Stocks Climb, Oil Falls on Hopes for Peace Talks

Published as of: March 25, 2026, 9:14 a.m. ET

(Wednesday market open) A glimmer of hope for de-escalation progress has crude oil down 3% and stocks slightly higher early. Pakistan delivered a 15-point peace plan from the U.S. to Iran, The New York Times reported, though conflict continued to rage.  Iran denies any negotiations and said it won't accept U.S. efforts toward a ceasefire, CNBC reported just before the open. On a more positive note, Iran said it would allow "non-hostile" ships to traverse the Strait of Hormuz. Traffic through that key energy chokepoint remains thin, according to media reports, but a small number of vessels went through.

Back home, yesterday's 2-year Treasury note auction got a poor reception, sending short-term yields to eight-month highs on ideas that investors want higher rates to invest in U.S. assets. Federal Reserve speakers return after last week's rate pause, with Fed Gov. Stephen Miran scheduled this afternoon. Yesterday's early March PMI data showed slowdowns in many countries, something central banks likely noticed. "The war is starting to make its mark on the global economy," said Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research (SCFR).

Tuesday saw Wall Street indexes fall again as crude climbed and war-related inflation concerns festered. "Higher energy costs are already raising the cost of inputs and transportation," warned Michelle Gibley, director of international equity research and strategy at SCFR. "The longer energy supplies are disrupted and prices stay elevated, the more inflation could become engrained in inflation expectations and change corporate and consumer behavior."  Speaking of inflation, import prices rose 1.3% month over month in February, the U.S. government said Wednesday, the largest increase since March 2022 and likely sparked by tariffs.

1. Volatility reflects Iran uncertainty: Lack of detail on rumored U.S. talks with Iran and denials of those talks by Iran itself lend a "show me the money" aspect to trading, keeping volatility elevated and making it difficult for the market to be efficient. "Markets are in an accelerated price discovery mode as investors sift through new incoming data points related to the Middle East conflict," said Nathan Peterson, director of derivatives research and strategy SCFR. The CBOE Volatility Index (VIX) briefly fell below 25 on Monday after President Trump posted that the U.S. and Iran are having "very good and productive conversations" and postponed threatened strikes against the country's power plants. The VIX crept back to 27 on Tuesday and remained above 25 this morning, territory typically considered cautionary. Still, the S&P 500 is down less than 5% since the start of the war. The fact that it hasn't completely fallen out of bed could reflect ideas that fighting won't be drawn-out. However, Moody's Analytics said this week that odds of a U.S. recession are up and appear more likely without a quick end to the conflict.
    
2. Bastion of hope seen in small caps, equal-weight: From a technical standpoint, major indexes remain in a downtrend, and the S&P 500 Index saw selling pressure intensify during the final minutes of trading yesterday. That's not a good setup heading into today, at least on the charts. "I'm not sure that we've seen that moment of complete 'capitulation,'" Peterson said. "Typically these flush-out events are accompanied with a 'V' bottom and a VIX spike, not always, but historically." On a positive note, the S&P 500 Equal Weight Index (SPXEW)—which weighs all 500 components the same—and the small-cap Russell 2000^® (RUT) both bounced off their respective 200-day averages on Friday and Monday. "Perhaps the traders could use that as a small bastion of hope," Peterson added. The SPXEW and RUT rose yesterday as other indexes fell, possibly a sign of investors flocking away from names they see as more exposed to war and oil worries. Seven of 11 S&P 500 sectors climbed yesterday even as the indexes themselves fell.
    
3. Private credit anxiety curbs confidence: Fresh headlines about private credit firms limiting investor redemptions didn't help confidence on Wall Street Tuesday. This has been a running theme for some time, reflecting investor nerves as they try to remove funds from more aggressive assets amid concerns about loan quality, especially in the software industry. Apollo Global Management (APO) initially slipped yesterday when Bloomberg reported that its business development company curbed redemptions from one of its largest non-traded private credit funds for retail investors. Ares Management (ARES) fell as the Financial Times reported the firm capped withdrawals from a $10.7 billion private credit fund. While private markets have long been an attractive source of diversification and potential outperformance relative to public markets, access has historically been limited to institutional investors. At Apollo's private debt fund, Apollo Debt Solutions, investors sought to withdraw $1.6 billion, or roughly 11.5% of its $15 billion in net assets (after accounting for the fund's own debt). Apollo will repurchase enough shares for redeeming investors to get about $730 million, Barron's reported. Despite the investor anxiety over these funds, there haven't been signs of defaults. Private credit worries spilled into software stocks yesterday, pinning down shares of Salesforce (CRM) and Microsoft (MSFT).

