March 25th Market Overview

Happy Wednesday

Nice bounce today with oil pulling back below $100 and tech catching a bid. Arm had a monster day after announcing they're building their own chips now.

Peace plan headlines drove most of the action but I'm not sure how much sticks given Iran rejected the proposal within hours. February import prices also came in way above expectations today, highest since March 2022, and that was before the energy spike.

Let’s dig in...

Today's Big Picture

1. Iran Rejects U.S. Peace Plan But Markets Don't Care 

The U.S. sent Iran a 15-point ceasefire proposal through Pakistan. Iran rejected it within hours and countered with five conditions, including full sovereignty over the Strait of Hormuz and war reparations. The two sides are nowhere close. But the mere existence of a written proposal was enough to send stocks higher and oil lower.

2. Oil Drops Hard on Ceasefire Hope 

Brent fell below $100. WTI dropped to around $90. This is still way above pre-war levels, but the direction matters. Gas is at $3.98 nationally and United Airlines CEO Scott Kirby warned fares could rise another 20 percent if fuel stays elevated.

3. Arm Unveils Its First In-House Chip Arm Holdings 

$ARM announced its first production data center CPU and a server rack to run them. The company said it expects $15 billion in revenue from the chip by 2031. This is a business model shift from licensing designs to actually selling silicon. Raymond James upgraded the stock to outperform with a $166 target.

Market Overview

Index Performance

Stock Spotlight

Chewy $CHWY ( ▲ 13.65% )  
rallied after beating Q4 earnings estimates and issuing full-year sales guidance above the Street. The stock hit a 52-week low on Friday so this is a sharp reversal off the bottom.

Advanced Micro Devices $AMD ( ▲ 7.18% )  
and Intel $INTC both gained after Nikkei Asia reported they're hiking CPU prices starting this month. Server chip lead times have ballooned from two weeks to eight to twelve weeks.

JetBlue $JBLU ( ▲ 13.96% )  
hired advisors to explore a potential merger with United $UAL, Alaska Air $ALK, or Southwest $LUV. Still early stage and may not go anywhere.

Big Name Updates

Meta $META ( ▲ 0.38% )  
lost a landmark social media addiction trial in Los Angeles. The jury ruled against the design of the platform itself rather than user content, which gets around Section 230 protections. The company is also laying off a few hundred employees today across Reality Labs, sales, and recruiting.

Merck $MRK ( ▲ 2.58% )  
agreed to buy Terns Pharmaceuticals $TERN for $6.7 billion in cash. The deal brings AI-powered clinical trial data collection in-house and closes in Q2.

PDD Holdings $PDD ( ▲ 5.15% )  
reported lower quarterly profit as Chinese e-commerce competition grinds margins. Revenue still grew 12 despite the pressure.

Other Notable Company News

KB Home $KBH ( ▼ 2.47% )  
cut full-year delivery and revenue guidance. Management said high mortgage rates and war uncertainty are hurting the spring selling season.

Beyond Meat $BYND delayed its earnings report after finding inventory accounting errors in the first three quarters of 2025.

On Holding $ONON ( ▼ 11.29% )  
fell after announcing its CEO will step down May 1, with co-founders taking over. Stock is at its lowest since November.

Circle $CRCL ( ▲ 2.56% )  
recovered from its worst single-day drop ever after draft stablecoin legislation looked less restrictive than feared.

EchoStar $SATS ( ▲ 8.19% )  
gained after reports that SpaceX could file for an IPO this week. EchoStar holds roughly a 3 stake in the company.

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Sector Watch

Bond Market

The 10-year yield dropped to around 4.33, a welcome pullback after yesterday's ugly session. The 2-year auction was weak and the 10-year had pushed above 4.39.

Tomorrow: initial jobless claims. Fed governor Lisa Cook speaks on financial stability in the evening.

Policy Watch

Iran War / Diplomacy

Mediators from Turkey, Egypt, and Pakistan are pushing for a U.S.-Iran meeting by Thursday. Iran's counteroffer includes sovereignty over the Strait of Hormuz, reparations, and security guarantees. Gulf states are reportedly lobbying Trump to continue the war.

The 82nd Airborne is deploying 2,000 to 3,000 soldiers to the region. Both sides are talking but very far apart.

Energy Response

• EPA waived restrictions on E15 gasoline starting May 1 to boost summer fuel supply

• Trump previously waived Jones Act shipping rules for 60 days

• ConocoPhillips $COP CEO said a Venezuela return isn't happening without policy guarantees from both governments

Inflation Signal

Import prices rose 1.3 in February, more than double what economists expected. Export prices up 1.5. These are the highest import prices since March 2022, a few months before CPI peaked above 9.

I think this is the number that should worry people more than anything else today. Pipeline inflation was already building before the energy spike fully hit.

Recession Watch

Moody's has recession odds at 48.6 for the next 12 months. Goldman at 30. Wilmington Trust at 45. Normal baseline is around 20.

DataTrek flagged that three historical triggers for double-digit annual stock declines are all active right now: recession risk, military conflict, and hawkish Fed policy.

Government Shutdown

TSA says nearly 500 officers have quit during the current 40-day shutdown. Security lines have hit 4.5 hours at some airports. Friday is the last day Congress could reach a deal before a two-week recess.

What to Watch

U.S.-Iran Meeting Push by Thursday 
Mediators are trying to arrange a face-to-face or indirect meeting between the U.S. and Iran by tomorrow. If it happens, expect another relief rally. If it doesn't, oil probably reverses.

SpaceX IPO Filing 
Could come as soon as this week per The Information. A $75 billion raise at a $1.25 trillion valuation would be the largest IPO ever. This would set the tone for the entire IPO market.

Retail Investor Absence 
VandaTrack data shows retail investors net sold $5.5 million of stocks in the first two hours today. They sold Nvidia. They're not chasing this rally. When retail sits out a bounce, I pay attention. It either means the smart money is wrong or the dumb money is scared. Usually the latter.

Helium Supply Crunch
Iranian attacks have hit helium production in Qatar, which accounts for a third of global supply. Helium is critical for chip manufacturing and MRI machines. One researcher said his institute's supply could be halved this year. This is a sleeper story that could matter a lot if it gets worse.

Thanks for reading - you are now the more informed 🙂

- John

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