By Teresa Rivas
Another day, another twist in the Iran war: Stocks are rallying, as they did Monday, in hopes that the conflict is nearing an end -- a reversal from Tuesday's decline, which due, in part, to ongoing airstrikes that show the peace process is at best a work in progress. That back and forth may have investors feeling uneasy, but they don't have to wait on the sidelines entirely until the hostilities end.
A 15-point U.S. plan is the catalyst for today's market rally: The document largely reiterates previous demands, which include Iran dismantling its nuclear infrastructure and reopening the Strait of Hormuz. Some bulls see it as TACO Tuesday arriving a day late.
Yet Iran dismissed the move, highlighting how the sides are far from seeing eye to eye.
"Amidst the rhetoric it's unclear how receptive Iran is to negotiating at this early stage, with one spokesman for Iran's military saying that the U.S. was 'negotiating with itself,'" notes Vertical Research Partners' Robert Stallard.
Investors are likely not getting too excited that the war's end is imminent. Nonetheless, recent moves by the White House show there is an appetite to bring the conflict to a close, and the plan could mark the beginning of the end of the war.
Therefore, while any timeline "is uncertain and likely will remain volatile, putting some small amounts of money to work here [has] some merit," writes Sevens Report founder Tom Essaye.
Investors may rightfully ask where. A resumption of fears that artificial intelligence will render software obsolete was the other major component of Tuesday's stock market losses, and ongoing worries about private credit meant a general risk-averse trading environment. Moreover, investors learned last week that traditional safe havens, like gold and U.S. Treasuries, weren't so safe after all.
Nonetheless, Essaye recommends looking for sectors that fit at least one of two criteria: First, they were outperforming before the war because of fundamentals that should reassert themselves, and second, sectors that were hit hardest by the spike in oil prices, as they should get some relief as energy prices drift lower.
Those parameters point to utilities and consumer staples. The State Street Utilities Select Sector SPDR exchange-traded fund and the State Street Consumer Staples Select Sector SPDR ETF represent two of the best-performing sectors from the start of the year through Feb. 27, before the war started, Essaye notes, and Morgan Stanley highlighted them as two of the sectors most sensitive to oil. Little wonder, then, that staples have fallen more than 8% since the start of the war through last week, while utilities were down about 2%.
"Given economic uncertainties beyond the conflict, 'dipping a toe' in the markets via these two sectors makes sense to me because they were outperforming before the war and have dropped along with the market because of it," Essaye writes. "As such, they should rally once a ceasefire is secured."
He likewise argues that ETFs focused on low volatility and high-quality metrics like cash flow, which also outperformed before the war, should resume their rally after a ceasefire, particularly given ongoing AI and economic worries. The iShares MSCI USA Min Vol Factor ETF and the Pacer U.S. Cash Cows 100 ETF are his top choices.
"Bottom line, we don't know how long it will take for a lasting ceasefire to take, but when it is secured, the focus will return to a mixed economic outlook," Essaye concludes.
All the more reason to hope for peace and profits ahead.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 25, 2026 12:02 ET (16:02 GMT)
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