Stocks Fall on War, Credit Worries as Oil Surges: Markets Wrap
(Bloomberg) — A renewed oil surge stoked fears the war in Iran will further crimp energy supplies and fuel inflation, spurring a slide in stocks, which were also hit by signs of distress in the $1.8 trillion private-credit market.
Brent held near $100 on shipment disruptions, with Iran’s supreme leader, Ayatollah Mojtaba Khamenei, signaling no intention of ending the Strait of Hormuz closure. The S&P 500 lost 1%. Banks sank as redemption requests from private-credit funds forced Morgan Stanley and Cliffwater LLC to cap withdrawals. Deutsche Bank AG flagged a $30 billion exposure to the sector.
Short-dated Treasury yields jumped as traders no longer fully priced in a Federal Reserve rate cut in 2026. More broadly, global bonds surrendered their 2026 gains. The dollar approached a two-month high. Gold fell.
There’s little sign the war in the Middle East is anywhere close to a de-escalation on its 13th day. Russia is providing Iran with various forms of intelligence, including satellite imagery and drone targeting tactics, in an effort to help Tehran hit back at American forces, according to people familiar with US and Western intelligence.
“The number one issue facing the markets right now is obviously the war,” said Matt Maley at Miller Tabak. “The conflict in the Middle East is not abating. This caused crude oil to spike. We also have the issue of the growing stress on the credit markets.”
The Trump administration plans to waive a century-old maritime law that requires American ships be used to transport goods between US ports as it seeks to blunt surging oil prices, Bloomberg News reported. The US Navy could start escorting tankers through the Strait of Hormuz by the end of March, Energy Secretary Chris Wright told CNBC.
Goldman Sachs Group Inc. warned that oil prices could exceed the 2008 peak if flows via Hormuz remain depressed through March. Brent rallied to a high of $147.50 that year. The Iran war is causing unprecedented turmoil in oil markets, hitting 7.5% of global supply and an even bigger swath of exports, the International Energy Agency said.
Oil prices eased from intraday highs as the AFP reported Iran said it allowed some ships to cross the Strait of Hormuz. Tehran also told the news agency it’s not laying mines in the vital waterway. But the UK said the Iranians may have started mining in the Strait.
“As long as the bottlenecks around the Strait continue, oil prices will remain elevated, raising the risk that the conflict makes its mark on the economy,” said Bespoke Investment Group strategists.
“We would continue to try and look through those near-term headlines, as we still see the conflict/closure as lasting weeks/months and not changing the forward outlook meaningfully,” said Sameer Samana at Wells Fargo Investment Institute.
If history is any guide, retreating from markets during periods of heightened volatility is unlikely the best strategy over the long term, according to Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
“But we believe holding sufficient liquidity to cover foreseeable expenses can help investors avoid forced selling in the event of a market drawdown,” she said.
Despite all the concerns about the impacts of the war, the latest economic reports haven’t been enough to drive the focus away from geopolitical issues. Still, traders are bracing for Friday’s inflation data: the Fed’s preferred price gauge.
“The risks to the data could be asymmetric,” said Kyle Rodda at Capital.com. “A benign print will be business as usual. A hot print will raise fears of rising inflation going into the inflationary impacts of an energy crisis.”
With the Fed expected to hold rates steady next week, investors will focus on any eventual changes to its outlook.
“The most hawkish outcome would be if the Fed removed its easing bias from the statement, while the median projection shifted from one cut this year to no change,” said Stephen Brown at Capital Economics.
Corporate Highlights:
Energy producers jumped while CF Industries Holdings Inc. and Mosaic Co. paced a surge in fertilizer stocks as disruptions to the Strait of Hormuz tighten supply. Airlines sank on worries about higher costs stemming from the surge in fuel prices. Blue Owl Capital Inc. defended its recent sale of $1.4 billion of loans from three of its funds, arguing the transaction contained no backstops or hidden incentives, as the asset manager remains a primary target of bets on a private-credit reckoning. Tesla Inc. received government clearance to convert its investment in Elon Musk’s xAI into a small stake in SpaceX ahead of the rocket maker’s planned IPO. Microsoft Corp. and Meta Platforms Inc. each committed nearly $50 billion in additional data center leases in their most recent quarters. Bumble Inc. unveiled a new AI-powered assistant designed to act as a personal matchmaker. Dick’s Sporting Goods Inc. forecast full-year sales growth across the company’s namesake brand stores as well as at the newly acquired Foot Locker chain. Dollar General Corp. forecast sales in-line with analyst estimates, slowing momentum for a company that had been exceeding Wall Street expectations. Some of the main moves in markets:
Stocks
The S&P 500 fell 1% as of 2:04 p.m. New York time The Nasdaq 100 fell 1.4% The Dow Jones Industrial Average fell 1.2% Currencies
The Bloomberg Dollar Spot Index rose 0.5% The euro fell 0.4% to $1.1521 The British pound fell 0.4% to $1.3354 The Japanese yen fell 0.2% to 159.33 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $70,210.85 Ether fell 0.5% to $2,058.67 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.25% Germany’s 10-year yield advanced two basis points to 2.96% Britain’s 10-year yield advanced nine basis points to 4.77% The yield on 2-year Treasuries advanced 10 basis points to 3.75% Commodities
West Texas Intermediate crude rose 7.9% to $94.12 a barrel Spot gold fell 1.3% to $5,107.57 an ounce ©2026 Bloomberg L.P.
