Market Wrap 2026-03-19

Market Wrap 2026-03-19

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Today's US Market Wrap — Key Points

• Stocks mostly down amid Middle East tensions, central bank rate holds.
• Oil volatile: SPR release potential, no export ban, refinery restarts.
• Treasuries flatten; central banks hold rates, hawkish signals persist.
• Dollar weakens on global central bank moves, risk-on sentiment shift.

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MARKET SNAPSHOT

• Equities: Down
• Treasuries: Flatten
• Crude: Down
• Dollar: Down
• Gold: Down

REAR VIEW

• Israeli PM says war may end sooner than expected.
• Israel suggests attack on Iran's South Pars gas field unlikely to be repeated.
• Report of Iranian missile hitting Bazan oil refinery in Haifa.
• Saudi Arabia's Yanbu port reportedly resumes oil loadings after stoppage following attacks.
• White House will not implement a crude export ban.
• Bessent indicates US could conduct another SPR release.
• US initial jobless claims fall week-over-week, while continued claims rise.
• New Home Sales drop below expectations.
• BoJ, ECB, BoE, SNB, and Riksbank all maintain rates as anticipated.
• ECB source reports some officials see possibility of rate hike at April meeting.
• Atlanta Fed GDPNow Q1 model revised downward.
• Micron (MU) earnings beat expectations, but capex outlook raises concerns.

MARKET WRAP

US stocks closed mostly lower, recovering from earlier lows following comments from Israeli PM Netanyahu, who stated Iran lacks the capacity to enrich uranium or produce ballistic missiles, fostering optimism about achieving their objectives, and suggesting the war might conclude sooner than anticipated. However, the rebound was limited as he added that the pursuit of IRGC leaders would continue as long as necessary. His remarks contributed to easing oil prices (which were already declining), while stocks and bonds rallied. Sector performance was mixed: Energy was the top performer due to sustained demand for refined products, while Materials lagged as metals were impacted by five G10 central banks (BoJ, ECB, BoE, SNB, Riksbank) following the Fed's lead on Wednesday by holding rates amid uncertainty about the economic impacts of the Middle East conflict. Gold fell to USD 4,502/oz, and silver reached USD 65.50, as global yields increased along the front end of the curve before later trimming gains. In the tech sector, Micron (MU) reported strong earnings and guidance; however, its capex outlook raised concerns about gross margins. Treasuries experienced a bid following Netanyahu's comments, but yields remained higher for the US 2-, 3-, and 5-year tenors. Before Netanyahu's remarks, crude prices were declining as markets focused on the possibility of another SPR release by the US to control prices and potential easing of sanctions on Iranian oil. Reports also indicated the White House would not implement a crude export ban (leading to a narrowing of Brent's premium to WTI), and Chevron announced the restart of its jet fuel unit at its 285k bpd El Segundo refinery, five months after a major fire disrupted operations.

US

NEW HOME SALES:

• New Home Sales decreased to 587k in January from 712k, falling short of the expected 722k.
• The seasonally adjusted estimate of new houses for sale was 476K, a 0.4% increase month-over-month.
• This represents a supply of 9.7 months at the current sales rate, a 21.3% increase month-over-month.
• The median sales price of new houses sold in January 2026 was USD 400,500, a 4.5% decrease month-over-month.
• Pantheon Macroeconomics attributes snowstorms in January as the likely main driver of the sharp decline in the headline.
• It adds that median new home prices will need a much bigger drop to attract enough demand to drain the excess inventory built up over the last three years.

CLAIMS:

• Initial Jobless Claims unexpectedly fell to 205k from 213k (expected 215k), leaving the 4-week average marginally lower at 210.75k (previous 211.5k).
• Unadjusted, initial claims declined by 16.8k to 190k.
• Seasonal factors had expected a decrease of 8,751, -4.2% week-over-week.
• Losses were most visible in California (-4,022), Missouri (-3,324), New York (-2,753), Pennsylvania (-1,689), and Virginia (-1,560).
• Kentucky saw the most notable increase, +3,310.
• Oxford Economics says the report's figures are consistent "with our view that while labour-market conditions have stabilised and layoffs appear to remain low, the US/Israel war with Iran has made the no-hire, no-fire labour market more vulnerable".
• Continuing Claims rose to 1.857mln despite expectations for an unchanged reading at 1.850mln.
• The firm thinks that, based on the recent behaviour of initial claims, continued claims are most likely to be range-bound in the weeks ahead.

