Market Wrap 2026-03-15
Today's US Market Wrap — Key Points
- Stocks declined amid geopolitical concerns.
- Mixed US economic data; focus on Middle East conflict.
- Dollar strengthened; Yen nears intervention zone.
- Crude oil prices rose sharply on Middle East tensions.
- Key central bank meetings scheduled for the week ahead.
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MARKET SNAPSHOT
- Equities declined, Treasuries experienced a steepening yield curve, Crude oil prices increased, the Dollar strengthened, and Gold prices decreased.
RECENT EVENTS
- The headline Personal Consumption Expenditures (PCE) figure aligned with expectations, while the core PCE year-over-year figure was slightly above Wall Street expectations. GDP growth was revised downward. Durable Goods orders were weak. Job Openings and Labor Turnover Survey (JOLTS) data exceeded expectations. University of Michigan (UoM) Sentiment surpassed consensus estimates, with inflation expectations below forecasts. Canadian jobs data was poor. The Pentagon is reportedly deploying a Marine expeditionary unit to the Middle East. Former President Trump reportedly told G7 leaders in a virtual meeting on Wednesday that Iran is "about to surrender." An Indian government official stated that the oil tanker Jag Prakash moved out from the east of the Strait of Hormuz. UK GDP data for January was weaker than expected.
UPCOMING EVENTS
- Data releases include: Chinese Retail Sales and Industrial Production figures for January-February, Indian Wholesale Price Index (WPI) for February, Canadian Consumer Price Index (CPI) for February, and US Industrial and Manufacturing Production figures for February. Nvidia (NVDA) CEO Huang is scheduled to speak.
WEEK AHEAD
- Key events scheduled for the upcoming week include a meeting between US and Chinese officials, the NVDA GTC conference, and meetings of the Federal Open Market Committee (FOMC), Bank of Japan (BoJ), Bank of England (BoE), European Central Bank (ECB), Reserve Bank of Australia (RBA), and Swiss National Bank (SNB).
MARKET WRAP
Stock prices faced additional downward pressure on Friday as geopolitical factors continued to weigh on risk sentiment. Sector performance was mixed, with defensive sectors such as Utilities and Consumer Staples outperforming, along with Energy. Technology, Materials, and Communications sectors lagged. Oil prices continued to rise, with Brent crude settling above USD 100 per barrel for the second consecutive session, despite reports of Indian tankers navigating the Strait of Hormuz. In addition to geopolitical concerns, market focus was on a range of US economic data. The January PCE data was largely in line with expectations, except for the core year-over-year figure. The second estimate of Q4 GDP showed growth revised down to 0.7%, below the initial estimate of 1.4%. Durable Goods orders were disappointing, while JOLTS data offered some positive signals, although analysts noted signs of potential AI disruption. The UoM report showed a slight beat with mixed components and mixed inflation expectations. Treasury notes ultimately steepened, possibly due to profit-taking after recent flattening, as data took a backseat to geopolitical and energy price concerns. In the foreign exchange market, the Dollar continued to strengthen, with the Dollar Index (DXY) rising above 100, while the Yen approached 160 despite verbal intervention from officials overnight. Gold prices were pressured but remained above USD 5,000, while Bitcoin saw further gains.
US
PCE: - The headline PCE month-over-month figure was in line with expectations at 0.3%, slightly lower than December's 0.4%. The year-over-year figure was 2.8% (expected 2.8%, previous 2.9%). Core PCE month-over-month was 0.4% (expected and previous 0.4%), while the year-over-year figure exceeded Wall Street consensus at 3.1% (expected and previous 3.0%). Core PCE is the Federal Reserve's preferred inflation gauge. The Fed's December median projection anticipates 2026 core PCE inflation at 2.5%, with an updated figure due at the next FOMC meeting on Wednesday. Attention will be focused on these projections, although the ongoing Middle East conflict presents the potential for energy-driven inflation. Fed officials have indicated they expect any impact to be a one-off effect that will not materially affect policy decisions at this stage. Recent inflation metrics showed January US CPI in line with expectations for core but slightly cooler for the headline, while January PPI was much hotter than forecast. The February CPI was largely in line with expectations but had hot implications for the February PCE. The Federal Reserve Committee remains divided, albeit unevenly, between labor market and inflation risks. Governor Waller is among those more focused on the labor market, and this data is unlikely to significantly alter his view. However, the hawks are concerned about elevated inflation. Personal income month-over-month rose 0.4% (expected 0.4%, previous 0.3%), while personal spending increased 0.4% (expected 0.3%, previous 0.4%).
