Weekend Update, March 23rd, 2026

March 23, 2026

Iran War – High Anxiety, Higher Inflation

Key Takeaways Last Week

  • U.S. equities declined for a fourth straight week, with broad-based weakness across major indexes.
  • S&P 500 fell to 6,506, -7% below all-time highs and down almost -6% over the last 4 weeks. Nasdaq and small caps came under more pressure.
  • Oil traded up (WTI ~$98, Brent ~$110+) with the war in Iran and supply chain disruptions being caused by the war remain the dominant macro driver, increasing inflation concerns.
  • Interest rates rose across the board, reducing expectations for Federal Reserve interest rate cut 2026.
  • Defensive sectors outperformed, while financials, tech, and cyclicals, small caps, and technology lagged.

U.S. Stock Performance – Index and Sector Moves

US Equities.

Source: Seeking Alpha

  • Dow30 is lagging reflects economic sensitivity in financials and industrials
  • Nasdaq Composite weakened due to higher interest rates and slower growth concerns repricing
  • Small cap stocks sold off hard as higher rates cause financial conditions to tighten

US Equity Sectors.

Source: Seeking Alpha

Energy remains the strongest major sector YTD, even pre-Iran war.
Financials and banks stabilized late in the week and but remain a major laggard YTD.
The market continues to reflect a slower-growth, higher inflation concerns and a geopolitically sensitive market regime.

S&P 500 Top 5 Performers
The market struggled with certain energy and defensive stocks saw relative strength.

  • Exxon Mobil (XOM): Benefited from a surge in crude oil futures and hit a new 52-week high.
  • Chevron (CVX): Rose with energy prices, reaching a 52-week high during the week.
  • ConocoPhillips (COP): Hit a 52-week peak as oil prices climbed.
  • Verizon (VZ): rose as investors sought defensive yields.
  • Williams-Sonoma (WSM): Jumped about +7% after a strong earnings report and a 15% dividend increase.

Bottom 5 Performers

Technology stocks were the primary laggards as higher interest rates pressured growth valuations.

  • Super Micro Computer (SMCI): Shares plunged –33% following an indictment related to chip smuggling.
  • Constellation Energy (CEG): A utility in the tech-heavy Nasdaq-100, dropping –10.9% by Friday’s close.
  • Western Digital (WDC): Fell –7.52% as the semiconductor sector sold off.
  • Seagate Technology (STX): Dropped –5.38% see Western Digital comment.
  • Micron Technology (MU): Fell –4.81% after fiscal guidance failed to impress high expectation investors.

Volatility & Risk Sentiment

  • Volatility increased alongside oil spikes and much higher inflation expectations on supply chain issues caused by Iran
  • Risk appetite deteriorated throughout the week
  • Still below crisis levels but investor sentiment quickly nearing contrary bullish extremes.

Bonds & Interest Rates

  • U.S. Treasury interest rates rose last week across the curve by 12-20 BPs on energy and supply chain shock induced inflation fears.
  • The bond market went from walking away from slowing growth and sticky inflation to an all-out sprint last week.
  • Federal Reserve expectations for 2026 remain highly uncertain with fewer rate cuts quickly becoming the expectation.

Treasury Yield table.

Economic Data, Monetary Policy & Earnings

  • The U.S. Bureau of Economic Analysis revised Q4 GDP down to a 0.7% annual rate, down significantly from the initial estimate and well below expectations, signaling a weakening economy.
  • The Consumer Price Index (CPI) increased 0.3% in February and 2.4% over the last 12 months
  • The Producer Price Index (PPI) increased 0.7%, indicating persistent upward pressure in the production pipeline.
  • ISM Manufacturing New Orders fell to 55.80 points, down from 57.10 in January, Trading Economics reports.
  • Nonfarm payrolls declined by -92,000, and the Bureau of Labor Statistics (.gov) noted that the unemployment rate held at 4.4%. Real hourly earnings increased by 0.2%.

Monetary Policy / Fed

  • The Federal Open Market Committee (FOMC) maintained the federal funds rate during its March 17-18, meeting, citing sticky inflation and a steady labor market. Officials maintained a cautious stance, with projections still hinting at one potential rate cut in 2026, though rising geopolitical uncertainty in the Middle East poses risks. Fed Chair Jerome Powell set a hawkish tone and indicated that inflation is not declining as quickly as hoped, tempering expectations for rapid rate cuts.  He also stated he would stay on at the Fed as long as needed.
  • Earnings reports this week include reports from companies like GME (Gamestop) GTLB (Gitlab), CRWD (Crowdstrike), BOX (Box),CHWY (Chewy), CTAS (Cintas), PDD (PDD Holdings), and PAYX (Paychex).

Commodities, Currencies & Macro Assets

Commodities were once again the biggest stories of the week, with the Strait of Hormuz shutdown and its effects on energy and other cargo disruptions.

Bitcoin is trading around $70k+.

Commodities

Commodities table.

Currencies – DXY (Dollar Index): rallied back above 100 on a flight to safety and s short squeeze. Emerging market currencies sold off on global growth concerns.

 

OHFG Stock Talk

YTD: Inflation Up. Stocks down

FACTOR RETURNS: from Seeking Alpha

US Equity Factors.

Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.