US equities ended the week in the red once again as the war in Iran and the subsequent wracking of the global energy economy have only escalated.
The 2026 gains have disappeared, and all three major US equity indexes are now squarely in the red on the year.
The Dow (^DJI) shed about 1.0%, or roughly 450 points, on Friday while the S&P 500 (^GSPC) lost 1.5%, putting both indexes at year-to-date losses of over 5%.
The tech-heavy Nasdaq Composite (^IXIC) lost 2% on Friday and has lost roughly 7% since Jan. 1.
Calendar highlights
In a quiet week on the economic calendar, attention is likely to focus on any clues about the state of inflation and the labor market, especially after Federal Reserve Chair Jerome Powell's more hawkish comments after Wednesday's FOMC meeting.
Friday's readings on the University of Michigan's short- and long-term inflation expectations, alongside gauges of market sentiment, will take point. Investors will also receive information on the state of the industrial economy with readings from S&P Global on Tuesday and the Kansas City Federal Reserve on Friday.
In the corporate world, earnings from Jefferies (JEF) on Wednesday and Carnival (CCL) on Friday highlight an otherwise sedate week.
Oil prices hold above $100
As of Saturday morning, the war in Iran has rolled into its fourth week, dashing hopes among Wall Street and Main Street that the conflict — and near-full stoppage of all tanker traffic through the crucial Strait of Hormuz — would be measured in days, not weeks or months.
Brent (BZ=F) was trading around $107 a barrel at 4 p.m. ET on Friday, up 3% on the week, while US West Texas Intermediate crude (CL=F) traded at around $98.30, also up roughly 3%.
Oil prices flipped momentarily lower on Thursday as Israeli Prime Minister Benjamin Netanyahu said at a press conference that his country would help the US reopen the Strait of Hormuz, where traffic has fallen nearly to a standstill. The US and Israeli leaders also said their respective militaries would take energy infrastructure off target lists.
But soon after, prices went right back to where they were.
QatarEnergy's CEO told Reuters on Wednesday that attacks on its Ras Laffan LNG terminal — the largest such facility in the world — could take years to repair. And on Friday, President Trump told Fox News, "We can have a dialogue, but I don't want to do a ceasefire."
"'You broke it, you buy it,'" Paul Sankey, head of Sankey Research, wrote in a recent note to clients, summing up the situation simply. "This is the terrifying near-term question ... either Iran controls the Strait, or the USA controls it."
Smoke rises from the direction of an energy installation in the Gulf emirate of Fujairah on March 14, 2026. Smoke could be seen rising from the direction of a major UAE energy installation on March 14, in what appeared to be the latest strike targeting the Gulf's petroleum facilities hours after the US struck Iran's Kharg Island. (Photo by AFP via Getty Images) / ·- via Getty Images
Federal Reserve holds rates steady as predictions of coming cuts shift
But the central bank’s cautious tone is pushing Wall Street to reassess the timeline for rate cuts.
In comments to reporters on Wednesday, Chair Jerome Powell acknowledged that the oil crisis resulting from the Iran war could drive up inflation. Rising energy prices feed into headline inflation and, if they're sustained for long enough, can also feed into so-called "core" inflation through heightened goods and services pricing.
That has forced the Fed to reevaluate what was at one point seen as likely to be a gradual pivot toward rate cuts — now being reframed as a prolonged pause, or even a potential return to tightening if price pressures reaccelerate.
Looking ahead to the Fed’s next policy meeting, Powell said incoming data over the next six weeks will be "very important for how the economy looks and how the outlook evolves," but that for now, "There’s really not a lot we can do other than watch and see.”
Bond traders are now pricing in a 50% chance of a rate hike from the Fed by October, according to Bloomberg data, marking a stunning reversal from assumptions before the war began — and a striking comparison to the Fed's own "dot plot" predictions released Wednesday forecasting one cut to come this year, and one cut in 2027.
Federal Reserve Chair Jerome Powell speaks during a news conference Wednesday, March 18, 2026, in Washington. (AP Photo/Manuel Balce Ceneta) ·ASSOCIATED PRESS
AI's 'show me' phase
Lest we forget the AI trade, on Tuesday, Nvidia (NVDA) CEO Jensen Huang managed to briefly break through the geopolitical tumult, announcing at the chip designer's annual GTC event that Nvidia will book $1 trillion in revenue on its Grace Blackwell and Vera Rubin chips alone.
It wasn't enough to save Nvidia from the sell-off rippling through the tech industry. Nvidia closed the week down roughly 4.1%, while the wider tech sector (IGV) ended the five-day stretch down 1.4% to lose more than 20% on the year.
Micron (MU), too, failed to impress investors with an announcement that the company plans to expand its FY 2026 capex by $5 billion. Instead of rising on the bullish belief in AI spending that propelled shares of the "Magnificent Seven" companies through 2025, Micron lost roughly 5%.
Writing a client note on Thursday, Jefferies tech analyst Jeffrey Favuzza wrote, "This is now the 2nd [earnings report] (NVDA the other), where phenomenal [numbers] ... are being treated with a sell the news event."
In other words, big numbers increasingly don't appear to be enough to support already sky-high valuations among the biggest names in tech.
According to Bank of America credit analyst Neha Khoda, AI has officially entered its "show me" phase, where "the positive impact of AI ... is now being increasingly offset by AI's negative impact."
"We could be at an AI-led inflection point in the context of corporate fundamentals," Koda said.
Economic and earnings calendar
Monday
Economic data: Chicago Fed national activity index, February (0.18 previously); Construction spending, month-on-month, January (0.1% expected, 0.3% previously)
Economic data: ADP weekly employment change, week ended Mar. 7 (9,000 previously); Nonfarm productivity, fourth quarter final reading (+2.4% expected, +2.8% previously); S&P Global US manufacturing PMI, March preliminary reading (51.6 previously); S&P Global US services PMI, March preliminary reading (51.7 previously); S&P Global US composite PMI, March preliminary reading (51.9 previously); Richmond Fed manufacturing index, March (-10 previously); Richmond Fed business conditions, March (-10 previously)
Economic data: Initial jobless claims, week ended Mar. 21 (205,000 previously); Continuing claims, week ended Mar. 14 (1.857 million previously); Kansas City Fed manufacturing activity, March (5 previously)
Earnings calendar: Commercial Metals Company (CMC), Argan, Inc. (AGX), BRP (DOO), Pony AI (PONY), Seabridge Gold (SA), Braskem (BAK), Kodiak Sciences (KOD), Newsmax (NMAX)
Friday
Economic data: University of Michigan sentiment, March final reading (55.5 previously); U. Mich. current conditions, March final reading (57.8 previously); U. Mich. expectations, March final reading (541. previously); U. Mich. 1-year inflation, March final reading (+3.4% expected previously); U. Mich. 5-10 year inflation, March final reading (+3.2% expected previously); Kansas City Fed services activity, March (6 previously)
Earnings calendar: Carnival Corporation (CCL), Legence Corp. (LGN), Perpetua Resources Corp. (PPTA), TMC the metals company (TMC), Standard Lithium (SLI), Nano Labs (NA)
