NEW YORK, March 26, 2026, 07:15 EDT
Stock futures in the U.S. dropped in early trading Thursday, with Wall Street’s earlier optimism over potential U.S.-Iran talks fading and oil surging back above the $105 mark. Dow futures slipped 0.52%, S&P 500 contracts declined by 0.59%, and Nasdaq-100 futures posted a 0.73% loss. Brent jumped 3.4% to $105.73, and U.S. crude also tacked on 3.4%, reaching $94.36, according to Reuters.
Just a day earlier, the Dow had jumped 305.43 points, with the S&P 500 advancing 0.54% and the Nasdaq up 0.77%, while crude prices slid as traders considered the possibility that Tehran could respond to Washington’s 15-point plan. Brent finished Wednesday at $102.22, down 2.2%.
The move is significant: investors have wiped out hopes for Fed rate cuts this year, a turnaround from the two cuts that were priced in before the Iran war. With the Strait of Hormuz — that critical Gulf passage for roughly 20% of global oil and LNG — still snarled, each new ceasefire story is reshaping how markets are betting on inflation, rates, and risk.
“Frayed nerves” are moving the tape, said Michael James, equity sales trader at Rosenblatt Securities. Charu Chanana, Saxo’s chief investment strategist, pointed out that the market’s “relief trade” is losing steam as investors come to grips with the damage from inflation and higher rates. Reuters
U.S. households are already feeling the effects. The Mortgage Bankers Association reported the average contract rate for a 30-year fixed mortgage jumped 13 basis points to 6.43% for the week ended March 20—the highest reading since October. Total mortgage applications slid 10.5%, with refinancing tumbling 14.6% and purchase applications down 5.4%.
According to Joel Kan, deputy chief economist at the MBA, worries about “higher for longer oil prices” are keeping Treasury yields stubbornly high. The 10-year Treasury yield now sits at 4.39%, up from 3.96% on the Friday before the strikes kicked off on Feb. 28—an uptick that’s been filtering straight into mortgage rates and broader borrowing costs. Reuters
Regular gas averaged $3.981 a gallon nationwide Thursday, AAA data show, up sharply from $2.983 just a month earlier. On Wednesday, the Trump administration moved to loosen summer-blend mandates, clearing the way for broader E15 fuel sales starting May 1. Officials hope the change trims a few cents from the pump price.
There was a clear pattern among Wednesday’s top gainers. Norwegian Cruise Line and airline stocks, both sensitive to fuel costs, climbed as crude prices pulled back. Energy shares in the S&P 500, though, trailed behind. By Thursday, some of that rotation was already looking shaky, with oil prices bouncing back.
Markets jolted by diplomacy risk tipping into something worse: sharper inflation and deeper growth fears. BlackRock’s Larry Fink flagged $150 oil as enough to spark a “global recession”. On Thursday, the OECD noted the war had wiped out what would have been a 0.3-point bump to 2026 world growth, while G20 inflation is now seen hitting 4.0%. Reuters
On Wall Street, moves in the Iran story are getting traded in real time. Equities jump on any suggestion of negotiations, while crude takes a hit; when officials deny talks, the pattern flips. Unless Hormuz shipping resumes and traders get back to pricing in rate cuts, expect that push-pull to stick around.
