Stocks jumped on Tuesday after Iran's president signaled an openness to negotiations. The S&P 500 gained 2.9% and the Nasdaq went up 3.8%. Oil prices dropped slightly on the news, though crude is still sitting over $100 a barrel. Even with the Tuesday rally, the S&P finished Q1 down 4.8%. The main theme of the quarter has been a massive rotation from tech into energy. Oil majors like Exxon and ConocoPhillips are up nearly 40% year to date due to the Middle East conflict and oil blockade. On the flip side, the big AI and tech trades are pulling back. Microsoft is down 22% and Salesforce dropped 26% for the year. The market is getting cautious about the massive spending required for AI infrastructure and the impact of rising yields. Macro data shows the labor market is in a low hiring and low firing state right now. With the oil shock keeping inflation sticky, expectations for Fed rate cuts are fading. The market is now bracing for an extended pause or even a potential rate hike.