Reports today from Reuters suggest that a ceasefire framework to end the Iran war has been passed to both Washington D.C. and Tehran. Three stocks TSMC (TSM), American Airlines (AAL) and Agnico Eagle Mines (AEM) could benefit immediately.
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Within this it is understood that an immediate ceasefire is being planned with a more comprehensive agreement to follow later. Other reports suggest that a 45-day ceasefire could be in the works.
U.S. Vice President JD Vance is said to be involved in the talks along with mediators from Pakistan, although it is not clear whether opening the vital Strait of Hormuz will be part of any deal.
This all comes, however, during a volley of bellicose words from the U.S. and Iran ahead of a new Trump deadline for the Strait of Hormuz to be reopened by Tuesday evening. If not, the war could escalate further.
Let’s stay positive, however, and look at three stocks that could pop if a ceasefire is announced.
TSMC
Major semiconductor stock TSMC has been hit by the economic uncertainty as a result of the month-long conflict between the U.S. and Iran. TSM has seen its share price rocket by over 130% in the last 12 months buoyed by the growth in AI and demand for chip technology. However, it is only up by 3.5% over the last three months.
It has been hit by fears over the impact of the war on global supply chains and more pertinently that production could be hit by a lack of helium as gas facilities get blasted in the Gulf. This has tightened the supply of helium, which is a natural gas byproduct and pivotal in semiconductor manufacturing, sending prices higher.
Helium is essential in creating the right conditions for semiconductor manufacturing. That includes creating a stable vacuum environment during the lithography process, as well as cooling semiconductor materials and reducing thermal stress that could damage the integrity and quality of the chips. It is also used for leak detection in sub-5-nanometer chip fabrication. In short, advanced processors can’t be made without it.
A ceasefire, and a reopening of the Strait, would ease this worry and could see the TSM share price regain its previous upward trajectory.
American Airlines
American Airlines has seen its share price slump 30% in the last three months. Since the launch of the U.S. and Israeli attack on Iran on February 28 it has dropped from around $13 to $11.
That is down to the impact on consumer confidence that is always seen during times of war particularly people thinking about holidays overseas and destinations which wil not be unsafe for them and their families. Surging oil prices also impact on airlines because of the extra jet fuel costs. Indeed,the biggest airlines are set to spend an extra $11 billion on jet fuel this year due to spiking energy prices amid the ongoing U.S.-Israel-Iran war.
Airlines in the States are particularly vulnerable to an increase in jet fuel prices because they ceased hedging them over the past two decades. That’s huge given that fuel is the second-largest expense for air carriers after labor.
Oil prices will likely remain elevated for a period of time even if there is a ceasefire. But a cessation in hostilities and attacks on countries from the Gulf to Cyprus and Turkey will be a relief for airlines ahead of a busy summer season.
Agnico Eagle Mines
Gold miner Agnico Eagle Mines has seen its share price slump from around $251 on February 28 to $208. It has rocketed 109% over the last 12 months as the gold price has surged off the back of investors seeking a safe haven during times of economic and political uncertainty.
Despite the Iran war being one of those economic and political threats, the gold price has been battered by the conflict. That, analysts suggest, is down to higher oil prices, which increase the prospect of higher inflation and the need for higher interest rates to tackle it. Gold prices tend to do better in lower interest rate environments.
A ceasefire could see oil prices, over time, fall helping the gold price. A lower oil price could stimulate more economic activity, which will be good for gold and metal miners.