Wall Street Cheers Prospect of an End to the Iran War

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0:18Alex Ossola:The S &P and the Dow had their worst quarter in nearly four years. But today, stocks rallied. We'll get into why. Plus, thousands of businesses have no idea when they'll get a refund of President Trump's tariffs. It's very clear at this point that the best case scenario is still some months before refunds do start flowing. And for some businesses, that is this existential question of whether they're able to remain open or not. And Unilever and McCormick are combining their food businesses, creating a sauces and spices grocery giant. It's Tuesday, March 31st. I'm Alex Osola for The Wall Street Journal.

0:52Alex Ossola:This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:04Hey, I'm Imani Moise, host of What's News and Markets, and I'm kicking off the show today. Stocks closed out the quarter today with a big rally, but even with that, it was still the worst quarter in nearly four years. WSJ Markets reporter Hannah Aaron-Lang joins me to break down how we got here. So Hannah, when did the mood shift in markets and why? What really dampened the mood on Wall Street was this war breaking out with Iran. This posed a huge threat to global energy markets. Investors were really concerned with the price of oil and what this was all going to mean for economic growth writ large, but also interest rates.

1:39Investors had really felt pretty good about the fact that we were going to get interest rate cuts from the Federal Reserve this year. And that kind of totally disappeared as the conflict dragged on. And then today we have hope that that conflict might come to an end soon. And investors really pounced on that. President Donald Trump told aides that he's willing to maybe end the conflict without fully reopening the Strait of Hormuz. So kind of an upbeat end on the final day of a pretty disappointing first quarter for markets. What companies were benefiting from all that turmoil? So really the only winners of the stock market have been energy stocks.

2:13So your oil and gas companies, your energy ETFs, the other beneficiaries have been domestic U.S. companies that could benefit from these issues with global commodity supply chains. So things like Dow Inc., which is a plastic maker, investors are expecting it to have more of a competitive edge against international companies thanks to the fact that the U.S. is less reliant on Middle East oil exports than competitors in Europe or in Asia. So what are going to be the key signals that investors are watching for in the days ahead? Over the course of March, so much of these broader market moves have been just based on what U.S.

2:55officials are saying, what Iranian officials are saying. The past couple of weeks, investors were really quick to jump on good news. You're seeing that in the size of the rally today. In the coming days, what's really going to matter is whether we see progress in bringing the war to an end, restoring the flow of energy exports. If not, based on the conversations I've had with sources, is that we might see this dial back relatively quickly.

3:21Alex Ossola:That was markets reporter Hannah Aaron-Lang speaking with What's News in Markets host, Imani Moise. As you heard from Hannah, markets soared today. The three indexes all had their best day since May. The Nasdaq rose 3.8 percent. The S &P jumped 2.9 percent, and the Dow climbed more than 1 ,100 points, or 2.5 percent. And Brent crude, the international oil benchmark, surged 63 percent in March, the largest ever one-month gain in percentage terms. Brent recently traded around$104 a barrel.

3:55Alex Ossola:Oracle began laying off workers today. The full scope of the layoffs isn't clear, but some employees said internal metrics suggest thousands of rolls were eliminated. Jobs were cut in the U.S. and India. Oracle declined to comment. The cloud computing and database company is investing heavily in new data centers to support AI. Turning to consumer goods, Unilever is combining its food business with McCormick to create a grocery goods giant in a cash-in-stock deal worth over$65 billion, including debt. For McCormick, a century-old brand that started in its founder's Baltimore seller, the deal represents its most ambitious expansion yet.

4:31Alex Ossola:McCormick CEO Brendan Foley said on an investor call this morning that the combined company's focus on flavor fit well with how consumers eat today. When you think about food, we strongly believe flavor is the best place to be. It is the number one purchase driver across dishes, trends, and occasions. The condiments company is expected to bring in about$20 billion a year in revenue. It includes household names like Hellman's Mayonnaise, McCormick's Red Capped Bottled Spices, and French's Yellow Mustard. And today, JPMorgan Chase announced the American Dream initiative. It means support for small businesses, homeownership, and access to health care.

5:08Alex Ossola:CEO Jamie Dimon says those are crucial for the well-being of Americans. There's not a lot of details to the plan, but we know that JPMorgan plans to add 3 million new small business customers on top of the 7 million it already has today and wants to lend them up to$80 billion over the next decade. Coming up, small businesses are in crisis as they wait for tariff refunds and how the Middle East conflict is limiting the flow of helium, a gas crucial for making computer chips and weapons. That's after the break.

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6:17Alex Ossola:Since the Supreme Court ruled that President Trump's global tariffs were illegal, companies of every size are wrestling with when and how and even if they'll get their money back. The federal government collected about$166 billion in those tariffs. A long delay in getting that money back could mean bankruptcy for some businesses. For more on what these refunds mean for businesses, I'm joined by WSJ legal affairs reporter Louise Radnovsky. Louise, what is the best case scenario for tariff refunds for these businesses? The Supreme Court ruled on February 20th that the tariffs were invalid. I think for many people, there was an expectation that the tariff refunds could start flowing immediately, days or weeks.

