Markets Reprice Risk into Weekly Close 27/03/2026

HOT stories for today

Market wrap:

• US stocks fell sharply on Thursday as higher oil prices and renewed uncertainty around the Middle East conflict hit sentiment. The S&P 500 dropped 1.74% to 6,477.16, while the Nasdaq Composite slid 2.38% to 21,408.08, leaving the tech-heavy index in correction territory, more than 10% below its recent high. The Dow Jones Industrial Average lost 469 points, or 1.01%, to close at 45,960.11. Crude prices climbed, adding to pressure on equities. Brent rose 5.66% to settle at $108.01 a barrel, while West Texas Intermediate gained 4.61% to $94.48. Treasury yields also jumped, with both the two-year and 10-year notes moving higher as stocks extended losses. President Donald Trump said the rise in oil and the broader market weakness were not as severe as he had expected, adding that prices would eventually fall back.
• Earlier, he warned in a Truth Social post that Iran “better get serious soon,” saying there would be “no turning back” if talks failed. He also said Iranian negotiators were pressing the US for a deal to end the four-week war. The comments followed remarks from Iran’s foreign minister that senior officials were reviewing a US proposal to end the conflict, while maintaining that Tehran had no intention of direct talks with Washington. Regional tensions intensified further after Gulf countries condemned what they described as Iranian strikes from Iraqi territory on energy infrastructure and said they were prepared to defend themselves. Technology shares added to the weakness, with most of the Magnificent Seven lower. Even so, Wall Street remains on track for a weekly gain after Wednesday’s advance, and US stock futures moved higher early Friday after Trump extended a deadline for any attack on Iran’s energy infrastructure while negotiations continued.

Markets Eye Deflation Risk as War Drives Oil Higher

• The war in the Middle East is raising concern about a different kind of economic risk: not just inflation, but the possibility that an energy shock could ultimately tip parts of the economy toward disinflation or even deflation. That tension is showing up in the market for long-term inflation expectations. The five-year, five-year inflation swap rate, a closely watched gauge of expected average inflation five to 10 years from now, has drifted down to about 2.4% and has been falling since the US-Israeli war against Iran began on Feb. 28. The move has come even as oil prices surged, with Brent crude climbing back above $100 a barrel. At the same time, traders in fed-funds futures are pricing in a 46.5% chance of a Federal Reserve rate increase by December, reflecting concern that higher energy prices could still fuel near-term inflation. The divergence highlights a growing market view that an oil shock may prove inflationary in the short run but deflationary over time if it hits growth hard enough.
• Rising gasoline prices, which approached $4 a gallon nationally on Thursday, act as a tax on consumers, squeezing discretionary spending and raising the risk that weaker demand eventually offsets the initial inflation impulse. Some investors see that as the more troubling outcome. While inflation remains a concern, a recessionary shock accompanied by falling demand and falling prices would leave the Fed with fewer effective policy tools. In that sense, the longer the conflict drags on, the more markets appear to be bracing for an economy facing only bad choices: sticky near-term inflation, weaker growth, and a rising risk that the shock ultimately becomes disinflationary.

Stocks on the move:

• Meta Platforms (META): Shares of the social-media company fell more than 6% after Meta lost two significant child-safety cases this week. While the financial penalties are small relative to the company’s size, the rulings renewed scrutiny over Big Tech’s responsibilities around platform safety and free-speech protections.
• AppLovin (APP): Shares dropped nearly 8% after a report said softer e-commerce spending trends are weighing on the company and that new client wins in the first quarter have not been enough to offset churn. Separately, Piper Sandler said the company continues to outperform peers and that signs still point to solid e-commerce adoption.
• Best Buy (BBY): The electronics retailer rose 4% without a clear company-specific catalyst. Gordon Haskett said speculation has been building that GameStop (GME) could explore an acquisition, noting that Chief Executive Officer Ryan Cohen has indicated interest in doing a deal and that the company disclosed $700 million in collateral tied to an unspecified derivative position.
• Memory stocks (SNDK, MU, WDC, STX): Shares of memory-chip makers fell after Google introduced a new AI model that it said could reduce the memory needed to run large language models. Sandisk (SNDK) dropped 7%, while Micron Technology (MU), Western Digital (WDC) and Seagate Technology (STX) each lost more than 4%.

Watchlist: CRCL, ARM, SMCI, MSFT, APP, BBY, SNDK, MU, CCL

Key Economic Events Today:

EST time

10:00 am: USD Consumer Sentiment
10:00 am: USD Inflation Expectations
11:00 am: USD FOMC Member Barkin Speaks
11:30 am: USD FOMC Member Daly and Paulson Speaks


Earnings

BMO (Before Market Open): Carnival Corporation (CCL), Legence Corp. (LGN), TMC the metals company (TMC)





The TEFS Analyst team wishes you a successful day!