Can this rebound in U.S. stocks hold up? The last day of Q1 surged 3% to close, but over the past month it’s crashed 5%.

On March 31, U.S. stocks’ three major indexes surged. The Dow jumped more than 1,125 points, and the Nasdaq soared nearly 4% in a single day, recording its strongest one-day performance since May 2025. But this “rally on the last day” can’t mask the harsh reality: the S&P 500 fell 5.09% for the entire month of March, the worst single-month performance since 2022; and the market’s confidence is far weaker than the indexes make it look.
(Background: Major news! The Iranian president said they are “ready to end the war”! Oil prices tumbled, the Nasdaq index surged 3%, and Bitcoin climbed to $68,000)
(Additional context: Wintermute: Bitcoin’s price is preparing to “make a big move”! In the worst case, it could drop into the $60,000 range)

Table of contents

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• Low-volume rebound + VIX stays elevated
• Is oil the core focus right now?
• Asia’s capital runs for the exits—$52 billion out in one month

On March 31, the U.S. stock market closed. The Dow rose 2.49% (+1,125 points) to 46,341.51, the S&P 500 gained 2.91% to 6,528.52, and the Nasdaq climbed 3.83% to 21,590.63.

The last trading day of Q1 is a bit like an attempt to wrap up the season’s performance.

Looking back, the S&P 500 dropped 5.09% in March, the worst single month since the 2022 bear market.

The Nasdaq fell 4.75%, the S&P 500 dropped 4.6%, and the Nasdaq plunged 7.1%—again, the worst quarter since 2022.

Low-volume rebound + VIX stays elevated

The biggest problem with this rally is that trading volume is clearly too low. On 3/31, Korea’s KOSPI volume was only about 80% of the average over the past month.

The market broadly interprets this as not institutions opening new positions, but a technical rebound driven by short-covering. Closing short positions and the short-squeeze effect push the index higher in the short term, but there’s no incremental funding to back it up.

On 3/31, the VIX—the fear index—closed at 25.25. In a normal market, the VIX should be between 15 and 20. A level above 25 means investors are still highly on guard and not reassured just because of a big one-day rally.

More importantly, this week, Trump has repeatedly been shouting TACO-style statements like “U.S. troops are about to withdraw” and “the war will end soon.” Each time the market hears such remarks, its reaction has grown weaker. On March 31, the White House announced that Trump would deliver a nationwide address at 9 p.m. on April 1, but that also didn’t spark much additional upside momentum.

This is a classic “low-conviction rebound”—the index is up, but now the market’s excess cash may be best used to go short.

Is oil the core focus right now?

For U.S. stocks to truly stabilize, the “real” reopening of the Strait of Hormuz is needed.

Since the start of hostilities, the Strait would normally see more than 100 tankers pass through each day. Now, in just one month, only 21 have passed. The Islamic Revolutionary Guard Corps (IRGC) has set up a paid passage system, and more than 150 ships are anchored outside the strait waiting. As a result, 20% of the world’s crude oil and LNG supply is being disrupted.

Goldman Sachs analyst Daan Struyven’s team directly characterized this as “the largest supply shock to the global crude oil market ever,” and raised its 2026 Brent average price forecast to $85 per barrel. Mizuho also raised its 2026 oil price outlook by 14% to $73.25 per barrel.

Several investment banks warned that if oil prices touch $150, it will trigger a global recession.

Asia’s capital runs for the exits—$52 billion out in one month

The region most hurt by the recent surge in oil prices is Asia, because 80% of Asia’s crude oil imports have to go through the Strait of Hormuz.

In March, capital outflows from Asian emerging markets were about $52 billion, setting the biggest single-month record since the 2009 global financial crisis—far larger than during the early days of the pandemic.

• Taiwan: outflow of $25.28 billion (highest in the whole region)
• South Korea: outflow of $13.5 billion
• India: outflow of $10.17 billion

With its outflow on such a large scale, Taiwan is nearly twice South Korea. Foreign capital has pulled back, the currency is under pressure, and the stock market is correcting—spillover effects are spreading across Asia.

Even though the MSCI Asia-Pacific index also rose on 3/31 and posted its largest one-day gain since April 2025, and Europe’s STOXX 600 index was also up 2.5%, a one-day rebound can’t make up for the bleeding across the whole quarter.

Now the biggest unknown for the market is the April earnings season—can it hold up, or will it blow up? Everyone is waiting to see.

The above is not investment advice.