6:56That is not going to happen. It's very clear at this point that the best case scenario is still some months before refunds do start flowing. And for some businesses, that is this existential question of whether they're able to remain open or not.

7:08Alex Ossola:So if that's the best case, then what's the worst case? A worst case scenario might be many, many months. And for some businesses, the uncertainty is also part of the problem. They cannot really work out how to keep going if they don't know how long they would have to keep going for. There's also some anxiety about the amount of work that businesses have to do in order to claim the refund, whether or not they should be suing the government in order to get it faster, whether they'll even get the refund if they don't sue for it. The government had represented in court that it could repay the money if the courts ultimately did struck down the tariffs.

7:43And now it's proving to be quite difficult to do so, at least in a quick way.

7:47Alex Ossola:So what is the mood among some business owners that you spoke to? One of the companies we spoke to for the story, Endless Pens, is having a cash flow crisis. They paid$175 ,000 in tariffs, and they're waiting for that money to come back. And without it, they can't buy more inventory. And that is the crunch point, really, for them. They anticipate having about three or four months that they can keep going before reaching a really tough decision moment. They are one of the companies that is not suing, in part because the idea of spending thousands of dollars to get money, maybe, in time for it to be a benefit to them doesn't seem like a worthwhile proposition.

8:25Right.

8:25Alex Ossola:Let's talk about that because lots of businesses have chosen to go that route. Costco, CVS, Nintendo, and Pandora Jewelry are some of the companies that have sued for their refunds. But you're reporting that most of the 3 ,000 or so suits that have been filed with the Court of International Trade are from smaller businesses. What is the strategy there? There are 330 ,000 importers of record who paid tariffs on 53 million shipments for this total of$166 billion. The scale of this is really without precedent. Some small businesses are hearing advice that it's not worth filing a lawsuit at this point, that you risk just clogging up the court.

9:04For big businesses, the calculus was slightly different. They generally did not urgently need their tariff refund. But for some, there was a sense that they needed to be showing their shareholders or their suppliers that they were doing everything that they could in order to get it. They had to weigh that against the political calculation about the risks of suing the United States government. We saw different companies who are very similar in some ways take very different strategies here.

9:33Alex Ossola:That was WSJ legal affairs reporter Louise Rodnowski. Thanks, Louise. Thank you for having me.

9:43Alex Ossola:On Iran, Defense Secretary Pete Hegseth said the coming days of the conflict would be decisive. He also said that the number of projectiles launched by Iran in the past 24 hours are the lowest so far in the war. Speaking at his first press conference in two weeks this morning, Hegseth answered a reporter's question about what he would tell Americans who are worried about boots on the ground in Iran. Our adversary right now thinks there are 15 different ways we could come at them with boots on the ground. And guess what? There are. So if we needed to, we could execute those options on behalf of the president of the United States and this department.

10:16Or maybe we don't have to use them at all. Maybe negotiations work or maybe there's a different approach. The point is to be unpredictable in that.

10:24Alex Ossola:Hickseth said the U.S. would, quote, negotiate with bombs until Iran makes a deal. The war is cutting deeply into the global supply of helium. It's a byproduct of natural gas, and about a third of the world's supply comes from Qatar. Helium is probably best known for inflating party balloons, but it's actually essential for cooling machines like the ones that make AI chips and military drone components. Though chip makers and defense manufacturers won't immediately feel the shortage, suppliers are already telling some customers to expect supply cuts and surcharges.

10:58Alex Ossola:Turning to Cuba, a Russian tanker carrying 730 ,000 barrels of oil docked there today. President Trump's decision to allow the shipment effectively breaks a two-month blockade. A lack of oil has led to widespread fuel shortages and power outages in Cuba. But it doesn't represent a policy change. The Trump administration says it's deciding on a case-by-case basis whether to let more oil through. A federal judge in Washington, D.C. has blocked construction of President Trump's White House ballroom. He ordered that work stop unless Congress approves the$400 million project. And today, the Supreme Court decided 8-1 to revive a challenge to a Colorado law that banned conversion therapy for minors.

11:39Alex Ossola:The court says the law violates the First Amendment and should be looked at again by a lower court. Writing for the majority, Justice Neil Gorsuch stated that the law censors speech based on viewpoint. That's because it allows counseling that supports gender transition, while banning therapy that tries to help kids reject the experience of being transgender. Justice Ketanji Brown-Jackson was the lone dissent. She argues that states have broad authority to regulate licensed professionals to prevent psychological harm. More than 20 other states have similar laws. And that's what's news for this Tuesday afternoon.

12:11Alex Ossola:Today's show is produced by Alexis Green, Imani Moise, and Pierre Bien-Aimé, with supervising producer Tali Arbel. Additional sound courtesy of S &P Global Market Intelligence. And I'm Alex Osele for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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