Stocks Finish Higher on US Push to End Iran War

The S&P 500 Index ($SPX) (SPY) on Wednesday closed up +0.54%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.66%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.67%.  June E-mini S&P futures (ESM26) rose +0.56%, and June E-mini Nasdaq futures (NQM26) rose +0.68%.

Stocks settled higher on Wednesday as crude oil prices retreated, and bond yields fell after the Trump administration stepped up efforts to end the war with Iran.  The US sent a 15-point peace proposal to Iran that covers a rollback of Iran’s nuclear program, including the resumption of monitoring by the International Atomic Energy Agency, limits on missiles, and access for shipping through the Strait of Hormuz.  In return, Iran would get relief from economic sanctions.  WTI crude oil tumbled more than -2% on the news, and the 10-year T-note yield fell -4 bp to 4.32%.

However, stock index futures fell from their best levels on Wednesday, and crude oil prices rebounded from their lows after Iran’s semi-official news agency Fars said Iran rejects the US ceasefire proposal and said a truce and peace talks are not viable in current conditions.  Iran wants a complete halt to “aggression and assassinations” by the enemy and the establishment of concrete mechanisms to ensure that the war is not reimposed on Iran.  Also, Iran wants guaranteed, clearly defined payment for war damages and reparations, and international recognition and guarantees of Iran’s sovereign right to exercise authority over the Strait of Hormuz. 

Despite the US peace proposal, Iran has kept up missile and drone attacks today on Israel and the Arab Gulf states.  Saudi Arabia intercepted a drone in the east of the country, while a strike targeting Kuwait set ablaze a fuel tank at its main airport.  There are concerns that the Iran war could escalate throughout the Middle East.  Saudi Arabia agreed to give the US military access to King Fahd Air Base, and the UAE closed an Iranian-owned hospital and club.  Iran’s Middle Eastern neighbors are growing frustrated with Iran, which has responded to US and Israeli attacks by hitting targets in several nearby nations.  

US MBA mortgage applications fell -10.5% in the week ended March 20, with the mortgage purchase sub-index down -5.4% and the refinancing mortgage sub-index down -14.6%.  The average 30-year fixed rate mortgage rose +13 bp to 6.43% from 6.30% the prior week.

The US Feb import index ex-petroleum rose +1.2% m/m, stronger than expectations of +0.4% m/m and the biggest increase in 4 years.

Crude oil prices (CLK26) remain high despite attempts to boost global supplies.  The IEA on March 11 released 400 million barrels from emergency oil stockpiles and said the war against Iran is disrupting 7.5% of global oil supply, and the conflict will cut global oil supply by 8 million bpd this month.  The closure of the Strait of Hormuz, through which about a fifth of the world’s oil and natural gas flows, has choked off oil and gas flows due to Iran’s attacks on shipping in the waterway and forced Gulf producers to cut output because they can’t export from the region.  Iran is also seeking to control ship transit through the Strait of Hormuz, asking vessels to provide lists of crew and cargo, along with voyage details and bills of lading if they want to travel through the waterway.  Goldman Sachs warns that crude prices could exceed the 2008 record high of close to $150 a barrel if flows through the Strait of Hormuz remain depressed through March.

The International Energy Agency said Monday that more than 40 energy sites across nine countries in the Middle East have been "severely or very severely" damaged, potentially prolonging disruptions to global supply chains once the war in Iran ends. 

The markets are discounting a 4% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets settled higher on Wednesday.  The Euro Stoxx 50 closed up +1.22%.  China's Shanghai Composite closed up +1.30%.  Japan's Nikkei Stock 225 closed up +2.87%.

Interest Rates

June 10-year T-notes (ZNM6) on Wednesday closed up by +15 ticks.  The 10-year T-note yield fell -4.0 bp to 4.320%.  June T-notes moved higher on Wednesday as reports of a US peace plan to end the war with Iran knocked crude oil prices down by more than -2%, reducing inflation expectations.  The 10-year breakeven inflation rate dropped to a 2.5-week low of 2.299% on Wednesday. 

