On April 3, 2026, the S&P 500 Index rose by 2.04%, the Dow Jones increased by 2.25%, and the Nasdaq 100 surged by 2.52%, marking four-week highs for all three indexes. This rally was fueled by easing geopolitical tensions following a two-week ceasefire agreement between the U.S. and Iran, which included Iran’s commitment to reopen the Strait of Hormuz. Consequently, crude oil prices plunged by over 15% to a 1.5-week low, alleviating inflation concerns and contributing to a drop in government bond yields.
The U.S. MBA mortgage applications decreased by 0.8% for the week ending April 3, with the average 30-year fixed mortgage rate falling to 6.51%. Internationally, the Euro Stoxx 50 climbed 4.94%, the Shanghai Composite gained 2.69%, and Japan’s Nikkei 225 rose by 5.39%. The current outlook for the U.S. Federal Reserve’s next meeting suggests a minimal chance of a rate hike, at just 2% for an increase of 25 basis points.
Market reactions were particularly positive in sectors like technology and airlines, with numerous stocks, including Amazon, Meta Platforms, and Carnival, seeing significant gains due to the drop in fuel costs. Conversely, energy sector stocks suffered losses, led by a notable decline for APA Corp and Occidental Petroleum due to the steep drop in crude oil prices.
