What in the world just happened to the Dow? | CNN Business

Markets are rallying on a familiar bet: That President Donald Trump will, once again, back down. (It’s not called TACO Tuesday for nothing.) The Dow, S&P 500 and the Nasdaq just had their best day since May 2025, roaring higher Tuesday in large part because of a report (and semi-confirmation) that the White House is considering an end to America’s involvement in the Iran war without reopening the Strait of Hormuz. CNN later confirmed Trump and his administration increasingly believe that they can’t promise to reopen the strait as a prerequisite to declaring an end to hostilities with Iran. That would be an extraordinary outcome: The war seems nowhere close to being over and, even if it were, the global economic ramifications of Iran continuing to block the critical waterway would be long-lasting – measured in years, not weeks or months. Oil trades on a global market, and US crude and gas prices will remain high as long as the Strait of Hormuz is closed – no matter how much “drill, baby, drill” President Donald Trump proclaims. You’d think that’d be bad news for markets. Nevertheless, the Dow rose by more than 1,000 points, or 2.4% Tuesday. The S&P 500 was up 2.8%;