Financial Markets                      03/31 15:35

   

   NEW YORK (AP) -- U.S. stocks surged to their best day since last spring, and 
the Dow Jones Industrial Average soared 1,125 points on Tuesday as doubt swung 
back to hope on Wall Street about a possible end to the war with Iran.

   The S&P 500 leaped 2.9% for its largest gain since May. Just a day before, 
worries about the war had sent the main measure of Wall Street's health more 
than 9% below its all-time high set early this year.

   The Dow Jones Industrial Average rallied 2.5%, while the Nasdaq composite 
jumped 3.8%.

   The rebound came as financial markets seized on a couple tenuous signals for 
hope about a possible end to the war. It's the latest manic swing following 
weeks of frenetic back and forth amid uncertainty about the war. The moves also 
came as Wall Street marked the end of the year's first quarter, a milestone 
that can cause a flurry of trading as fund managers close their books.

   Analysts said optimism entered markets overnight following a report from The 
Wall Street Journal saying President Donald Trump told aides he's willing to 
end the U.S. military campaign against Iran even if the Strait of Hormuz 
remains largely closed. The strait is a narrow waterway connecting the Persian 
Gulf to the open ocean, and a fifth of the world's oil sails through it on a 
typical day.

   Oil prices then took a sudden and sharp turn lower in midday trading 
following a news report from the Middle East quoting Iran's president Masoud 
Pezeshkian as saying it has "the necessary will to end the war" as long as 
certain requirements are met, including "guarantees to prevent a recurrence of 
aggression."

   The worry on Wall Street has been that the war may last a long time and keep 
oil and natural gas from the Persian Gulf out of global markets, which could 
create a brutal blast of inflation. Following Tuesday's possible signals of 
hope, the price for a barrel of Brent crude oil, the international standard, 
fell 3.2% to settle at $103.97. Benchmark U.S. crude erased a gain from the 
morning and eased 1.5% to settle at $101.38.

   Oil prices could quickly revert to spiking, to be sure, if tankers carrying 
crude can't get through the strait easily. Iran attacked a fully loaded Kuwaiti 
oil tanker in the Persian Gulf in the latest fighting in the region.

   And oil prices have already shot high enough that inflation in Europe 
accelerated to 2.5% in March, up from February's 1.9%.

   In the United States, the price for a gallon of gasoline topped $4 per 
gallon for the first time since 2022. That's squeezing budgets for U.S. 
households and preventing spending on other things. Worries about that and 
pressured profit margins for companies meant the S&P 500 closed Tuesday with 
its worst loss for a quarter since the summer of 2022.

   The 4.6% loss would have been even worse if not for Tuesday's easing for oil 
prices, which helped stocks of companies that have big fuel bills. United 
Airlines soared 8.1%, and Norwegian Cruise Line Holding steamed 5.9% higher to 
trim their losses for the year so far.

   Tech stocks were the strongest forces lifting the market in a widespread 
rally where four out of every five stocks within the S&P 500 rose. Marvell 
Technology shot up 12.8% after Nvidia invested $2 billion in the company and 
announced a partnership with it. Nvidia rose 5.6% and was the single strongest 
force lifting the S&P 500.

   Centessa Pharmaceuticals soared 44% after Eli Lilly said it was buying the 
company working on treatments for excessive daytime sleepiness and other 
neurological conditions. Lilly, which is paying up to $7.8 billion if certain 
conditions are met, rose 3.7%

   They helped offset a 6.1% drop for McCormick. The spice company is buying 
most of Unilever's food business, including such brands as Hellmann's, for cash 
and stock valuing it at $44.8 billion.

   All told, the S&P 500 jumped 184.80 points to 6,528.52. The Dow Jones 
Industrial Average climbed 1,125.37 to 46,341.51, and the Nasdaq composite 
rallied 795.99 to 21,590.63.

   They benefited from easing pressure from the bond market, where Treasury 
yields sank again. The yield on the 10-year Treasury fell to 4.32% from 4.35% 
late Monday and from 4.44% at the end of last week. That's a significant move 
for the bond market.

   Lower yields should pull downward on rates for mortgages and other loans for 
U.S. households and businesses, which have been screaming higher since the war 
began. The yield on the 10-year Treasury was at just 3.97% in late February, 
before worries about high oil prices pushed traders to erase bets for cuts to 
interest rates by the Federal Reserve this year.

   Yields remained lower following a couple reports Tuesday on the U.S. economy 
that came in better than economists expected. One said confidence among U.S. 
consumers unexpectedly improved. The other said U.S. employers were advertising 
more job openings at the end of February than expected, though fewer than the 
month before.

   In stock markets abroad, indexes rose in Europe following a tougher finish 
in Asia. South Korea's Kospi fell 4.3%, and Japan's Nikkei 225 lost 1.6% for 
two of the bigger moves.

   ___

   AP Business Writers Chan Ho-him and Matt Ott contributed.

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