GDP (2ND Est.): - The second estimate of Q4 2025 GDP was revised downward to 0.7% growth, from the initially reported 1.4%, and down from 4.4% at the end of Q3. Real Consumer Spending rose 2%, below the 2.4% forecast and preliminary figure. Headline PCE was 2.9%, accelerating from Q3's 2.8%, but unchanged from the preliminary figure, while the core rose to 3.1%, revised up from the 2.7% preliminary figure and above the 3.0% forecast. Growth was driven by increases in consumer spending and investment, partially offset by decreases in government spending and exports. Imports, which are subtracted in the GDP calculation, decreased. The downward revision to 0.7% reflected downward revisions to exports, consumer spending, government spending, and investment. Meanwhile, imports decreased less than previously estimated. Pantheon Macroeconomics is "pencilling-in a slowdown in real spending growth to 1½% in 2026, from 2.6% in 2025, but the outlook is fluid, given the volatility of energy prices."
JOLTS: - The January JOLTS figure rose to 6.946 million from the prior 6.550 million, reversing the significant drop from November to December. The vacancy rate rose to 4.2% from 4.0%. Hires rose slightly from 5.272 million to 5.294 million, but the hire rate was unchanged at 3.30%. Quits fell to 3.137 million from 3.225 million, but the quits rate was unchanged at 2.0%. In summary, Pantheon suggests demand for labor is still weak, with tentative signs of an AI impact.
MICHIGAN: - The University of Michigan Preliminary report for March was more positive than expected, as Consumer Sentiment fell less than expected to 55.5 (expected 55.0) from 56.6. Current Conditions unexpectedly rose to 57.8 (expected 55.2) from the prior 56.6. Consumer Expectations fell to 54.1, below the expected 54.7 (previous 56.6). Inflation expectations both came in beneath forecasts, with the 1-year expectation at 3.4% (expected 3.9%, previous 3.4%) and the 5-year expectation at 3.2% (expected 3.4%, previous 3.3%). The report notes that interviews completed before the military action in Iran showed an improvement in sentiment from last month, but lower readings seen during the nine days thereafter completely erased those initial gains, as gasoline prices have exerted the most immediate impact felt by consumers. About half of the interviews were completed after the start of the US military conflict in Iran. Oxford Economics expects consumer sentiment to continue to deteriorate as the war persists. Nonetheless, the firm expects consumption to continue to grow at a solid pace of 2.4% in 2026 despite sentiment around historical lows.
DURABLE GOODS: - Durable Goods orders disappointed in January, with the headline figure at 0%, below the expected 0.8%, although an improvement from December's -1.4%. Excluding transportation, orders rose 0.4% (expected 0.5%, previous 0.9%), with ex-defense at 0.5%, improving from -2.5% month-over-month. Oxford Economics notes that the more important detail was that core orders, which offer a better signal of future business spending, were virtually unchanged after months of solid growth. OxEco concludes that, though the flat reading for core orders throws some cold water on their expectations for strong equipment investment this year, its shipments that count toward GDP, were relatively stronger.
FIXED INCOME
T-NOTE FUTURES (M6) SETTLED UNCHANGED AT 111-13
- Treasury notes unwound some of the recent flattening into the weekend. At settlement, the 2-year yield was -0.3 basis points at 3.736%, the 3-year yield was -0.4 basis points at 3.753%, the 5-year yield was +0.6 basis points at 3.872%, the 7-year yield was +1.6 basis points at 4.067%, the 10-year yield was +2.4 basis points at 4.285%, the 20-year yield was +3.1 basis points at 4.894%, and the 30-year yield was +2.8 basis points at 4.908%.
