Backchannel talks between U.S. and Iran offer Trump an off-ramp—if he wants it

• Reality check: The S&P 500 has returned, on average, 15.5% returns per year over the last 10 years, and that just isn’t sustainable, according to Rob Arnott, founder of Research Affiliates, a firm that oversees strategies for nearly $200 billion in index funds and ETFs. Prepare for measly 3% returns ahead, he tells Fortune’s Shawn Tully.

IRAN

There are backchannel talks between U.S. and Iran

The start of the deal? U.S. envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi have “reactivated” contact with each other, according to Axios. The contact seems to be limited and fitful, but the crucial line in Axios’ report is “Iran isn't interested in a temporary ceasefire that would allow the U.S. and Israel to regroup and attack again, but wants guarantees that any peace deal would be permanent.”

It’s an off-ramp, if President Trump wants it. And, given that the U.S.’s allies have roundly rebuffed Trump’s call for military help in the Gulf, he may be tempted to take it. 

Iran’s military and much of its infrastructure is now in ruins but Tehran’s resistance has confounded Trump, who has publicly stated he thinks Iran should reach a “deal” with him. The problem, according to Fortune’s Nick Lichtenberg, is that Iran is unlike previous opponents that Trump has faced. Its 21-mile-wide chokepoint at the mouth of the Persian Gulf has no CEO to bully, no bondholder to threaten, and no shareholders to absorb the loss. The mullahs are immune to his usual leverage.

Trump, however, is coming under pressure from the bond market. The supply of corporate bond sales—spurred by capex from AI builders—has flooded the market of late, pushing down prices and pushing up interest rates, making it more expensive for the U.S. to service its debt, according to Fortune’s Jason Ma. Analysts at Deutsche Bank said in a note last week that the 10-year yield climbed 6 basis points to 4.16% at session highs.

• Bank of America analyst Tom Curcuruto yesterday raised his estimate of debt issuance from the five large AI hyperscalers to $175 billion this year, up from $140 billion.
• Diesel now costs $5 a gallon in the U.S., on average.

Inconvenient: Trump has pushed back his planned meeting with China’s Xi Jinping because of the war, Fortune’s Angelica Ang reports.

Boots on the ground, maybe: Macquarie analysts Thierry Wizman and Gareth Berry noted that “U.S. amphibious forces (and, possibly, those of allies) were going to the Gulf, presumably to secure Kharg Island and Iran's oil export terminals on it.” If U.S. forces destroyed the terminals, it would stop the 90% of Iran’s crude oil that flows from that port. Alternatively, the U.S. might attempt to seize the island and preserve its capacity for a post-conflict deal, the Macquarie pair say. That would extend the length of the war: “Whereas we may have thought that major hostilities would end at the end of March (a four-week war), the deployment of US Marines means that it may take longer, perhaps by another one or two weeks.”

CUBA?!

Trump wants to ‘take’ Cuba next

Talking to reporters in the Oval Office, Trump said it would be an “honour” if the U.S. ended up “taking Cuba, in some form.” “Whether I free it, take it, I think I could do anything I want with it, if you want to know the truth. They are a very weakened nation right now,” he said. Cuba’s economy has been severely weakened after the U.S. blockaded it from its Venezuelan oil supplies.

AI

Nvidia’s Huang crowns himself ‘token king’

The 63-year-old, silver-haired Nvidia CEO didn't break a sweat as he paced the stage and spoke for a continuous two-and-a-half hours on Monday at the company's GTC developers conference, not even once bringing another exec on-stage to share the burden of presenting all the new products. At one point Huang even raised his hands above his head, fists clenched in a Rocky pose, and proclaimed himself the "token king." I don't think anyone would argue with the claim, Fortune’s Alexei Oreskovic says.

Be careful with those numbers: Huang said he expects $1 trillion in business by the end of 2027. Last year, at the conference, Huang said he expected $500 billion through 2026. The update is not the doubling of demand it may sound like: a close look at the chart Huang projected on stage showed that both the $500 billion and the $1 trillion projections had the same starting point, in 2025. In other words, Huang is really saying that he sees an additional $500 billion in new demand—not $1 trillion—this year. Still, $500 billion is nothing to sneeze at. 

• Must read: ‘The Karpathy Loop’: Former OpenAI researcher’s autonomous agents ran 700 experiments in 2 days—and gave a glimpse of where AI is heading by Fortune’s Jeremy Kahn
• Robot dogs priced at $300,000 apiece are now guarding some of the country’s biggest data centers Fortune’s Jake Angelo reports.

Chart of the Day

How the war hurt the markets

The performance of financial assets in U.S. dollars since the war began through Friday March 13th. Oil (and commodities linked to oil) went up but everything else declined. Chart via Deutsche Bank.

STARZ IN THEIR CROSSHAIRS

Byron Allen just took an aggressive stake in a video streamer

On March 4, Byron Allen's family office, Allen Family Capital, bought a 10.7% stake in Starz Entertainment Corp. Allen is now one of Starz's largest individual shareholders, and his SEC disclosure—spotted by Fortune’s Amanda Gerut—says he could pursue aggressive activist tactics like board changes, mergers, take-private deals or other corporate transactions. “With the Paramount Skydance-Warner Bros. impending nuptials in the background, Starz is one of the last premium streamers without a home out there—and Allen just nabbed it,” Gerut tells me.

Number of the Day

40

The number of basis points by which female investors beat their male counterparts, according to a research note by Joyce Chang and her team at J.P. Morgan. Nonetheless, “women currently retire with just 74% of men’s wealth, driven by the gender pay gap and caregiving-related career breaks,” she told clients.

More From Fortune

• Betting on 5-minute swings on Bitcoin price are the hot new thing on prediction markets by Carlos Garcia
• Only 6 billionaires left California over its proposed wealth tax—but they took $27 billion in potential revenue with them by Jacqueline Munis
• ‘No, we didn’t’: DOGE staffer admits Elon Musk’s cost-cutting agency failed to reduce the federal deficit by Sasha Rogelberg
• Musk says taxing every billionaire at 100% would barely make a dent in the national debt. Bernie says tax them 5% and you’re $3,000 richer by Catherina Gioino
• Ireland courts U.S. companies as taoiseach brings deals to Trump on St. Patrick’s Day by Diane Brady

Today's Front Pages

How MBS’s bet on Iran backfired - FT

Senators tell ByteDance to ‘immediately shut down’ Seedance AI video app - CNBC

Trump ramps up press pressure over Iran war coverage - Axios

How Some Ships Are Sneaking Through the Strait of Hormuz - WSJ

Blank Street Abandons Tiny Coffee Shops to Take on Starbucks - Bloomberg

‘It’s Just Crazy’: High Car Payments Make Ownership Feel Impossible - NYT

One More Thing

Exclusive: How CEOs gamed their own bonuses

Corporate boards used a range of tactics—more-conservative targets, widened performance curves, and flattened payout ranges—to protect CEO compensation from uncertainties like the chaos of President Trump’s Liberation Day tariffs in 2025, according to exclusive analysis of pay data from 50 public companies by Compensation Advisory Partners. Even among companies with the weakest payouts due to underperformance, CEOs still collected 87% of their target bonuses. And they will likely get more protection this year as CEOs beg their directors to shield their pay from the downsides of the war in Iran, Fortune’s Amanda Gerut reports.