S&P 500 futures are up 0.6% at approximately 6,648 as a U.S. 15-point ceasefire proposal transmitted to Iran via Pakistani intermediaries gave markets their most credible diplomatic signal yet — and knocked WTI crude nearly 9% off its recent highs.^[1][2] Small caps are outperforming, the Russell 2000 up over 1%, which is the arithmetic of lower oil: the rate-cut call comes back to life when energy inflation retreats. The setup is better than yesterday's. It is not clean.

What's driving it

The overnight story is Iran's foreign ministry confirming to CBS News that Tehran received a 15-point U.S. ceasefire proposal through Pakistan — even as Iran's public posture remains combative, with its military launching new strikes on Israel and a strike near Kuwait International Airport overnight.^[1] Trump separately announced a five-day postponement of planned U.S. strikes on Iranian power plants, citing "productive conversations." Iran's parliament speaker again called the diplomatic claims "fake news," but the mere existence of a written proposal in Iranian hands is more concrete than anything the market had priced on Monday — when Iran's categorical denial crashed the relief rally.

The oil move is doing the equity lifting. WTI falling from the low $90s to the high $80s removes roughly two months of accumulated geopolitical risk premium in a single session, and the bond market is following: the 10-year has backed off 4 basis points to 4.35%, partial relief from this week's stagflation anxiety. The situation remains four days from Trump's self-imposed strike deadline, with Iran's military operations ongoing. What the market is buying is the option on resolution, not the resolution itself.

On the calendar

Durable Goods Orders and New Home Sales (Census Bureau) are both due this morning. The Conference Board releases Consumer Confidence for March; February printed 91.2, well below the 100 threshold, and a further decline would confirm the household-sector stress showing up in credit card data. Import Price data — closely watched given tariff pass-through anxiety — rounds out the morning slate.^[10] Any reading that reinforces the stagflationary input-cost picture from yesterday's PMI data will test whether this rally has legs into the afternoon.

Paychex (PAYX) reports Q3 fiscal 2026 before the bell, with a conference call at 9:30 a.m. ET.

Movers

ARM Holdings is up 12–13% pre-market after unveiling its first-ever in-house AI chip — the AGI CPU — at a San Francisco event Tuesday evening.^[3][4] The chip targets data center inference with up to 136 cores, manufactured by TSMC, with Meta as anchor customer and OpenAI, Cloudflare, and SAP as initial buyers. CEO Rene Haas projected $15 billion in annual chip revenue by 2031 — roughly 3.5× the company's total FY2025 revenue. The business-model math is the story: ARM is moving from licensing (low-single-digit margin on chip economics) to manufacturing (~50% gross margins). Raymond James upgraded to Outperform; Citi called it "the most significant shift in the company's history."

Chewy (CHWY) is up 12% after reporting Q4 calendar 2025 results that came in essentially in-line on both revenue ($3.26B vs. $3.27B estimate) and EPS ($0.27 vs. $0.28 estimate) — but posted operating margin of 1.3% versus –0.3% a year ago, with EBITDA margin reaching 5% and free cash flow margin improving to 7.1% from 5.6%.^[6] No beat, just a profitability inflection investors had been waiting on.

Earnings on deck

Paychex (PAYX) — Q3 fiscal 2026: EPS $1.71 actual vs. $1.67–$1.68 estimate (beat ~$0.03); revenue in-line to slight miss depending on source. The company raised its "Interest on funds held for clients" guidance to $200–$210M and maintained FY2026 adjusted EPS growth guidance of +10–11%, with YTD already tracking at 11%. The Paycor acquisition contributed ~19 percentage points of Management Solutions growth. Pre-market: +5%, trading near $94.72.^[8]

GameStop (GME) — Q4 fiscal 2025 (reported after yesterday's close): EPS $0.49 vs. $0.37 estimate (beat); revenue $1.10B vs. $1.47B estimate (miss, –14% year-over-year). Cash and equivalents rose 32.5% year-over-year to $6.30 billion. No major acquisition announcement; company adopted Bitcoin as a treasury reserve. Pre-market reaction is muted, reflecting the revenue miss offsetting balance-sheet strength.^[5]

The setup

The session's key variable is whether the Iran ceasefire overture holds through the news cycle or gets walked back by Tehran's military, which remained active overnight. Oil below $90 is the condition that makes everything else easier — lower input costs, lower inflation, lower yields, more Fed flexibility. Oil above $95 reassembles the stagflation trade and the rate-hike probability. Consumer Confidence at 10:00 a.m. ET is the domestic wildcard: a print below 88 would mark fresh cycle lows and give the bears a data point to work with regardless of geopolitics. The clock on Trump's five-day pause started ticking Monday. Today is day two.