In search of a win. Stocks rallied on the news Iran’s president signaled the country could be ready to end the war, though neither side has seemingly come to an agreement on terms. Meanwhile, President Donald Trump is reportedly considering ending the airstrike campaign, even if the Strait of Hormuz is not reopened.

Still, those glimmers of hope fueled a massive rally on Tuesday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all posting their best days since last May.

The Dow rose 1,125 points, or 2.5%. The S&P 500 rallied 2.9%. The Nasdaq Composite surged 3.8%.

But caution is warranted. As my colleague Connor Smith points out, the Nasdaq and Dow are still in correction territory, with the Dow notching its worst monthly performance since September 2022. The S&P and Nasdaq had their worst month since March 2025.

And while the end of the war is something to hope for, even JPMorgan Chase’s Jamie Dimon said today that the successful completion to the conflict is “much more important” than the market reaction—especially in the short term.

“We should all hope that these bad people are, you know, that we win this thing and clean up the straits and that Iran is no longer a threat to everybody,” Dimon said.

If and when a ceasefire is finalized, one of the biggest factors for investors will be how quickly oil prices will normalize. “An end to the war would bolster economic fundamentals and cyclical health; however, the damage to energy infrastructure in a region that houses a third of global crude supplies is significant,” writes José Torres, senior economist at Interactive Brokers.

Already, the oil shock is expected to boost annual inflation growth by roughly a percentage point. The Federal Reserve Bank of Cleveland estimates that the consumer price index will measure 3.3% year over year in March, up from 2.4% in February. The Bureau of Labor Statistics is set to release March inflation data on April 10.

At least one official believes that means the Fed can’t simply “look through” the inflationary impact of higher oil prices.

“This oil shock comes at a time when inflation already has been too high for too long. I don’t think we can be complacent about the risks to inflation expectations,” Kansas City Fed President Jeff Schmid said Tuesday. “With inflation already running hot, now is not the time to assume that the inflation from higher oil prices will be transitory.”

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Prices at the pump have jumped to an average of $4 per gallon. That’s expected to hit consumer spending and could weigh on U.S. economic growth if prices remain high.

Gas prices at the pump topped $4.02 a gallon for the first time since August 2022 on Tuesday, according to data from OPIS, an oil-price reporting company owned by Dow Jones, the publisher of Barron’s. The difference between $3.98 per gallon and $4.02 per gallon is minimal in practice, but the jump is a bit of a psychological barrier for consumers that could weigh on optimism and spending.

Prior to the start of the Iran war on Feb. 28, gasoline prices were solidly under $3 per gallon. That makes the March run-up the highest monthly percentage increase in prices in the past 20 years.

Economists expect the severe price jumps to eat into Americans’ purchasing power and could slow aggregate consumer spending. That’s because higher oil prices typically lead to elevated prices across other key commodities.

While consumer gas prices have been on the rise, diesel prices have been climbing faster. That actually matters more for the economy and is expected to boost inflation significantly, since diesel is heavily used in transportation, agriculture, and industrial equipment operations.

When average gas prices nationwide soared to a record cost of over $5 per gallon in June 2022, consumer spending took a hit, though not an overwhelming one. Monthly personal consumption expenditure growth during the following month was just 0.08% in July 2022, a notable deceleration from the 1.03% monthly gain in June 2022, according to data from the Bureau of Economic Analysis.

Consumer spending trends feed directly into economic growth, generating about 70% of gross domestic product growth. The recent spate of higher international oil prices are also expected to reaccelerate inflation and further weigh on consumers. If oil prices remain above $100 per barrel for a prolonged period, inflation-adjusted GDP growth could be reduced by more than 1 percentage point, EY-Parthenon chief economist Gregory Daco wrote last week.

To be sure, the amount of households’ disposable income that goes toward gasoline has fallen over the years—muting the impact of higher prices on total aggregate spending trends. The American Petroleum Institute estimates that U.S. consumers spent the equivalent of 5.7% of their disposable income on gasoline, natural gas, electricity, fuel oil, and other fuels in 2024, down from a high of 10% in 1984.

Conagra Brands and Lamb Weston Holdings announce quarterly results.

Payroll processor ADP will release the National Employment Report, which estimates payroll growth among private employers. Economists surveyed by FactSet expect companies added 38,500 jobs in March.

The Census Bureau reports retail and food service sales for February. The consensus estimate is for a 0.4% month-over-month increase, after a 0.2% decline in January. Excluding autos, retail sales are seen rising 0.3% compared with a flat reading previously.

The Institute for Supply Management releases its Manufacturing Purchasing Managers’ Index for March. The consensus call is for a 52.3 reading, roughly even with the February figure. This year, the index has registered its two highest readings since late 2022, indicating expansion in the manufacturing sector.

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