Stock Daily — March 25, 2026

All three indexes closed higher: S&P 500 at 6591.90, +0.54%; Nasdaq 21929.83, +0.77%; Dow 46429.49, +0.66%. VIX dropped from 27 to 25.33, down about 6.2%. The 10-year yield fell roughly 6bp to 4.33%. Looks like a decent bounce on the surface — but peel it open and it’s all geopolitical sentiment driving the tape.

After yesterday’s close, news broke that the U.S. passed Iran a 15-point ceasefire proposal through Pakistan. Trump struck a triumphant pose. Index futures jumped in after-hours and kept running into this morning’s pre-market. But Iran quickly rejected it publicly, listing five preconditions — one of which demands recognition of Iran’s sovereignty over the Strait of Hormuz. The Strait is an international waterway; per EIA data, roughly 21% of global seaborne oil trade passes through it. The U.S. cannot concede on sovereignty. Iran simultaneously threatened to open a second front at the Bab el-Mandeb Strait if U.S. ground forces are deployed. Bab el-Mandeb carries about 12% of global seaborne oil. In the extreme scenario where both chokepoints are blocked simultaneously, roughly 25 million barrels per day of shipping capacity gets disrupted — a scenario the market has priced at exactly zero.

Midday, the Bushehr nuclear plant was struck again. Indexes dipped sharply intraday. The White House immediately came out to reassure — saying negotiations are progressing well, with a military action timeframe of 4 to 6 weeks. The market chose to believe the reassurance over reality and closed green. The trading logic is transparent: betting Trump won’t let the stock market crash. But since the Middle East conflict started on February 28, the index has bounced from oversold conditions three times without effectively reclaiming the 10-day moving average. Today’s close barely reclaimed the 5-day but remains below the 10-day, with 6700 acting as heavy resistance. Without substantive progress by Friday, weekend hedging sell-off will likely push indexes back toward the March 14 low around 6475.

Materials XLB led at +1.98%, Healthcare XLV +1%, Consumer Discretionary XLY +0.96%. Both cyclical and defensive names rallied — money is doing a risk-appetite repair but without conviction. Energy XLE actually fell 0.44%; ceasefire expectations pressured oil sentiment, yet WTI stubbornly held above $90, not budging. Crude traders are far cooler-headed than equity traders.

Completely buried under the ceasefire drama was a set of data worth flagging. BLS reported U.S. February import prices rose 1.3% month-over-month, versus expectations of 0.5% — more than double, the largest single-month increase since March 2022. The cost transmission from the energy conflict has entered hard data. The market selectively ignored it today.

Per Nikkei Asia, AMD and Intel simultaneously notified customers of 10-15% CPU price hikes, citing AI data center demand far outstripping supply plus rising costs. Both stocks popped about 7% intraday, but Tech XLK overall gained only 0.45% — the market treated it as a stock-specific event. The two largest x86 manufacturers raising prices simultaneously is not an isolated incident — it’s a signal of supply chain pricing power shifting. Second-half 2026 gross margin pressure on tech companies will be worse than currently expected.

Geopolitical risk hasn’t been removed, just temporarily anesthetized by an already-rejected ceasefire proposal. Import prices beating expectations confirms the inflation transmission chain is live; chip price hikes confirm supply constraints are spreading. The conditions to change my view are specific: either Iran drops the Hormuz sovereignty demand and returns to the table, or VIX falls below 20 with the index holding above 6700 for more than three trading days. Until one of those materializes, rallies are better treated as windows to reduce exposure.