THE DAY: - The yield curve steepened on Friday following the recent flattening, perhaps attributed to some profit-taking into the weekend. There were several data points to watch though, with the 2nd estimate of Q4 GDP being revised down, while the US PCE numbers were largely in line with expectations, but the Core Y/Y was a touch hotter than forecasts. Durable Goods were also soft. After the data, the Atlanta Fed GDP Now estimate for Q1 was unchanged at 2.7%, but shows growth looks set to improve vs the slow pace in Q4. Meanwhile, JOLTS saw a welcome jump after the prior months drop. Nonetheless, none of the data really does much to change the Fed's thought process ahead of next week's FOMC, with a lot of focus on the impact of oil prices on data in the month's ahead and how long the Iran war lasts. Treasury notes hit peaks today of 111-24+ in wake of the initial batch of data (PCE, GDP), while low of 111-11 was hit after the stronger-than-expected JOLTS report, but T-notes had already been selling off before the data as oil prices gained. Elsewhere, regarding Fed independence, a Federal Judge blocked subpoenas in the renovation probe against Fed Chair Powell due to a lack of evidence, and evidence suggesting it is a plot to remove Powell from office and to lower interest rates. Senator Tillis called for the rulings not to be appealed, as it will only delay the nomination of Fed Chair Nominee Warsh.
SUPPLY
Notes: - The US will sell USD 13 billion of 20-year bonds on March 17th and USD 19 billion of 10-year Treasury Inflation-Protected Securities (TIPS) on March 19th; all to settle March 31st.
Bills: - The US will sell USD 89 billion of 13-week bills and USD 77 billion of 26-week bills on March 16th, and USD 86 billion of 6-week bills and USD 50 billion of 52-week bills on March 17th; all to settle March 19th.
STIRS/OPERATIONS: - Fed Rate Cut Pricing: March 0 basis points (previous 0 basis points), April 0 basis points (previous 0 basis points), June 4.4 basis points (previous 4.4 basis points), December 20.4 basis points (previous 16.5 basis points).
- The New York Fed Reverse Repurchase (RRP) operation demand was at 0.14 billion (previous 0.55 billion) across 4 counterparties (previous 4) on March 12th.
- The Secured Overnight Financing Rate (SOFR) was at 3.65% (previous 3.64%), with volumes at USD 3.112 trillion (previous USD 3.175 trillion) on March 12th.
- The Effective Federal Funds Rate (EFFR) was at 3.64% (previous 3.64%), with volumes at USD 99 billion (previous USD 97 billion) on March 12th.
CRUDE
WTI (J6) SETTLED USD 2.98 HIGHER AT 98.71/BBL; BRENT (K6) SETTLED USD 2.68 HIGHER AT 103.14/BBL
- Crude oil prices were firmer on Friday, in what was a historic week for the space as the Middle East conflict dominates the tape. Highlighting the huge volatility this week, WTI traded between USD 76.73-119.48bbl, with Brent USD 81.16-119.50/bbl, as focus largely resided around any de-escalation, which there hasn’t been, and the state of the Strait of Hormuz, which largely remains “closed”. Although, benchmarks did see some weakness after an Indian government official said oil tanker Jag Prakash moved out from the east of the Strait of Hormuz. From the US side of things, Trump on US escorts in Strait of Hormuz, remarked they would do it if needed, and going to be hitting Iran "very hard" over the next week, once again showing no signs of de-escalation. Furthermore, WSJ reported that the Pentagon is moving a marine expeditionary unit to the Middle East, which saw Polymarket increase the likelihood of US troops on the ground in Iran, and now seen as a 40% chance by the end of the month. Into the weekend participants will await any further updates, escalations/de-escalations, to reassess come the reopening of the market next week. For the record, the weekly Baker Hughes rig count saw oil up 1 to 412, natgas rise 1 to 133, leaving the total up 2 to 553.
