Iran Reopens Strait of Hormuz to “Non-Hostile” Vessels Amidst US Peace Proposal
Global markets reacted positively to news that Iran will allow “non-hostile” ships safe passage through the Strait of Hormuz, a critical waterway for global energy supplies. This announcement coincides with a reported 15-point peace plan proposed by the United States to Iran, signaling a potential de-escalation of tensions following a month of conflict.
Market Response
Stock markets across Europe and the United States experienced gains on Tuesday, March 25, 2026. The S&P 500 index rose by 0.5%, while the Nasdaq Composite increased by 1%. In Europe, the Stoxx 600 Index climbed 0.8%, with broad-based gains across most sectors. Italy’s FTSE Mib index saw a more significant increase of 1.4%, driven by gains in companies like Fincantieri (+5%) following the release of quarterly data and Prysmian (+3.7%).
Iran’s Conditions for Safe Passage
According to a statement released by Iran’s mission to the United Nations, vessels will be granted “safe passage” through the Strait of Hormuz if they do not participate in or support acts of aggression against Iran and fully comply with declared safety and security regulations. Transit will be coordinated with Iranian authorities. The specific regulations for safe navigation remain undefined as of Wednesday, March 26, 2026. Iran shared a similar statement with the International Maritime Organization (IMO), the UN body responsible for international shipping safety.
US Peace Proposal
United States President Donald Trump announced on Tuesday that he had sent a 15-point peace plan to Iran, expressing cautious optimism about ending the conflict. This follows previous denials from Tehran regarding the existence of negotiations with the US.
Macroeconomic Data
Economic data released on Tuesday showed a slight improvement in US mortgage demand, with a weekly decline of 10.5% compared to a 10.9% decrease in the previous period. The US current account deficit fell to $190.7 billion in the fourth quarter of 2025, below the revised $239 billion from the previous period, and lower than the consensus estimate of $208 billion.
Analyst Outlook
Morgan Stanley anticipates S&P 500 earnings to grow by 20% over the next 12 months, a level historically observed during the exit phases of recessions. Mike Wilson, Morgan Stanley’s chief US equity strategist, believes this supports the view that the current oil shock is unlikely to trigger a broader economic downturn.
Commodity and Currency Movements
WTI crude oil fell 3% to $89 a barrel, while natural gas prices decreased 3.5% at the Amsterdam node. The yield on US Treasury 10-year bonds declined four basis points to 4.33%, with Italian BTPs falling to 3.83% and the spread with the Bund narrowing to 88 basis points. Gold prices rose 2.3% to $4,576.25 an ounce. The euro weakened to 1.155 against the dollar, influenced by a decline in the German IFO index, a measure of economic activity. Bitcoin increased 1% to $70,640.
Company News
- Arm: Shares rose 13% after the company announced plans to build a complete processor, the Arm AGI CPU, targeting the artificial intelligence data center market, with projected revenue of $15 billion by 2031.
- Braze: The cloud-based software company saw a nearly 22% increase in its stock price following a fourth-quarter revenue report of $205.2 million, exceeding analyst expectations.
- CF Industries: Shares of the fertilizer producer fell nearly 4% on news of potential negotiations between the US and Iran, which could alleviate supply shortages that had boosted the company’s stock since the start of the conflict.
- EchoStar: The stock gained nearly 7% following reports that SpaceX could file for an IPO.
- Freeport-McMoRan & Newmont: Both mining and gold companies experienced gains of over 3% due to rising metals prices.
- Energy Companies: Several energy companies, including Diamondback Energy, APA, ConocoPhillips, Occidental Petroleum, and Exxon Mobil, saw declines due to falling oil prices.
- Robinhood: The financial services platform rose 4% after announcing a $1.5 billion share buyback program.
- Terns Pharmaceuticals: The stock gained more than 5% after Merck agreed to acquire the biopharmaceutical company for $6.7 billion in cash.
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