FIXED INCOME

T-NOTE FUTURES (M6) SETTLED 10+ TICKS LOWER AT 111-07

T-notes flatten on hawkish central bank expectations in response to the Iran war.

• At settlement: 2-year -1.2bps at 3.767%, 3-year -1.0bps at 3.769%, 5-year -1.0bps at 3.866%, 7-year -1.2bps at 4.045%, 10-year -2.5bps at 4.240%, 20-year -4.3bps at 4.824%, 30-year -5.4bps at 4.831%.

THE DAY:

T-notes flattened, with the long end outperforming the front end. Powell leaned hawkish last night, while the BoE and ECB also leaned hawkish. The BoE voted 9-0 to keep rates on hold while also removing the language that rates are likely to be reduced further, but it did keep the optionality for erasing open if the shock proves to be short-lived. Also, Bailey tried to temper rate hike expectations in the wake of the meeting. The ECB also held rates and announced it is taking a wait-and-see approach, but sources suggested that discussions of possible ECB hikes may need to start in April, unless there is a quick resolution in the Middle East. Heading into the week, it was largely thought that global central banks would be looking through some of the energy price pressures, but after the Fed, BoE and ECB, that is clearly not the case, particularly if the war becomes prolonged. Meanwhile, oil prices remain volatile with Brent hitting USD 119/bbl once again this morning after Iran struck energy infrastructure across the Middle East, with the peaks seen after it targeted the Yanbu Port in Saudi Arabia, ultimately leading to a stoppage of oil loadings. However, crude prices pared as US updates weighed. Reports suggested the White House is not going to implement a crude export ban, which hit Brent but supported WTI on the prospects of there being more US oil available for the world. Oil prices were further weighed, and as such, T-Notes were bid amid Israeli Prime Minister Netanyahu's presser, where he said Iran has no capacity to enrich uranium or make ballistic missiles, sparking optimism that their goals are close to being achieved. Economic data saw initial jobless claims drop while continued claims rose marginally, while New Home sales were soft, but the market focus was largely on the central bank's reaction functions to the ongoing Middle East conflict.

SUPPLY

Notes

• US sold USD 19bln of 10-year TIPS on March 19th.
• US to sell USD 69bln of 2-year notes on Tuesday, March 24th, USD 70bln of 5-year notes on Wednesday, March 25th and USD 44bln of 7-year notes on Thursday, March 26th; all to settle March 31st
• To sell USD 28bln reopened 2-year FRN on March 25th; to settle March 27th.

Bills

• US to sell USD 77bln of 26-week bills and USD 89bln of 13-week bills on March 23rd; to sell USD 80bln of 6-week bills on March 24th; all to settle March 26th

Bills

STIRS/OPERATIONS

• Fed Rate Cut Pricing: April +2.8bps (prev. +2.3bps), June +1.6bps (prev. +1.1bps), July +0.0bps (prev. -3.5bps), December -7.9bps (prev. -15.4bps)
• NY Fed RRP op demand at USD 0.637bln (prev. 0.698bln) across 5 counterparties (prev. 6)
• SOFR at 3.62% (prev. 3.65%), volumes at USD 3.092tln (prev. USD 3.146tln) on March 18th
• EFFR at 3.64% (prev. 3.64%), volumes at USD 93bln (prev. USD 93bln) on March 18th

CRUDE

WTI (K6) SETTLED USD 0.09 HIGHER AT USD 95.55/BBL; BRENT (K6) SETTLED USD 1.27 HIGHER AT USD 108.65/BBL

Crude prices experienced downward pressure in afternoon trading due to several factors:

1. Treasury Secretary Bessent suggested the US could conduct another SPR release to lower prices and potentially ease sanctions on Iranian oil soon.
2. Reports indicated the White House would not implement a crude export ban.
3. Chevron restarted its jet fuel unit at its 285k bpd El Segundo refinery, five months after a major fire disrupted operations.

Meanwhile, Israeli officials stated the attack on Iran's South Pars gas field was unlikely to be repeated, a welcome prospect if realized, as Iran's response further disrupted oil markets, briefly causing Saudi Arabia's Yanbu port to halt oil loadings. Brent's premium to WTI narrowed, as more US supply is expected to remain available for trade with other countries. WTI finished with little change, within the range of 92.10-100.48, while Brent held onto gains, trading within 103.76-119.13.