• Arm Holdings (ARM) soared 13% in early trading. The semiconductor design firm said it expects its CPU business to reach $15 billion in revenue by fiscal 2031 as it begins making its own data center chips. The company also reaffirmed its fiscal fourth quarter guidance and increased its operating margin target. Shares got upgraded by Raymond James.
   
• KB Home (KBH) dropped 1.8% early today after it missed analysts' expectations for both earnings and revenue late Tuesday. Homes delivered fell 14% annually, the average selling price dropped, and the Middle East conflict has added uncertainty for consumers, the home builder said. Net order growth rose year over year.
   
• Chewy (CHWY) leaped 7% this morning following earnings. The company beat consensus on earnings per share and reported revenues in line with consensus. Its outlook also topped expectations.
   
• Alibaba (BABA) added almost 4% today. Barron's reports that China's State Administration for Market Regulation appeared to signal on Wednesday that it would move to end the food delivery price war, which has squeezed margins in recent years.
   
• Estee Lauder (EL) tumbled 10% Tuesday after the company confirmed to media it's in takeover talks with Puig, a Spanish beauty and fashion firm. Shares rose 1% this morning.
   
• Dell (DELL) swam against the strong downward current in the tech sector Tuesday, rising 7.5%. It's benefitted from ideas its server business could make competitive gains.
   
• Tesla (TSLA) rose nearly 2% early today, getting a lift with other auto maker stocks as hopes for peace talks grew. Tesla also might be getting a boost from a report in The Information that Elon Musk's SpaceX could file its initial public offering (IPO) prospectus soon.
   
• Bitcoin (/BTC) was up more than 3% early today but fell nearly 2% yesterday, pulling down a number of crypto-related firms. The worst drop was for Circle Internet Group (CRCL), which fell 20% on worries that a crypto market structure bill would ban rewards on stablecoin balances, Barron's reported. Circle popped back 4% ahead of Wednesday's open.
   
• Gold (/GC) surged nearly 4% this morning, helped by falling yields and a weaker dollar, and mining firm stocks including Freeport-McMoRan (FCX), Hecla (HL), and Newmont (NEM) climbed. Silver and copper also moved higher, buoyed by hopes that peace talks could make progress.
   
• Airline and cruise stocks climbed early today on hope that peace negotiations might begin, and may also be getting a tailwind from the outlines of a bipartisan deal that emerged yesterday that would fund all of the Department of Homeland Security (DHS) except for ICE's migrant removal operations. "Time is tight to get something across the finish line by Friday, but I think there is still at least a 60/40 chance it happens," said Michael Townsend, managing director of legislative and regulatory affairs at Schwab. Congress heads out on recess Friday.
   
• Odds of a Fed rate cut this year fell from 95% a month ago to around 8% this morning, up from 3% late yesterday, according to the CME FedWatch Tool. Futures trading now works in 16% chances of at least one rate hike at some point in 2026. There's even a 4% chance the Fed could hike rates at next month's meeting.

Brent crude oil (/BZ—red line) touched $100 per barrel again yesterday, but futures trading projects a descent to just above $80 by late this year. U.S. crude futures (/CL—yellow line) remain at a discount to Brent thanks to surging U.S. supplies, and are seen falling to around $72 by year-end. Neither would be back to where they traded before the war, however, if futures trading pegs things correctly.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

March 26: No major earnings or data expected.
March 27: Fourth quarter GDP—third estimate and University of Michigan final March Consumer Sentiment.
March 30: No major earnings or data expected.
March 31: March Consumer Confidence and expected earnings from McCormick (MKC) and Nike (NKE).
April 1: March ISM Manufacturing PMI®, March ADP employment, February construction spendings, and expected earnings from Conagra (CAG).