That is the question the market answered yesterday with a resounding yes. The Dow surged roughly 1,100 points. The S&P 500 jumped 2.91% to close at 6,528.52. The Nasdaq ripped 3.83% to 21,590.63. It was the best single day for all three indexes since May.
The catalyst: China and Pakistan published a five-point peace plan calling for an immediate ceasefire and the reopening of the Strait of Hormuz. It is the first time a major global power has laid out a specific pathway to end the war that began February 28. Beijing's involvement signals this is not just diplomatic noise.
The question is whether one proposal from two countries that are not firing the missiles can actually end this.
What matters:
The S&P 500 still closed Q1 down roughly 8% for March, its worst monthly decline since 2022. The rally recovered one day's worth of a month-long selloff.
Oil is falling hard. Brent dropped to around $99 per barrel, down from above $115 just days ago. WTI fell to around $97. March still logged a roughly 63% surge in Brent, the steepest monthly gain on record for the benchmark.
The 10-year Treasury yield is around 4.42%. Gold is holding near $4,400 per ounce. Bitcoin is around $67,000.
Futures this morning are pointing modestly higher, with S&P futures up and the Nasdaq leading.
The investment read. The peace plan checks the boxes that markets wanted to see: ceasefire language, Hormuz language, and a credible intermediary in Beijing. But three things have not changed.
First, Iran has rejected every prior framework. The Witkoff 15-point proposal was dismissed outright. Iran's stated conditions include recognition of its authority over the Strait, payment of war damages, and a halt to all fighting across every front, including allied groups. The China-Pakistan plan does not address most of those demands.
Second, the April 6 deadline is five days away. That is when Trump's pause on strikes against Iranian energy infrastructure expires. The 82nd Airborne is deploying to the region. The Pentagon posture does not match the diplomacy timeline.
Third, the physical damage to supply chains does not reverse on a headline. Shipping insurance for Gulf routes was repriced over four weeks of disruption. Tanker contracts were rerouted. Refinery input schedules were rewritten. Even if a ceasefire materialized tomorrow, the logistical unwinding takes months, not days.
The sectors that led during the war are worth watching closely here. XLE was the only major sector ETF in the green through March. Defense names like RTX, Lockheed Martin (LMT), and Northrop Grumman (NOC) held their gains through every prior diplomatic headline. If they sell off this week, the market is genuinely repricing the conflict as ending. If they hold, the money is telling you it does not believe the peace plan either.
Nike (NKE) reported after the bell yesterday and added a separate layer. Earnings beat estimates at $0.35 per share on revenue of $11.28 billion, both above consensus. But the guidance sank the stock. The company expects fourth-quarter sales to fall between 2% and 4%, with a 20% decline projected in its China market. Shares dropped roughly 9% in European trading this morning. The consumer side of the earnings picture is not participating in the relief rally.
ISM Manufacturing data lands today. The February reading came in at 52.6. A print above 50 keeps the expansion narrative alive, but the March survey period captured the worst of the oil shock. If the new orders component weakens, it will matter more than the headline number for Q2 positioning.
Worth bookmarking: The FRED 10-year Treasury tracker for the yield that is repricing everything from mortgages to equity multiples. And FactSet's Earnings Insight for tracking how Q1 estimates shift as reporting season approaches in two weeks.