T-notes fell back from their best levels on Wednesday after the US Feb import index ex-petroleum posted its largest increase in 4 years.  Also, weak demand for the Treasury’s $70 billion auction of 5-year T-notes weighed on T-note prices as the auction had a bid-to-cover ratio of 2.29, below the 10-auction average of 2.36 and the weakest in 3.5 years. 

European government bond yields moved lower on Wednesday.  The 10-year German bund yield fell -7.0 bp to 2.958%.  The 10-year UK gilt yield fell -11.9 bp to 4.839%.

The German Mar IFO business climate fell -2.0 to a 13-month low of 86.4.

ECB President Lagarde said, it is too early to determine the response to the war, and "we will not act before we have sufficient information on the size and persistence of the shock and its propagation."  She added that the initial shock may be smaller than in 2022, given a more benign macroeconomic backdrop.

UK Feb CPI rose +3.0% y/y, right on expectations.  Feb core CPI rose +3.2% y/y, stronger than expectations of +3.1% y/y.

Swaps are discounting a 62% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

Space and satellite stocks surged on Wednesday as The Information reported that SpaceX aims to file a prospectus for an initial public offering as soon as this week. Globalstar (GSAT) closed up more than +11%, and AST SpaceMobile (ASTS) and Rocket Lab (RKLB) closed up more than +9%.  Also, EchoStar (SATS) closed up more than +7%.

Chip makers moved higher on Wednesday, a supportive factor for the overall market.  Advanced Micro Devices (AMD) closed up more than +7%, and Intel (INTC) and Marvell Technology (MRVL) closed up more than +6%.  Also, Nvidia (NVDA) closed up more than +2%, and Qualcomm (QCOM) and Texas Instruments (TXN) closed up more than +1%. 

Memory and data storage stocks moved lower on Wednesday.  Sandisk (SNDK) and Micron Technology (MU) closed down more than -3%.  Also, Seagate Technology Holdings Plc (STX) and Lam Research (LRCX) closed down more than -2%, and Western Digital Corp (WDC) closed down more than -1%. 

Braze Inc (BRZE) closed up more than +19% after forecasting 2027 revenue of $884 million to $889 million, well above the consensus of $858.3 million.

ARM Holdings Plc (ARM) closed up more than +16% to lead gainers in the Nasdaq 100 after saying it will start selling its own chips for the first time and expects to generate about $15 billion annually within five years. 

Chewy (CHWY) closed up more than +13% after forecasting 2027 net sales of $13.60 billion to $13.75 billion, stronger than the consensus of $13.59 billion. 

Terns Pharmaceuticals (TERN) closed up more than +5% after Meck & Co agreed to buy the company for about $6.7 billion, or $53 per share in cash.

Vertiv Holdings (VRT) closed up more than +2% after HSBC initiated coverage of the stock with a buy recommendation and a price target of $325.

ON Holding AG (ONON) closed down more than -10% after announcing that CEO and CFO Hoffmann will step down from his roles, effective May 1.

Liberty Energy (LBRT) closed down more than -2% after announcing it will offer $450 million of convertible senior notes due 2032 in a private offering.

Generac Holdings (GNRC) closed down more than -1% after forecasting 2028 gross margins flat compared with 2026/27. 

KB Home (KBH) closed down more than -1% after forecasting Q2 home deliveries of 2,250 to 2,450, below the consensus of 2,637. 

Earnings Reports(3/26/2026)

Argan Inc (AGX), BV Financial Inc (BVFL), C&F Financial Corp (CFFI), CapsoVision Inc (CV), Commercial Metals Co (CMC), Designer Brands Inc (DBI), Hub Group Inc (HUBG), Lovesac Co/The (LOVE), Lucid Diagnostics Inc (LUCD), Lumexa Imaging Holdings Inc (LMRI), Newsmax Inc (NMAX), Nkarta Inc (NKTX), Oxford Industries Inc (OXM), RCM Technologies Inc (RCMT), REX American Resources Corp (REX), SBC Medical Group Holdings Inc (SBC), Shoe Carnival Inc (SCVL), SKYX Platforms Corp (SKYX), Southland Holdings Inc (SLND), Upstream Bio Inc (UPB), Utah Medical Products Inc (UTMD), Whitefiber Inc (WYFI), XCF Global Inc (SAFX).