Oil's $119 Spike & The Inflation Comeback

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It was a turbulent week in the markets as geopolitical tension took center stage. The S&P 500 closed the week down approximately 1.30%, marking three consecutive weeks of losses. The Nasdaq Composite dropped roughly 1.10%, while the Dow Jones Industrial Average fell approximately 1.99% and the Russell 2000 shed 2.03%. The story of the week was unmistakable: Middle East conflict escalation sent oil prices spiking and volatility through the roof, even as some stabilization efforts emerged by Friday.

WTI crude oil hit an intra-session high near $119/barrel on Monday, with the VIX spiking to 35.3 as risk-off sentiment gripped the market. Oil retreated to the mid-$70s and the VIX cooled to around 25.74 by week's end, but both remained elevated—signals that traders are pricing in ongoing uncertainty heading into next week. Meanwhile, Treasury yields moved higher with the 10-year at 4.28% and the 2-year at 3.73%, reflecting inflation concerns and Fed hold expectations.

Consumer sentiment deteriorated as the U.S.-Iran tensions heated up. The University of Michigan Consumer Sentiment Index came in at 55.5, signaling deteriorating confidence. Jobless claims came in better than expected at 213K (below the 215K forecast), but the broader macro backdrop remains muddied by geopolitical risk and oil volatility. The week's biggest loser was the small-cap Russell 2000, down 2.03%, while breadth indicators compressed as risk appetite faded across the board.

‎TLDR Stock Market Weekly Update - March 15, 2026

📉 Market Trends

• Geopolitical Risk Dominates: Middle East conflict drove a classic risk-off rotation—crude surged to $119/barrel and the VIX spiked to 35.3 before stabilizing. Markets are pricing in an ongoing blockade of the Strait of Hormuz and associated supply disruption risk.

• Rotation to Defensive: Small caps and equal-weight indices suffered the most as investors moved to safer areas. The Russell 2000 fell 2.03% while the Dow held up slightly better than the Nasdaq, reflecting a flight to large-cap stability.

• Breadth Deterioration: Russell 2000 breadth moved down to 49.60% from 60.64%, while Nasdaq breadth dropped to the lowest levels since 2024. This shows weak participation across the board and signals exhaustion.

• Economic Resilience Questioned: Consumer sentiment fell to 55.5 and market expectations for Fed rate cuts shifted dramatically—June cut probability fell from 56% to 23%, and April cut odds ticked up only modestly to 23%.

📊 Technical Signals

• SPY Under Pressure: Resistance remains around 680–682, with support at 675. A breakdown below 672 would open the door to 665–662. The chart is showing intermediate-term weakness and may be in danger of forming a top.

• QQQ Relative Weakness: Support holds at $585, resistance at $635. The Nasdaq has been showing more technical damage than other indices, having dropped through the 100-day simple moving average in early February and continuing to lag.

• Breadth Holding but Fragile: Approximately 68% of S&P 500 stocks remain above their 200-day simple moving average. Not great, but not falling apart either—though the trend is worsening as breadth contracts on weakness.

• VIX Elevated but Cooling: The VIX closed around 25.74 after hitting 35.3 intra-week. This level still signals caution and suggests options traders are pricing in continued volatility heading into next week.

💰 Economic Data, Rates & the Fed

• CPI Slightly Hotter: February CPI rose 0.3% MoM (2.4% YoY)—slightly warmer than January's 0.2% but still within the Fed's comfort zone. The headline number continues to stabilize, but inflation expectations remain sticky.

• Fed on Hold at March Meeting: CME FedWatch shows 92%+ probability of no change at the March 18 FOMC meeting, with rates expected to hold at 3.50–3.75%. Market has shifted rate-cut expectations further out, with June cuts now pricing at only 23% (down from 56%).

• Yields Creeping Higher: The 10-year closed at 4.28%, the 2-year at 3.73%, for a spread of 55 basis points. Longer-dated yields are rising as the market reprices inflation and geopolitical risk—the curve is steepening.

• Labor Markets Still Strong: Initial jobless claims came in at 213K (below the 215K expected), while continuing claims fell 21K to 1.850M. Job openings rose to 6.9 million with a 4.2% vacancy rate, showing the labor market remains resilient despite broader market weakness.

Sources: Charles Schwab

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📅 Coming up next week…

Economic Events:

• Mon (3/16): China Manufacturing PMI

• Tue (3/17): Retail Sales (Feb), U.S. CPI data

• Wed (3/18): FOMC Decision (2:00 PM ET), PPI (Feb), MBA Mortgage Applications

• Thu (3/19): Philadelphia Fed Index, Initial Jobless Claims, Continuing Claims

• Fri (3/20): Existing Home Sales

Notable Earnings Reports:

• Mon (3/16): DLTR

• Tue (3/17): OKLO, LULU, DOCU

• Wed (3/18): M, JBL, MU

• Thu (3/19): BABA, FDX, PL, SIG

• Fri (3/20): XPEV

Sources: Earnings Whispers, Charles Schwab

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