Trump's withdrawal of troops signals optimism! The three major US stock indexes recorded their largest single-day increase in nearly a year, with Wall Street betting on an early end to the Middle East conflict.

Driven by the latest expectations of the market for a possible easing of tensions in the Middle East, the three major US stock indexes surged on Tuesday, achieving the largest single-day increase in nearly a year. US President Trump stated that the US will end its military actions against Iran in the next two to three weeks, even if no agreement is reached with Iran, and will initiate a withdrawal, greatly alleviating market concerns about soaring oil prices, inflation rebound, and tightening monetary policy by the Fed. At the close, the Dow Jones Industrial Average rose 2.49% to 46341.51 points; the S&P 500 index surged 2.91% to 6528.52 points; and the Nasdaq Composite Index soared 3.83% to 21590.63 points. All three major indexes recorded their largest single-day gains since May 2025. The direct trigger for the market sentiment reversal came from the political level. According to reports, Trump has told his aides that he is willing to end military action against Iran even if the Strait of Hormuz remains largely closed. Trump further clarified the withdrawal timetable to reporters at the White House on Tuesday: "I can say within two weeks, maybe two weeks, maybe three weeks. We will be leaving because there is no reason to continue this." Trump added that the core military goal of preventing Iran from obtaining nuclear weapons has been achieved, and even without a formal agreement with Iran, it does not affect the US military's decision to end military action. He also claimed that the current state of the Iranian regime is better than before the conflict. This statement has led the market to believe that there may be an early turning point or "halt to hostile actions" in this month-long conflict. Previously, the escalation of tensions in Iran had led to a spike in oil prices and reignited global inflation concerns. Bill Northey, Senior Investment Director at U.S. Bank Wealth Management, said, "What the capital markets are reflecting today is the expectation of an early turning point in the situation or a halt to conflict, although specific details are still unclear, the market is looking for any signals that energy transportation through the Strait of Hormuz will return to normal." In terms of sector performance, the technology sector led the market higher. The S&P 500 index's communication services sector rose 4.42%, and the information technology sector rose 4.24%. Large tech companies saw significant gains, with NVIDIA Corporation (NVDA.US) surging 5.6%, Alphabet Inc. Class C (GOOGL.US) rising 5.1%, and Meta Platforms (META.US) jumping 6.7%. The Philadelphia Semiconductor Index rose 6.24%, marking its strongest single-day performance in nearly a year. Despite the market's optimism due to the ceasefire expectations, the energy sector bucked the trend with a 1.2% decline. Prior to this, the sector had a cumulative increase of 10% in March due to the ongoing conflict. In terms of oil prices, after Trump's latest remarks, crude oil futures contracts weakened. However, behind the optimism, there are still multiple uncertainties. The month-long conflict has clearly weighed on the quarterly performance of US stocks. At the end of the first quarter, the S&P 500 index and the Dow fell by 4.6% and 3.6%, respectively, while the Nasdaq fell by 7.1%, marking their worst quarterly performances since 2022. Investors had been worried that rising fuel costs would dampen demand for goods and services, forcing the Fed to raise interest rates to curb inflation. According to the FedWatch tool from the Chicago Mercantile Exchange, currency market traders currently believe that the likelihood of the Fed raising interest rates by the end of the year is still higher than cutting rates. This is a significant contrast to the market's expectations of multiple rate cuts for the whole year at the beginning of the year. The market is concerned that rising fuel costs will suppress demand for goods and services, further impacting the US economy and corporate profits. Additionally, the latest US economic data shows that job vacancy reductions in February exceeded expectations, recruitment has dropped to a nearly six-year low, and underlying concerns about the US economy remain unresolved. Although Trump has provided a clear withdrawal timetable, there are still uncertainties in its implementation. Reports indicate that Trump has a tendency to use "two weeks" as a potential time frame for major decisions, and often exceeds his own set deadlines. Recently, the US has been deploying additional troops to the region, leaving open the possibility of a further escalation of the situation. At the same time, a third US aircraft carrier strike group has set sail for the Middle East. Trump also expressed dissatisfaction with the lack of support from allies on the issue of the Strait of Hormuz, and hinted that countries dependent on the strait for navigation should resolve the issue themselves. White House Press Secretary Carina Levitt explicitly stated that the core goals of the US military's "epic rage" operation are to destroy the Iranian Navy, ballistic missiles, defense industry infrastructure, and prevent Iran from acquiring nuclear weapons, without listing the full reopening of the Strait of Hormuz for navigation as a core military objective. US Secretary of Defense Pete Hegseth also stated that the next few days will be a critical period for US military operations against Iran, and if Iran does not reach an agreement, the conflict will escalate, emphasizing that the issue of the Strait of Hormuz is "not just a US problem" and other countries should bear their share of responsibility. Analysts point out that even if the US military ends its military operations, the status of navigation in the Strait of Hormuz remains unclear, as Iran has consistently made sovereignty claims over the waterway a core issue in negotiations. This means that the global energy market and economy still face long-term risks of fluctuations. The Strait of Hormuz accounts for about 20% of global seaborne oil supply, and has been largely closed since the outbreak of this conflict, directly driving up Brent crude oil prices by about 60% in March, and US gasoline prices have also surpassed $4 per gallon for the first time since 2022. Politically, this military action against Iran has also brought Trump considerable political risks. He had promised during his campaign not to start new wars, and the Republican Party is under pressure to lose control of Congress in the November midterm elections. Senior officials in the White House are increasingly concerned about the economic pain of war, which will directly affect the re-election prospects of Republican lawmakers.