Signs of diplomatic dialogue have appeared in the Middle East – markets reacted positively

On Tuesday, the US stock markets ended with a powerful rally. By the end of the day, the Dow Jones Index (US30) rose by 2.49%. The S&P 500 Index (US500) increased by 2.91%. The Tech Index NASDAQ (US100) closed higher by 3.43%. Investor optimism was triggered by signals of possible diplomatic de‑escalation: Iran’s President Masoud Pezeshkian, during international contacts, confirmed Tehran’s readiness for a ceasefire. The main conditions from the Iranian side were the provision of firm international security guarantees, payment of reparations, and recognition of the country’s sovereign rights, which the market interpreted as the first real “exit” from the hot phase of the conflict. The leaders of the recovery were technology giants, the most sensitive to geopolitical risks: Nvidia shares rose by 5.6%, and Microsoft by 3.1%. Despite Tuesday’s positive close, March results remain extremely painful for investors: the S&P 500 ended the month down 5.3%, its worst result since 2022.

The Canadian dollar reached 1.395 per US dollar, updating its lowest levels since December of last year. Despite positive domestic statistics, Canada’s economy grew by 0.2% in February due to a recovery in the mining and financial sectors, but the national currency could not withstand the global dominance of the US dollar. The main factor behind the weakening of the loonie was the widespread flight of investors into safe‑haven assets amid the prolonged conflict in the Middle East. The situation is worsened by the fact that the traditional support for the Canadian dollar from high oil prices is being offset by concerns over global economic growth. Markets are pricing in a prolonged supply shock scenario, in which Canada’s benefit from expensive commodities is overshadowed by a general decline in risk appetite.

European stock markets showed growth yesterday. Germany’s DAX (DE40) rose by 0.52%, France’s CAC 40 (FR40) closed up 0.57%, Spain’s IBEX 35 (ES35) gained 0.47%, and the UK’s FTSE 100 (UK100) closed 0.48% higher.

Silver (XAG) prices showed a local rise to 73 dollars per ounce. However, this short‑term interest does not change the catastrophic monthly dynamics: silver ends March with a decline of more than 20%, the worst monthly result in the past 14 years. At the moment, the asset is trading almost 40% below its historical highs recorded at the end of January 2026. Such a sharp collapse of the industrial and precious metals is due to a radical shift in the macroeconomic landscape caused by the war in the Middle East. The blockade of the Strait of Hormuz and the subsequent energy shock (Brent oil above 115 dollars) turned inflation from a temporary factor into a long‑term threat. This forced investors to completely revise their expectations for interest rates: before the war, the market expected two Fed rate cuts in 2026, but now traders have fully ruled out such a scenario, pricing in the continuation of tight credit conditions.

WTI oil prices showed a corrective decline, falling to 100 dollars per barrel. Earlier in the session, prices reached a local peak of 107 dollars, but the market reacted to diplomatic signals from Tehran. The easing of tensions coincided with a tactical pause in US actions. President Donald Trump temporarily suspended direct strikes on Iranian territory, giving traders hope for a partial resumption of tanker traffic from GCC countries through the Strait of Hormuz. At the moment, shipping in this key chokepoint is almost paralyzed, and freight rates have reached multi‑year highs.

Asian markets traded without a unified trend yesterday. Japan’s Nikkei 225 (JP225) fell by 1.58%, China’s FTSE China A50 (CHA50) declined by 0.47%, Hong Kong’s Hang Seng (HK50) rose by 0.15%, and Australia’s ASX 200 (AU200) posted a positive result of 0.25%.

China’s manufacturing sector in March 2026 experienced a noticeable cooling of growth rates, according to the PMI business‑activity Index from RatingDog. The decline of the indicator to 50.8 (after February’s 52.1) was more pronounced than the market expected (prediction 51.6). Although the Index remains above the 50‑point threshold separating growth from stagnation, the report revealed serious structural challenges caused by global instability.