On March 20, 2023, the S&P 500 Index rose by 0.62%, the Dow Jones Industrial Average increased by 0.67%, and the Nasdaq 100 Index saw a 0.75% uptick as global markets reacted to a U.S. peace proposal aimed at resolving tensions with Iran. The U.S. offered a 15-point plan, including a rollback of Iran’s nuclear program and sanctions relief, leading to a more than 4% drop in WTI crude oil prices and a 3 basis point decline in the 10-year T-note yield to 4.33%.
However, despite the proposal, Iran’s media reported a rejection of the ceasefire talks, continuing missile and drone attacks against Israel and neighboring Gulf states. The ongoing conflict has disrupted about 7.5% of global oil supply, with significant damages reported to over 40 energy sites across nine countries in the Middle East. Analysts project commodity prices could escalate beyond $150 per barrel if tensions persist.
In the U.S. housing sector, mortgage applications fell by 10.5% in the week ending March 20, with the average 30-year fixed mortgage rate rising to 6.43%. The February import index excluding petroleum showed a larger than anticipated increase of 1.2%, indicating supply pressures amidst ongoing geopolitical instability.
