food unit and merge it with McCormick in a cash-and-stock deal, valuing the spice maker at about $44.8 billion. McCormick’s shares fell. Star Energy fell after forecasting 2026 profits that beat Wall Street expectations.