Finding Optimism. St. Patrick’s Day isn’t until tomorrow, but the market’s luck changed a day early after three weeks of losses. The rally stemmed from hopes that President Donald Trump can convince allies to help the U.S. reopen the Strait of Hormuz, a major trade artery, thereby alleviating rising energy prices amid war in the Middle East.

The Dow Jones Industrial Average added 388 points, or 0.8% on the day, while the S&P 500 climbed 1.0%. The Nasdaq Composite gained 1.2%,

Given the pain that a sustained oil shock could deliver to the global economy, “the oil market will drive both credit and equity markets until the Strait of Hormuz is back to normal operation,” Raymond James strategist Tavis McCourt wrote.

All three major indexes have fallen since the war began at the end of February, ending last week at their lowest points since November.

Today, though, investors were finding some cause for optimism. “Iran will be forced to capitulate at some point,” writes BCA Research Chief Strategist Marko Papic. “Its ability to keep Hormuz closed indefinitely is unrealistic. A global coalition of naval escorts will eventually be assembled, as it was in the 1980s during the Tanker Wars.” Meanwhile, the Trump administration, faced with rising costs at home, has plenty of motivation to bring gas prices down.

All that said, we’ve been here before since the war started. “Investors might want to remember that recent rallies often faded,” wrote Joe Mazzola, head trading and derivatives strategist at Charles Schwab.

There are other distractions on tap this week. The Federal Reserve will announce its monetary policy decision Wednesday at the conclusion of its two-day Federal Open Market Committee meeting. The central bank is widely expected to keep the federal-funds rate unchanged at 3.5% to 3.75%.

“There are a couple of reasons to take any signals from this meeting with a pinch of salt,” notes James McCann, senior economist for investment strategy at Edward Jones. “First, a swing in oil prices in either direction could quickly change the Fed’s thinking, and second, markets might slightly discount messages from [Fed Chairman Jerome Powell] given this will be one of the last of his term.”

The Hot Stock: Ciena +7.9%
The Biggest Loser: Mosaic -5.6%

Best Sector: Information Technology +1.4%
Worst Sector: Consumer Staples +0.1%

War and oil have dominated headlines recently, but tech—the market’s previous driver—is still making waves in the background. Nvidia’s global artificial-intelligence conference began Monday and runs through Thursday, sending the shares higher; Meta Platforms likewise rose following a Reuters report (decried as speculative by the company) that the Facebook parent may be slashing head count by 20%.

Investors often cheer the potential savings that job cuts bring, despite the human toll, and Meta has done rounds of big layoffs in the past. However, as my colleague Mackenzie Tatananni reports, the cost reductions pale in comparison to the company’s huge artificial intelligence spending commitments. JPMorgan analysts ran the numbers and “a 20% head count reduction could result in annual cost savings in the range of $5 billion to $6 billion, assuming costs of $300,000 to $400,000 per employee. Meta ended 2025 with 78,865 employees, a 6% increase from the prior year.”

That sounds significant until you remember the AI expenses:

For now, investors appear happy with the rumored reductions. They wouldn’t be they be the first AI-induced job cuts, as Block already announced a 40% head count reduction last month.

If the layoffs do take place, it will likely bring the spotlight back to the huge budgets Big Tech is putting toward AI, instead of its workforce. Layoffs from Meta would be more evidence that white-collar and knowledge workers are firmly in AI’s crosshairs.

Docusign, Lululemon Athletica, and Oklo release earnings tomorrow.

The National Association of Realtors reports pending home sales for February. Economists forecast a 0.5% month-over-month decline, following a 0.8% drop in January.

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