New York, March 20, 2026, 16:13 EDT
Stocks tumbled Friday, with the S&P 500 closing down 1.49% after the Iran turmoil sent oil prices to their highest finish since July 2022, feeding persistent inflation concerns. The Nasdaq slid 1.98%, while the Dow gave up 0.92%, preliminary Reuters figures showed.
This shift packs a punch as bond yields climb alongside it. Investors aren’t betting on looser policy anymore; now, the focus has swung to possible rate increases. Fed Governor Christopher Waller revealed he’d been set to support a cut this week, but then the oil shock dialed inflation fears up a notch.
Oil prices are powering the latest move. Brent closed at $112.19 a barrel, while U.S. crude finished at $98.32, following attacks on Gulf energy facilities, restricted transit in the Strait of Hormuz, and Iraq’s declaration of force majeure on foreign-run oilfields. By invoking force majeure, suppliers can legally pause deliveries if shipments are blocked; about a fifth of the world’s oil and LNG typically passes through the strait.
Technology stocks bore the brunt, with Nvidia, Microsoft, Alphabet, Meta, and Tesla all ending lower. The S&P 500 energy sector, however, advanced 0.7% and is heading for its 13th consecutive weekly gain. FedEx climbed roughly 1% following an improved outlook, often viewed as a sign of business demand.
“It continues to be all about oil and interest rates,” said Keith Lerner, chief investment officer at Truist, in a comment to Investing.com. He pointed to higher yields putting the squeeze on rate-sensitive sectors. Over at Longbow Asset Management, CEO Jake Dollarhide told Reuters the market was now coming to terms with the conflict potentially dragging on longer than first thought. Investing.com
The bounce on Thursday faded fast. Bloomberg reported a brief pause in the selloff after efforts by the U.S. and Israel to settle nerves, but by Friday, bonds tumbled again—the 10-year Treasury pressed up near 4.39%, while the 2-year hovered around 3.89%. Central banks stood pat: The Fed, Bank of England, and ECB all kept rates unchanged this week as they considered the inflation risks from the war.
There’s still one potential pressure release: Washington has talked about tapping the Strategic Petroleum Reserve, and possibly loosening restrictions on Iranian crude that’s stuck offshore. