US stock futures surged on Tuesday, March 31, 2026, following reports that President Trump may be willing to end the US-Israeli military campaign in Iran without demanding a full reopening of the Strait of Hormuz. This shift in tone, reported by The Wall Street Journal, raised hopes for a near-term de-escalation of the five-week conflict. Futures tied to the Dow Jones Industrial Average jumped approximately 459 points, or 1%, while S&P 500 futures gained 0.9% and Nasdaq 100 futures rose 0.8%.
Despite the rally, market anxiety remains elevated. The CBOE Volatility Index (VIX) stayed above 30, indicating persistent uncertainty. Oil prices reflected ongoing tensions, with West Texas Intermediate (WTI) crude closing above $100 per barrel for the first time since 2022. On Tuesday morning, WTI futures climbed a further 0.4% to $103.28.
In this environment, investment bank Evercore ISI warned that investors are overly focused on downside risks and unprepared for a potential "stability" scenario. Strategist Julian Emanuel outlined this scenario, which includes a Middle East ceasefire, oil pulling back toward $88 a barrel, and the Federal Reserve holding or cutting interest rates with the 10-year Treasury yield remaining between 4.0% and 4.6%.
Evercore named several top picks across sectors should stability return. In technology, Microsoft and Snowflake were favored as core positions, with Salesforce and ServiceNow also highlighted. Amazon was flagged as trading at a three-year low on a price-to-earnings basis, with analysts seeing a potential fundamental turning point. In semiconductors, ON Semiconductor, Microchip Technology, and NXP Semiconductors were identified as recovery plays if auto demand picks up.
The report also highlighted airlines, noting Delta's March sales running 25% above last year and United Airlines recording its ten largest booking weeks ever this quarter. In industrials, Caterpillar was spotlighted for having its highest backlog coverage in over 15 years. Fintech names like Affirm, Adyen, and Block, which have sold off sharply, were noted as having intact fundamentals, with the sell-off seen as pricing in "excessive negativity."
On the monetary policy front, Federal Reserve Chair Jerome Powell provided some calm, stating the risk of contagion in private credit is low and that inflation pressures appear contained, suggesting no immediate rate hikes are forthcoming. Investors awaited key economic data due later Tuesday, including the March consumer confidence reading and the February JOLTS report, for further clues on the US economy's health.
