AE Wealth Management: Weekly Market Insights | 3/8/26 – 3/14/26
Weekly Market Commentary
THE WEEK IN REVIEW: March 8-14, 2026
Conflict and oil prices drive markets downward
Epic Fury, the sustained bombing campaign of Iran by the U.S. and Israel that began on February 28, isn’t showing any signs of letting up.1 Based on everything we’re seeing, Iran’s leadership has been decapitated. Iran appointed the former Supreme Leader’s son as the new head of government, but it has yet to be determined whether he has any say in the direction of his country.2 Iran’s air and sea military capabilities have been wiped out, and its ability to launch missiles and drones is being degraded with each passing day.
What happens next? How long does this go on? It’s obvious the U.S. and Israel are unwilling to deal with the new leader. In fact, President Trump has called for the “unconditional surrender” of the Iranian regime.3 We haven’t heard talk like that since similar ultimatums were issued to Nazi Germany and Imperial Japan at the end of World War II.
The problem here is that Iran still has a sizable army and security forces that would need to be rooted out and disarmed. Many of these folks are highly incentivized to maintain the current power structure, either ideologically or financially (or both). Someone needs to drive them out, and no amount of airpower (however impressive) can match having boots on the ground.
So far, the administration has ruled out using U.S. ground troops, while the Israeli IDF is too small and is needed to defend at home.4 Unless Iranian locals rise up and drive the current regime out, it’s unlikely anything will change. The Mullahs will simply take the pounding and wait us out before going right back to what they were doing before.
The biggest challenge is that the regime in charge is sitting in a very sensitive region, as was evidenced last week when Iran rammed an explosive-laden boat into an oil tanker and hit oil-processing infrastructure in the region. Plus, Iran has begun using unmanned suicide skiffs in the Strait of Hormuz to paralyze oil shipping traffic. Oil had retreated to around $80 per barrel before the continued mayhem drove prices up again to near $100 per barrel at the end of the week.5
It doesn’t seem like an escalation of the conflict will happen, since Iran is literally alone in this fight. China and Russia aren’t helping, and their bought-and-paid-for terrorist proxies (Hezbollah and the Houthis) are visibly absent. Markets are ignoring everything except for the movement in oil prices; if oil spikes, markets drop.
The S&P 500 is down three weeks straight and has dropped 3.12% for the year, with no solution in sight.6 Right now, we will probably maintain this trend and see further declines in the weeks ahead. But, as is always the case, we will emerge from this cycle, and markets could rebound strongly once the situation settles.
Kiss those rate cuts bye-bye (for now)
The concern that elevated oil prices will filter through the economy and fuel inflation is growing. This week, we got the latest consumer price index (CPI) number, which remained at 2.4%.7 Personal consumption expenditures (PCE) declined slightly from 2.9% to 2.8%, while Core PCE ticked up from 3.0% to 3.1%.8 Personal income rose (which was a good thing) as spending remained steady.
But that was all before Epic Fury and $100-per-barrel oil. Starting next month, we suspect companies will begin using the mess in the Gulf to justify raising prices. We’ve already seen gas prices jump, and “fuel surcharges” will likely begin making the rounds soon, starting with air fares and shipping charges.
This will all lead to energy-driven inflation, just like we had a few years back. Energy is the lifeblood of our economy, and much of the decline in inflation we’ve seen since 2022 was due to the decline in energy prices. Now the conflict with Iran can force prices and inflation back up. At the very least, inflation will remain where it is.
The Federal Reserve has already signaled it feels inflation is still elevated, so given the new dynamic, the chances of lower rates anytime soon are remote. The situation in the Gulf will be all the Fed needs to justify keeping rates where they are at this week’s meeting. Couple all that with soft jobs plus the second revised reading of fourth-quarter gross domestic product (GDP) down to just 0.7% from 1.4%, and you have the makings of a stagflationary environment.9
The only bright spot was the most recent Job Openings and Labor Turnover Summary (JOLTS) reading, which showed an actual increase in openings (6.946 million versus February’s 6.542 million).10 These are treacherous times that call for patience and watchfulness. We wish there was better news, but again, this too shall pass, and we are confident things will improve once the current situation in the Gulf calms down.
