NZ & Global Markets Rise on Iran War Hope, Inflation Data & Oil Price Drop

Stocks Rally, Oil Prices Ease Amidst Tentative Iran De-escalation

Global stock markets surged and oil prices retreated on Wednesday, March 25, 2026, as investors reacted to signals of a potential de-escalation in the conflict with Iran. The rally, however, remains tentative, mirroring the volatility that has gripped markets since the outbreak of hostilities. The S&P 500 rose 0.8% on Wednesday, continuing a pattern of sharp reversals as news regarding the conflict shifts.

The catalyst for Wednesday’s gains was a plan delivered by the United States to Iran to pause the war, according to reports. This followed an announcement from US President Donald Trump that the United States had engaged in “productive talks” with Iran regarding a “complete and total resolution” of hostilities in the Middle East. While Iran initially denied such talks took place, leaked counter-proposals reportedly indicated some willingness to negotiate, further fueling optimism. Brent crude oil fell 4.77% to $99.51 a barrel, a significant drop from nearly $120 last week.

The market’s reaction underscores the sensitivity of global financial systems to geopolitical instability in the Middle East. The potential disruption to oil supplies, particularly through the Strait of Hormuz, has been a major concern. Trump had previously threatened to “obliterate” Iranian power plants if the Strait wasn’t reopened, a move that briefly sent oil prices soaring. His subsequent decision to postpone attacks for five days to allow for negotiations provided a crucial window for dialogue.

New Zealand’s market mirrored the rally seen in Australia, with commodity stocks leading the charge. The S&P/ASX 200 Index rose 1.76% to 8526.9 points at 6pm NZ time, aided by easing headline inflation in February, although underlying price pressures, particularly in electricity costs, remain a concern. New Zealand’s 10-Year Government Bond yield decreased 11 basis points to 4.73%, a positive sign for equity markets.

Several New Zealand blue-chip stocks experienced strong recoveries. Fisher & Paykel Healthcare increased 2.79%, Auckland International Airport rose 1.89%, Infratil gained 3.52%, and Ebos Group climbed 4.42%. Mainfreight, a2 Milk, Gentrack, Ryman Healthcare, and SkyCity also posted gains. In the energy sector, Meridian and Contact Energy both saw increases, while Mercury completed a $250 million offer for seven-year green bonds.

Dual-listed banking stocks also rebounded, with ANZ and Westpac both posting gains. However, not all stocks participated in the rally. Serko, a technology company, declined, while Eroad saw a modest increase. KMD Brands went into a trading halt as it prepared to announce a capital raise, delaying the release of its half-year financial results.

Fuel importer Channel Infrastructure highlighted its substantial storage capacity at Marsden Point, with almost 300 million litres currently in service and an additional 350 million litres available for conversion. The company is in discussions with customers regarding potential increases in diesel storage capacity to mitigate the impact of disruptions to the global fuel supply chain.

While the market’s positive response to the potential for de-escalation is encouraging, significant uncertainty remains. Investors should monitor further developments in US-Iran negotiations, as well as the broader geopolitical landscape in the Middle East. The volatility experienced in recent weeks demonstrates the fragility of market sentiment and the potential for rapid shifts in response to evolving events.