U.S. equities staged a powerful rally on Tuesday, with all three major indexes surging as hopes for an end to the Iran conflict drove a broad-based risk-on move. The Dow Jones Industrial Average jumped more than 1,000 points, while the S&P 500 climbed nearly 3% and the Nasdaq Composite surged close to 4%, led by strength in megacap technology names

The rally capped off what has been a turbulent month and a tough quarter for investors. Despite Tuesday’s sharp rebound, the S&P 500 and Dow are still on track to log their worst quarterly performance since 2022, underscoring how significant the recent drawdown has been even after today’s relief-driven surge.

Market Movers:

  • Apellis Pharmaceuticals (APLS) +136% – Shares skyrocketed after Biogen agreed to acquire the company in a deal valued at approximately $5.6 billion. The offer represents a massive premium and sent the stock sharply higher as investors priced in the takeover.
  • Centessa Pharmaceuticals (CNTA) +46% – The stock surged after Eli Lilly announced plans to acquire the company in a cash-and-contingent deal. The acquisition expands Lilly’s footprint in neurological therapies and signals strong demand for Centessa’s pipeline.
  • Virgin Galactic (SPCE) +15% – Shares climbed despite mixed quarterly results, as investors focused on improving cash flow trends and lower operating expenses. Forward guidance pointing to continued improvement into 2026 helped support sentiment.
  • Marvell Technology (MRVL) +10% – Shares rallied after Nvidia announced a $2 billion investment and expanded strategic partnership with the company. The collaboration reinforces Marvell’s role in AI infrastructure and next-generation data center demand.
  • PepGen (PEPG) -56% – Shares collapsed after Phase 2 trial results showed limited efficacy in its myotonic dystrophy treatment. While safety was intact, weak functional outcomes raised serious concerns about the drug’s commercial viability.
  • Service Properties Trust (SVC) -23% – The stock fell after the company announced a large equity offering to help refinance debt. Investor dilution concerns outweighed the intended balance sheet strengthening.
  • McCormick & Company (MKC) -9% – Shares declined despite earnings strength, as investors reacted negatively to the structure of its deal with Unilever. Concerns about dilution and integration weighed on sentiment.
  • Snowflake (SNOW) -5% – Shares slipped following a leadership change in its revenue organization. Even with reaffirmed guidance, investors remained cautious about execution during a key transition period.

Geopolitical Relief Sparks Risk-On Sentiment

Markets rallied after signals emerged that Iran may be open to negotiating an end to the war. Statements from Iranian President Masoud Pezeshkian suggesting a willingness to reach a deal, combined with comments from President Trump indicating the conflict may not last much longer, fueled optimism that energy markets could stabilize.

The prospect of de-escalation sent oil prices sharply lower, easing one of the primary headwinds that has weighed on equities in recent weeks. With energy supply fears easing, investors rotated back into risk assets, particularly high-growth sectors that had been under pressure.

Big Tech Leads the Charge

Technology stocks were at the center of Tuesday’s rally, with megacap names delivering outsized gains. Nvidia, Microsoft, and Meta all surged, reflecting renewed enthusiasm for AI-driven growth and relief from easing macro pressures. The rebound in tech came after weeks of selling driven by rising oil prices and higher-for-longer interest rate expectations. With yields stabilizing and geopolitical risks softening, investors rushed back into growth stocks, driving the Nasdaq’s strong outperformance.

Energy, Inflation, and Fed Implications

Oil markets were a key driver of the day’s move, with crude prices falling sharply on hopes that the war could end soon. Brent crude dropped several percent, while WTI also declined, signaling a potential easing of inflationary pressures tied to energy costs.

Federal Reserve officials, however, remain cautious. Some policymakers have warned that even temporary spikes in energy prices can feed into broader inflation, making it difficult to look past geopolitical shocks. The evolving energy backdrop will likely play a critical role in shaping the Fed’s next policy moves.

Looking Ahead

Investors will be watching closely to see whether Tuesday’s rally marks the beginning of a sustained recovery or simply a short-term relief bounce after a difficult quarter. Key drivers will include developments in the Iran conflict, the trajectory of oil prices, and whether geopolitical tensions continue to ease, as well as upcoming economic data that could confirm or challenge expectations around inflation and growth.