US Market Wrap (March 31, 2026)
1. Key Takeaways
- Markets surged on easing Middle East war concerns
- Magnificent 7 led the rally
- The move was driven by sentiment + technical factors, not fundamentals
- Geopolitical and inflation risks still remain
2. What Drove the Rally
(1) War De-escalation Hopes
- Trump signaled ending the war without military reopening of the Strait of Hormuz
- Iran stated it does not want war and is ready for a ceasefire
→ Both sides signaling de-escalation
→ Market interpretation:
Lower geopolitical risk → Lower oil spike risk → Risk-on sentiment
(2) Shift in Market Sentiment
- Before: Fear of escalation and oil shock
- Now: Possibility of war ending
→ Reduced uncertainty → Strong buying interest
3. Sector & Stock Leaders
Magnificent 7 Rally
- Meta +6.67%
- Nvidia +5.59%
- Other mega-cap tech stocks +3~6%
Why Tech Led
- Recent pullback → valuation reset
- Forward P/E dropped below 20x
- AI growth narrative still intact
→ “Attractive valuation + reduced risk”
4. Economic Data Check
(1) Labor Market
- JOLTS hiring rate: 3.1%
- Back to early pandemic levels
→ Clear signs of cooling labor market
(2) Inflation Expectations
- 12-month inflation expectations: 6.2% (spike)
→ Ongoing supply shock concerns
→ Inflation risk not fully contained
Interpretation
- Slowing labor market + rising inflation expectations
→ Macro environment remains mixed
→ This rally is not driven by improving fundamentals
5. Technical Factors Behind the Move
(1) Pension Rebalancing
- End of month / quarter
- Institutional buying to rebalance portfolios
→ Strong downside support
(2) Short Squeeze
- CTA funds forced to cover short positions
- Accelerated buying pressure
→ Amplified upside momentum
6. Overall Assessment
Nature of the Rally
- Combination of geopolitical relief + technical rebound
Positives
- Reduced geopolitical risk
- Attractive big tech valuations
- Strong institutional flows
Risks
- Iran nuclear issue unresolved
- Strait of Hormuz uncertainty
- Oil price volatility
- Rising inflation expectations
7. One-Line Summary
This rally is a relief-driven and technically supported rebound, not yet a confirmed trend reversal.