Stocks Slide as Energy Volatility and Global Tensions Persist

Stocks Slide as Energy Volatility and Global Tensions Persist

U.S. equity markets finished lower in a volatile week, as early gains faded amid geopolitical tensions, oil price volatility, persistent inflation concerns, and a somewhat hawkish interpretation of recent Federal Reserve policy signals. Global equities, as measured by the MSCI ACWI, declined 1.77% for the week, while domestic large-cap stocks, measured by the S&P 500, fell 1.87%. Emerging markets were a relative bright spot, with the MSCI Emerging Markets Index declining just 0.35%, outperforming other major asset classes.

Global Tension Persist

Escalating attacks on Middle East energy infrastructure heightened geopolitical risk and contributed to the first 5% pullback in the S&P 500 this year, underscoring investor sensitivity to energy-driven shocks. Brent crude, the European benchmark, briefly retested $120, while WTI, the U.S. benchmark, climbed toward $100. Although prices stabilized later in the week, U.S. crude remained elevated around $99 per barrel, well above the late-February low near $65, with oil now up approximately 74% year to date.

Fed Holds Amid Uncertainty

The Federal Reserve concluded its March meeting by holding the federal funds rate steady at 3.50% to 3.75% for a second consecutive meeting, with an 11–1 vote as one policymaker favored a rate cut. Updated projections showed a median expectation for one additional rate cut this year, unchanged from prior forecasts, while outlooks for both inflation and economic growth were revised higher. In his press conference, Fed Chair Jerome Powell highlighted increased economic uncertainty tied in part to geopolitical tensions in the Middle East, noting that a potential energy shock could pose risks to inflation expectations.

Producer Prices Accelerate Again

The Bureau of Labor Statistics reported that producer price inflation accelerated in February, with the index rising 0.7% month over month, up from 0.5% in January and marking the highest reading since July 2025. On a year-over-year basis, prices increased 3.4%, up from 2.9% in the prior month, with both readings coming in above consensus expectations.

Looking Ahead

Looking ahead, the economic calendar remains relatively light ahead of first-quarter earnings, with key data releases including Purchasing Managers’ Index reports, productivity and labor cost revisions, weekly jobless claims, and consumer sentiment, which should help provide a clearer read on underlying economic momentum.

As Always

I’d like to leave you with the final line we’ve used since we started these commentaries back at the very height of market volatility in March 2020. Always remember that we create financial/investment plans not for the easy times, but to prepare for the tough ones.