Quick overview

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Comments from Donald Trump were the key driver of the session, although the initial momentum faded after a denial from Iranian authorities.

U.S. equities closed higher on Monday, March 23, extending gains throughout the session as expectations of a potential de-escalation in the Middle East lifted global markets.

Wall Street rallied sharply while oil prices declined following remarks by Trump, who said the United States and Iran had held talks and that there was a “very serious chance of reaching a deal.” However, investor optimism cooled after Tehran denied the claims.

Against this backdrop, the Dow Jones Industrial Average rose 1.38% to 46,208.53, the S&P 500 gained 1.33% to 6,586.77, and the Nasdaq Composite advanced 1.38% to 21,946.76.

Genuine progress or market signal?

In a social media post, Trump said that talks over the past two days aimed at reaching a “complete and definitive solution” to hostilities had been “productive.”

“Based on the tone of these discussions,” which are set to continue throughout the week, Trump said he had ordered the Pentagon to “delay all military strikes” on Iranian power plants and energy infrastructure for five days.

“We have a very serious chance of reaching a deal. That guarantees nothing—we are in the process of trying to reach one… but again, I guarantee nothing,” he told reporters.

Asked about the objective of the talks, Trump said he does not want to “see any nuclear bomb.” However, Iranian state media reported that Tehran had not engaged in direct talks with the United States.

A spokesperson for Iran’s Foreign Ministry dismissed claims of any dialogue, stating that the country’s position on the Strait of Hormuz and the “conditions to end the war remain unchanged,” according to state outlets.

The day’s rally suggests investors are eager for any catalyst to re-enter the market, revive optimism, and move past this phase of the Trump 2.0 era.

War, the Fed, and the rate outlook

Stephen Miran said Monday that the Federal Reserve should avoid adjusting monetary policy based on short-term developments tied to the conflict involving the United States, Israel, and Iran.

“We should wait for the full picture before materially changing our outlook,” Miran said in an interview on Bloomberg Surveillance. “It’s still too early to have a clear view of what this will look like in 12 months.”

The Middle East conflict has pushed oil prices significantly higher, creating potential inflationary pressure while weighing on economic growth and the labor market.

Despite acknowledging the risk that sustained elevated oil prices could spill over into broader goods and services, Miran said his pre-war outlook of four rate cuts this year remains unchanged.