Coming this week
- As we enter Week 3 of Epic Fury, the market’s dog will continue to be wagged by oil’s tail. Markets will likely rally once we start seeing an end in sight, but until then, news from the region and its impact on world oil markets will overshadow everything else.
- Monday and Tuesday data will feature the Empire State manufacturing index, industrial production, capital utilization, home builder confidence and pending home sales.
- We’ll hear from the Fed and Fed Chair Jerome Powell on Wednesday. The odds are 99.2% rates will remain the same.11 Powell really can’t help the markets at this time, but if he strikes an over-hawkish tone and opens the door for a rate increase at the next meeting due to a potential rise in inflation, he will make things worse.
- Wednesday will also feature producer price index (PPI) numbers for February and MBA mortgage applications.
- Thursday’s data includes weekly unemployment claims, the Philadelphia Fed manufacturing survey, wholesale inventories and new home sales.
- No data will be reported on Friday.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | -1.60% | -3.12% | 20.12% | 19.82% | 10.96% |
| NASDAQ | -1.26% | -4.89% | 27.75% | 25.48% | 10.66% |
| DJIA | -1.99% | -3.13% | 14.08% | 13.53% | 7.27% |
Interest Rates: | |||||
| 3/13/2026 | 3/6/2026 | ||||
| UST 10 YR Government Bond Yield | 4.28% | 4.14% | |||
| Germany 10 YR | 2.98% | 2.86% | |||
| Japan 10 YR | 2.25% | 2.17% | |||
| 30 YR Mortgage | 6.22% | 6.11% | |||
| Oil | $98.71/ppb | $90.90/ppb | |||
| Regular Gas | $3.70/ppg | $3.45/ppg | |||
| All data as of March 6, 2026. | |||||
Sources:
1 U.S. Central Command. Feb. 28, 2026. “U.S. Forces Launch Operation Epic Fury.” https://www.centcom.mil/MEDIA/PRESS-RELEASES/Press-Release-View/Article/4418396/us-forces-launch-operation-epic-fury/. Accessed March 15, 2026.
2 Farnaz Fassihi and Ronen Bergman. The New York Times. March 11, 2026. “New Iranian Leader Was Wounded Early in the War, Iranian and Israeli Officials Say.” https://www.nytimes.com/2026/03/11/world/middleeast/khamenei-iran-leader-injured.html. Accessed March 15, 2026.
3 Dan Mangan. CNBC. March 6, 2026. “Trump says no deal with Iran to end war without ‘unconditional surrender.’” https://www.cnbc.com/2026/03/06/trump-iran-oil-surrender.html. Accessed March 15, 2026.
4 Jason Rosenbaum. St. Louis Public Radio. March 12, 2026. “Hawley doesn’t see Trump asking for U.S. ground troops to enter war against Iran.” https://www.stlpr.org/government-politics-issues/2026-03-12/hawley-doesnt-see-trump-asking-for-u-s-ground-troops-to-enter-war-against-iran. Accessed March 15, 2026.
5 Business Insider. “Oil (WTI).” https://markets.businessinsider.com/commodities/oil-price?type=wti. Accessed March 15, 2026.
6 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed March 15, 2026.
7 U.S. Bureau of Labor Statistics. March 11, 2026. “Consumer Price Index Summary.” https://www.bls.gov/news.release/cpi.nr0.htm. Accessed March 15, 2026.
8 Bureau of Economic Analysis. March 13, 2026. “Personal Income and Outlays, January 2026.” https://www.bea.gov/news/2026/personal-income-and-outlays-january-2026. Accessed March 15, 2026.
9 Bureau of Economic Analysis. March 13, 2026. “GDP (Second Estimate), 4th Quarter and Year 2025.” https://www.bea.gov/news/2026/gdp-second-estimate-4th-quarter-and-year-2025. Accessed March 15, 2026.
10 U.S. Bureau of Labor Statistics. March 13, 2026. “Job Openings and Labor Turnover Summary.” https://www.bls.gov/news.release/jolts.nr0.htm. Accessed March 15, 2026.
11 CME Group. “FedWatch.” https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html. Accessed March 15, 2026.
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