White House & Policy - March 25, 2026 (EOD)

 ## Policy Recap The administration today advanced its diplomatic efforts by proposing a 15-point peace plan aimed at de-escalating the ongoing conflict with Iran. This initiative was met with mixed reactions from Tehran, which publicly rejected the plan, signaling continued tensions. Despite the rejection, the administration emphasized ongoing negotiations, maintaining cautious optimism about potential progress toward a ceasefire. This diplomatic push was a key policy highlight, reflecting a strategic attempt to stabilize geopolitical risks that have been influencing market volatility. On the domestic front, the administration issued an executive order temporarily waiving certain anti-smog fuel regulations to address surging gasoline prices amid the Middle East conflict. This move aims to ease fuel costs for consumers during a period of heightened energy price pressures. Additionally, lawmakers in Congress remained gridlocked on key defense spending bills, with Republicans blocking a Democratic push for a subpoena related to Trump Jr., adding a layer of political uncertainty that markets monitored closely. Throughout the trading session, markets digested these policy developments with a focus on the potential for reduced geopolitical risk and the impact of regulatory relief on energy prices. The administration’s diplomatic overtures provided a tentative boost to risk appetite, while the executive order on fuel standards was viewed as a pragmatic step to mitigate inflationary pressures. Congressional stalemates, however, kept some risk premiums elevated, reflecting ongoing legislative uncertainty. ## Market Reaction The broad market responded positively to the administration’s diplomatic initiative and regulatory relief measures. The S&P 500 closed up 0.38% at $655.65, while the Nasdaq 100 gained 0.43% to $586.49. The Dow Jones outperformed slightly with a 0.48% rise to $463.39, and the Russell 2000 led gains with a 1.02% advance, indicating a broad-based risk-on sentiment. Futures had opened higher on the news of the peace plan but showed some intraday volatility as Tehran’s rejection tempered enthusiasm. In fixed income, the 20+ Year Treasury ETF (TLT) rose 0.79% to $86.69, reflecting a flight to safety amid lingering geopolitical risks despite the diplomatic overture. The U.S. dollar index (UUP) strengthened modestly by 0.72% to $27.85, supported by safe-haven demand and expectations of continued Fed vigilance given inflation concerns exacerbated by energy prices. Oil prices retreated sharply, with the US Oil Fund (USO) down 1.21% to $113.15, as markets priced in hopes for a de-escalation in the Middle East. Gold (GLD) rallied 2.29% to $413.40, benefiting from the softer dollar and persistent geopolitical uncertainty. Intraday swings were notable around announcements, with oil and gold exhibiting inverse moves as traders balanced the risk-off and risk-on narratives. Overall, risk sentiment shifted cautiously higher, buoyed by the administration’s diplomatic efforts and regulatory steps, but tempered by ongoing conflict risks and political gridlock in Washington. ## Sector Scorecard - **Financials (XLF):** Marginal gain of 0.10% to $49.33. The sector showed resilience amid mixed policy signals, with investors cautiously optimistic about reduced geopolitical risk but mindful of legislative uncertainty affecting credit markets. - **Energy (XLE):** Declined 0.43% to $60.58. Despite the administration’s regulatory relief on fuel standards, energy stocks retreated as oil prices fell on ceasefire hopes, reflecting sensitivity to supply-demand dynamics and geopolitical developments. - **Industrials (XLI):** Rose 0.67% to $165.10. The sector benefited from expectations of increased defense spending amid ongoing conflict, despite congressional gridlock. Defense contractors like **$AIR** surged on strong earnings and raised forecasts, reflecting policy-driven demand. - **Technology (XLK):** Gained 0.33% to $136.60. Tech stocks showed modest strength, supported by AI sector optimism and reduced geopolitical risk, although some names faced pressure from regulatory and legislative uncertainties. - **Healthcare (XLV):** Led sector gains with a 1.01% rise to $146.25. Healthcare stocks were buoyed by policy developments around drug pricing and regulatory approvals, including Merck’s $6.7 billion acquisition of Terns Pharmaceuticals, signaling confidence in innovation-driven growth. ## Winners & Losers ### Today's Policy Winners - **$AIR** +9.93%: Strong Q3 earnings and raised sales forecast boosted shares, reflecting increased defense spending expectations amid geopolitical tensions. - **$ARM** +17.38%: Shares surged on raised price targets tied to AI chip demand, supported by administration focus on technology leadership. - **$BZUN** +13.62%: Benefited from easing trade tensions and positive earnings, reflecting improved cross-border commerce outlook. - **$PAYS** +34.75%: Soared on strong Q4 growth and favorable regulatory environment for digital payments. - **$SRPT** +33.90%: Gained on positive trial data and supportive healthcare policy developments. - **$NAVN** +30.67%: Jumped on profitability milestones and AI-driven margin gains, aligned with administration’s tech innovation priorities. ### Today's Policy Losers - **$CTSO** -10.88%: Fell sharply after disappointing earnings and regulatory scrutiny. - **$GCTS** -9.30%: Declined on earnings miss amid concerns over trade and supply chain disruptions. - **$VIOT** -5.88%: Dropped on mixed earnings and regulatory headwinds. - **$ABSI** -4.32%: Weakened due to pipeline delays and cautious guidance amid healthcare policy shifts. - **$WOR** -4.57%: Declined on earnings miss and sensitivity to rising inflation and energy costs. ## Trade & Tariff Update No new tariff or trade policy announcements were made today. However, stocks sensitive to import/export dynamics, such as **$BZUN**, showed strength on easing trade tensions and positive earnings. The absence of new tariff measures contributed to a more stable trade outlook, supporting risk appetite in related sectors. ## Tomorrow's Policy Calendar - Congressional committee votes expected on defense appropriations amid ongoing budget debates. - Scheduled speeches by administration officials on energy policy and inflation mitigation. - Pending executive order on infrastructure spending to be announced. - Regulatory decision anticipated on drug pricing reforms impacting healthcare sector. - Key risk factors include potential escalation in Middle East conflict and legislative gridlock on fiscal measures.