News
March 22, 2026
Week in review and thoughts for the week of March 23, 2026
Written by Edward Meir
Markets remained frazzled last week as the conflict in the Persian Gulf entered its fourth week – with no end in sight.
The Wall Street Journal reported that Iranian attacks were running at a higher number then they were at the beginning of the war. And there was a daring strike launched over the weekend by Iran on the UK/US military base in Diego Garcia – a remote island in the Indian Ocean about 2,700 miles away from Iran. The missiles did not hit anything. But their range will surely alarm European military planners.
Meanwhile, the Strait of Hormuz remains closed, although some tankers are getting through with Iranian permission. Iran does not have much of a physical presence to block the Gulf. But the threat of drones and missiles that could be launched from deep inside Iranian territory is enough to convince most shippers to avoid passage.
Freight rates on container and tanker shipments remain elevated. Meanwhile, the Pentagon has sent three more warships and a new deployment of Marines to the region. But plans for badly needed naval escorts have yet to materialize.
Stocks and treasury yields
In terms of market action, US equities had a rough week. All three major indexes fell for a fourth-straight week, chalking up their worst percentage decline since last April’s “Liberation Day” tariff meltdown. The three indices we monitor fell by roughly 2% each. NASDAQ now stands near a 10% correction from its recent peak. The S&P 500 is off nearly 7% from its all-time high as well. Energy names stood out among the few winners last week, gaining 2.8%. But most other sectors sagged, with consumer staples and materials being the worst-performing. They were down 4.5% each.
An upward move in US treasury yields did not help sentiment. By Friday’s close, the 2-year yield was up by 16 basis points on the week at 3.89%. The 10-year climbed 10 basis points, to 4.39%. Futures markets are now projecting a 27% chance of at least one rate hike by October despite Federal Reserve Chair Jerome Powell ruling it out at his Wednesday news conference.
Oil and gas prices
In the commodity markets, WTI crude traded roughly within a $10/barrel range for the week ($92–$102/barrel) before closing at $98.09/barrel on Friday – up slightly for the period. Brent had a much bolder move because it performs better than WTI does when geopolitical tensions flare.
Nearby Brent closed at $106.41/barrel, up by $7.50/barrel on the week, even getting to a high of $112/barrel at one point. We saw a hefty $0.28/gallon and a $0.60/gallon advance in nearby gasoline and distillate futures, respectively. Prices at the pump continue to move higher, with some places in California selling gas at a whopping $8/gallon!
In contrast, things were dormant in the US natural gas market, with the complex losing about four cents on the week to finish at $3.09 basis nearby futures. However, European gas and power prices continue to push higher, contributing to firmer prices we are seeing in several other commodities.
Metals and steel
Both base and precious metals had a brutal week on account of a stronger dollar, rising interest rates, and expectations for a manufacturing slowdown. LME copper and aluminum prices each lost about 6.6% on the week. The decline in aluminum was notable because it “decoupled” from oil for the first time since the conflict started.
Zinc lost nearly 7% for the period, while tin fell by 8% and was the worst performing metal in the LME sector. Lead and nickel held up well, down by about 0.6% and 1.4%, respectively. In the US steel market, HRC prices edged slightly higher.
In the precious space, gold posted its largest weekly percentage decline in more than 14 years (-9.5%) last week. Speculative length continues to exit the market, driven out by a stronger dollar and rising US interest rates. Silver did even worse (-14% on the week) with May ending at $69.66/ounce on Friday.
There is very little one can do for the moment as far as the markets are concerned. Sentiment will be driven by headlines, and we will see wild swings depending on what they are.
It will be interesting to see what happens on Monday when investors have a chance to react to a weekend statement from President Trump saying that he was considering “winding down” US military operations. But given that passage in the Gulf remains treacherous, we don’t see a dwindling US military presence anytime soon.
Macro readings and other news from the past week
• Sales of single-family homes fell to a 3.5-year low in January, weighed down by winter weather. Sales were down nearly 18%, dropping to an annualized rate of 587,000. December sales also were revised lower to 712,000 from 745,000. At January’s sales pace, it would take nearly 10 months to clear the supply of new homes, up from eight months in December. The median new house price dropped by almost 7% to $400,500 in January from a year earlier.
• In other housing news, February pending home sales increased 1.8% (consensus: -0.8%), while the March NAHB housing market index fell to 38 from 36. Mortgage applications fell by nearly 11%, no surprise given the backup in borrowing rates.
• PPI inflation numbers for February were not reassuring. The overall rate came in at 0.7% month-over-month (consensus 0.3%) following a 0.5% increase in January. Core PPI rose by 0.5% month-over-month, following a 0.8% increase in January. On a year-over-year basis, the PPI was up 3.4%, versus 2.9% in January. The core was up by 3.9%, versus 3.6% in the month prior. The inflation numbers troubled the markets. Investors will now have to brace for March numbers, which will likely be worse.
• January factory orders rose by 0.1%, with tepid levels of business spending reflected by the 0.1% increase in new orders for non-defense capital goods (ex-aircraft). Separately, the March Philadelphia Fed Index unexpectedly shot to 18.1 (consensus 4.7).
• Chinese industrial output was up by 6.3% in January-February y/y. Meanwhile, Chinese retail sales increased by 2.8% y/y, triple the growth seen in December. (China combines January and February data to smooth out distortions from the new year holidays.) Fixed-asset investment expanded by 1.8% and remained anemic. There was still no improvement in China’s beleaguered housing sector. Home prices were down by 0.3% m/m and were off by 3.2% y/y. A Reuters poll projects property investment and sales are expected to fall by 10.3% and 6.5%, respectively, this year as well.
This week’s US macro readings
On Monday, we get January construction spending (delayed, expected at 0.1%, last 0.3%). Tuesday brings us a first revision to Q4 productivity (expected at 1.8%, previously 2.8%). The S&P “flash” US services and manufacturing PMIs also come out on Tuesday. Nothing major comes out on Wednesday. Thursday brings us weekly initial jobless claims along with the February US trade deficit (expected at $-54 billion). Friday brings us the March non-farm payroll number (expected to show a decline of 92,000). But the unemployment rate should remain unchanged (at 4.4%.) The ISM services index for March comes out Friday (expected at 56.1).
We wish all our readers all the best for the upcoming week!
