NEW YORK, March 19, 2026, 13:05 EDT
Dow Jones Industrial Average slid 427.99 points, or 0.92%, to 45,797.70 by 11:36 a.m. ET Thursday, as rising crude and a hawkish Fed put investors on edge. The S&P 500 lost 0.77%, with the Nasdaq Composite down 0.93%. Russell 2000 briefly slipped into correction—10% off its highs. All three benchmarks traded below the 200-day moving average, a key momentum gauge. Micron dropped 4.1%; Nvidia slipped 1.2%.
The Dow’s slump deepened, with the index dropping 768.11 points, or 1.63%, to end at 46,225.15. That move accelerated after the Fed, sticking to its 3.50%-3.75% rate range on Wednesday, signaled just a single quarter-point cut for this year—falling short of what many traders had hoped for.
Oil prices surged. Brent crude spiked to $119.13 before easing, though it remained $6.02 higher at $113.40 by 1237 GMT. The gains followed Iran’s strikes on energy infrastructure in Qatar, Saudi Arabia and Kuwait—retaliation for Israel’s attack on Iran’s South Pars gas field. U.S. crude nearly hit triple digits, with a brief high of $100.02.
Equities have reverted to a familiar pattern. Right now, the 20-day correlation between the S&P 500 and both Brent and WTI crude stands at its lowest point since November 2004—meaning stocks and oil are heading in sharply different directions. On Thursday, losses were concentrated in materials and industrial sectors; miners, GE Aerospace, and Boeing all underperformed. “Just tell me where oil’s going today and I’ll tell you what the market’s going to do today,” said Art Hogan, chief market strategist at B. Riley Wealth Management. Reuters
The Fed’s not stepping in with much reassurance. Chair Jerome Powell told markets to take the central bank’s latest outlook with a “grain of salt”—uncertainty over the war, oil prices, and the potential blow to inflation and growth leave policymakers guessing. By Thursday morning, investors were basically split, putting the odds of either a rate hike or a cut by year-end at about 10% each. Reuters
Traders quickly scaled back expectations for rate cuts. By late Wednesday, fed funds futures reflected just 14 basis points of easing priced in for December—that’s barely more than a tenth of a point, and a sharp drop from forecasts of at least two quarter-point cuts back in late February. “There is a growing school of thought” that the Fed might not deliver any cuts this year, according to Jack Ablin of Cresset Capital. Reuters
Wall Street’s biggest banks are shifting in lockstep. On Thursday, Morgan Stanley bumped its call for the next Fed rate cut to September—matching Goldman Sachs and Barclays, which had already moved off June. The bank cited “a cautious Fed means delay” and flagged the risk that rate cuts could show up even later, or not happen. Reuters
The path forward remains murky. Powell pushed back on comparisons to 1970s stagflation, calling current conditions “nothing like” that era. Fresh jobless claims just dropped to 205,000—still low, so layoffs aren’t picking up yet. Samuel Tombs at Pantheon Macroeconomics argued firms are sticking with workers, likely expecting the recent price spike to fade. Oil prices turning lower and hiring holding up would relieve some of the tension behind rate-cut wagers. But if crude holds its ground, rising fuel, airfare, and freight costs could stoke inflation, putting the Dow at risk of further losses. Reuters