EQUITIES
CLOSES: - S&P 500 (SPX) -0.60% at 6,633, Nasdaq 100 (NDX) -0.62% at 24,381, Dow Jones Industrial Average (DJI) -0.25% at 46,560, Russell 2000 (RUT) -0.36% at 2,480
SECTORS: - Utilities +0.94%, Consumer Staples +0.54%, Energy +0.41%, Real Estate +0.20%, Financials +0.05%, Health -0.28%, Industrials -0.39%, Consumer Discretionary -0.65%, Communication Services -0.98%, Materials -1.04%, Technology -1.29%.
EUROPEAN CLOSES: - Euro Stoxx 50 -0.54% at 5,718, DAX 40 -0.53% at 23,447, FTSE 100 -0.39% at 10,265, CAC 40 -0.91% at 7,912, FTSE MIB -0.29% at 44,327, IBEX 35 -0.43% at 17,066, PSI -0.09% at 9,144, SMI +0.02% at 12,843, AEX +0.10% at 1,002.
STOCK SPECIFICS: - Adobe (ADBE) announced CEO Shantanu Narayen will step down; net new annual recurring revenue missed estimates. - Ulta Beauty (ULTA): Top & bottom line light. - SentinelOne (S): Disappointing next Q profit guide. - Meta (META) delayed the release of its new frontier AI model, Avocado, to at least May from this month. - Nvidia (NVDA) and Samsung accelerated next-gen ferroelectric NAND development. - Nio (NIO) was upgraded at HSBC to 'Buy' from 'Hold'. - Boeing (BA) is working on repairs for 25 737 MAX aircrafts with wiring flaws; deliveries halted but impact on customers will be minor. - US Agriculture Secretary Rollins says fertilizer (NTR, CF, MOS) prices announcement is coming soon; Looking at every avenue to keep fertilizer costs down.
FX
- The Dollar strengthened against all G10 currencies, with the Australian and New Zealand Dollars lagging at the end of a volatile week. Price action this week has been dominated by the Buck, which has followed in tandem with risk amid the Middle East war, which shows no signs of abating. Whilst the Middle East remains of paramount importance and the main driver of markets, there has been a deluge of US data, albeit failed to garner much of a reaction. In summary, Q4 GDP growth and Durable Goods for January were dismal, while PCE (Jan) was mixed. Headline M/M and Y/Y was in line, as was core M/M, while Y/Y was slightly hotter than expected. Prelim UoM for March was strong, as conditions and sentiment topped, with inflation expectations falling, while JOLTS topped forecasts. Heading into next week, where there is many central bank decision, FOMC is on Wednesday with the updated SEPs, albeit with the usual caveats, especially with the potential energy-inflation due to the ongoing war.
G10s: - G10 currencies were largely impacted by risk sentiment and Dollar strength. Aside from the aforementioned news, the Pound was hit by weak UK GDP data. The Australian and New Zealand Dollars were weighed on by risk and metals weakening, ahead of the RBA meeting next week where they are expected to hike by 25bps. The Canadian Dollar was pressured by a dismal jobs report, as the unemployment rate ticked higher to 6.7% from 6.5%, whilst employment change contracted by 83.9k (exp. +10k).
Yen: - The Yen was the relative outperformer, potentially a function of traders seeing the possibility of near-term intervention/rate checks as USD/JPY sits firmly in the intervention zone, which many tout as between 159-160. Overnight, Finance Minister Katayama said that they are in closer contact with US authorities on FX, and separately commented that they are prepared to take all necessary steps on FX. Intervention seems unlikely at this moment given a couple of reasons; such as unlikely to prove to be effective given the current geopolitical environment.
In EMFX: - Banxico Deputy Governor Heath believes that the key rate should be kept steady at the next meeting, given the Middle East situation, and that the next decision should factor in the complex situation resulting from conflict in the Middle East, which boosts the risks to inflation. In LatAm, Brazil Finance Ministry left forecasts for 2026 GDP unchanged at +2.3% (prev. +2.3%), and slightly lifted 2026 inflation forecast to +3.7% (prev. +3.6%).
