Wall Street just had its best day in nearly a year over a rumor

As the bell rang out over the New York Stock Exchange on Tuesday afternoon, it was an unusually beautiful day: 71 degrees, sun shining on the faces of people swarming through the city. After the brutal cold of winter, it felt like something of a miracle.

The markets had spent the day chasing one of their own.

Iran’s official news agency reported an unconfirmed phone call between President Masoud Pezeshkian and the European Council president, where Pezeshkian said Iran had the “necessary will” to end the war; provided that “essential conditions are met, especially the guarantees required to prevent repetition of the aggression.” The S&P went vertical immediately afterward. It didn’t matter that Pezeshkian had said nearly the same thing on X earlier this month, or that it wasn’t even clear how big a development this was.

The Nasdaq still snapped back 795 points, recovering nearly half of its total drawdown over the course of the U.S.-Israeli-Iran war in a single day. The S&P soared 2.89%, representing $1.7 trillion alone, recovering about 30% of its total drawdown since the war began. The Dow also soared 1,125 points. All three indexes had their biggest single-day gains since May.

The incredible thing about the rally today wasn’t the sca...