In post-settlement trade, crude futures saw further downside amid remarks from Israeli Prime Minister Netanyahu, who said the war will end sooner than people think; he also said that Iran has no capacity to enrich uranium or make ballistic missiles, the US and Israel have destroyed Iran's fleet in the Caspian, and Israel is helping the US open the Strait of Hormuz. Netanyahu also confirmed that it was Israel's decision to target the South Pars field, and Trump asked Israel to hold off on such attacks in the future. On oil prices, he said they are rising, but will fall quickly.

EQUITIES

CLOSES: SPX -0.27% at 6,607, NDX -0.29% at 24,355, DJI -0.44% at 46,022, RUT +0.65% at 2,495

SECTORS:

• Materials -1.55%
• Consumer Discretionary -0.87%
• Consumer Staples -0.84%
• Industrials -0.67%
• Communication Services -0.58%
• Utilities -0.47%
• Health -0.39%
• Real Estate -0.23%
• Technology unch
• Financials +0.02%
• Energy +1.48%

EUROPEAN CLOSES: Euro Stoxx 50 -2.10% at 5,616, Dax 40 -2.84% at 22,860, FTSE 100 -2.43% at 10,055, CAC 40 -2.03% at 7,808, FTSE MIB -2.42% at 43,661, IBEX 35 -2.38% at 16,887, PSI -2.06% at 8,947, SMI -2.39% at 12,454, AEX -2.24% at 978

STOCK SPECIFICS

• Micron (MU): Concerns over peak GM from capex outweigh earnings beat.
• Alibaba (BABA): Profit and rev. missed.
• Align Technology (ALGN): Elliott Investment Management takes a significant stake.
• Rivian (RIVN): Partnered with Uber on Robotaxis; Uber to invest $1.25B in Rivian.
• Five Below (FIVE): Q metrics & guidance beat.
• Accenture (ACN): FY profit outlook missed.
• JPMorgan (JPM) and Goldman Sachs (GS) reportedly offer hedge funds a way to short private credit, according to reports.

FX

The dollar weakened amid a series of G10 central bank rate announcements, echoing the Fed's stance on Wednesday: maintaining current rates until greater clarity emerges regarding the economic impacts of the Middle East conflict. US data provided no immediate warnings, as initial claims unexpectedly fell while continued claims remained within year-to-date ranges. Global fixed income traded lower as markets reacted to the fact that most major central banks are holding steady for now, leading to significant losses in precious metals. Energy updates influenced intraday movements in the oil complex (US will not ban crude exports, may release more from SPR), but ultimately, dollar movements were driven by the increasing attractiveness of higher rates in peer currencies. Later in the afternoon, substantial market shifts followed Israeli PM Netanyahu's press conference, triggering risk-on sentiment and further weakening the USD. He stated that Iran lacks the capacity to enrich uranium or produce ballistic missiles after 20 days of war, and that the US and Israel have destroyed Iran's fleet in the Caspian. The DXY, which began the day above 100, is now trading around 99.01.

G10 FX was broadly firmer, led by JPY. The BoJ maintained rates as expected at 0.75% in an 8-1 decision (one member favored a 25bps hike). USD/JPY began to react during the press conference when Governor Ueda commented on preliminary wage data, noting that momentum at "small and medium-sized firms could be better than in past years." USD/JPY fell to as low as 157.51 from earlier highs of 159.87.

EUR/USD saw upside following the ECB announcement; the central bank kept rates on hold as expected, stating they are not pre-committing to a particular rate path, a theme reiterated by President Lagarde. The announcement was somewhat hawkish, given the significant upgrade to inflation projections, although the policy being well-positioned in the current environment was an offsetting factor. ECB source reports noted officials see the need for possible rate hike talk to start in April, but a move would be more likely in June. EUR/USD climbed back above 1.1600, eyeing the 21 DMA of 1.1650.

The BoE held rates as expected, but in a more hawkish fashion, 9-0 (exp. 7-2). The statement removed language suggesting further cuts, while retaining optionality if the shock proves short-lived.

The SNB kept its policy rate at 0.00% as expected with the update of FX language. SNB's willingness to intervene in the FX market has increased and would counter rapid and excessive appreciation.