Stocks Churn on War Jitters as Oil Keeps Rallying: Markets Wrap
(Bloomberg) — Wall Street traders parsing geopolitical headlines kept a lid on stocks and bonds, with oil jumping as a move from rich nations to deploy reserves was considered just a reprieve amid the war in Iran.
US crude topped $87 despite the International Energy Agency’s approval of its largest-ever release of emergency stockpiles. Relatively tame inflation data from before the outbreak of the conflict failed to boost risk appetite, with the S&P 500 wavering. Treasuries slid, leaving traders anticipating the Federal Reserve will cut rates only once this year.
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President Donald Trump said he didn’t believe Iran was laying mines in the Strait of Hormuz and repeated his suggestion the war would end soon. Iran has told regional intermediaries that for a ceasefire, the US must guarantee neither it nor Israel will strike the country in the future, according to officials familiar with the matter.
California Governor Gavin Newsom is aware of the potential for drone strikes in his state, after a report that the Federal Bureau of Investigation issued a warning Iran could be considering launching offensive drones against the West Coast.
Trump is preparing to invoke Cold War-era powers to pave the way for renewed oil production off the southern California coast to help ease the energy crunch. Meantime, the IEA agreed to discharge 400 million barrels from emergency oil reserves.
“Despite the prospect of releasing oil reserves, continued uncertainty translates into continued upside risk for oil prices, and that translates into a Fed that will remain cautious about cutting interest rates,” said Ellen Zentner at Morgan Stanley Wealth Management.
Underlying US inflation slowed in February from a month earlier, offering some relief from price pressures before the war with Iran. But renewed concerns from the conflict – which has boosted energy costs – risk amplifying affordability worries.
“February’s inflation numbers were heading in the right direction, but then along came the conflict in the Middle East, and now the path is changing,” said Brian Jacobsen at Annex Wealth Management.
The S&P 500 was little changed. The yield on 10-year Treasuries rose six basis points to 4.22%.
While investors are far more focused on how the conflict in Iran feeds into inflation over the months ahead, the latest data offers some reassurance that price pressures were not moving in the wrong direction before the recent energy shock, said Seema Shah at Principal Asset Management.
“The Fed has historically looked through energy‑driven price spikes,” she noted. “But with inflation having sat above target for almost five years, it may be harder to do so this time.”
Her base-case remains two rate cuts in the second half of the year, though that outlook would be at risk if energy prices remain high and the conflict drags on.
The Fed will likely resume cutting rates as soon as June, though there’s a risk the next move may be delayed by the oil-price shock caused by the war, according to Morgan Stanley’s Michael Gapen.
Data out Friday will likely paint a picture of more stubborn inflation. Economists see the Fed’s favored core personal consumption expenditures price index up 0.4% again in January. Compared with the same month last year, the median forecast calls for a 3.1% increase.
Corporate Highlights:
Oracle Corp. soared after reporting strong sales and issuing an outlook that suggests little letup in demand for AI computing. Nvidia Corp. will invest $2 billion in Nebius Group NV as part of a strategic partnership to develop and build AI data centers. Salesforce Inc. drew lukewarm demand for its $25 billion bond sale amid concerns over its debt-funded share buyback and worries about software companies’ AI exposure. JPMorgan Chase & Co. is restricting some lending to private credit funds after marking down the value of certain loans in their portfolios. A cyberattack against medical technology maker Stryker Corp. crippled its global operations, according to a person familiar with the matter and a memo seen by Bloomberg News. What Bloomberg Strategists say…
“Until commercial shipping resumes at scale, the global backdrop — from crude to equities and FX — will remain at the mercy of the boats.”
—Brendan Fagan, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 4 p.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average fell 0.6% Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.3% to $1.1573 The British pound was unchanged at $1.3418 The Japanese yen fell 0.6% to 158.95 per dollar Cryptocurrencies
Bitcoin rose 0.6% to $70,644.88 Ether rose 1.6% to $2,076.47 Bonds
The yield on 10-year Treasuries advanced six basis points to 4.22% Germany’s 10-year yield advanced 10 basis points to 2.93% Britain’s 10-year yield advanced 13 basis points to 4.69% Commodities
West Texas Intermediate crude rose 5.4% to $87.97 a barrel Spot gold fell 0.2% to $5,183.63 an ounce ©2026 Bloomberg L.P.
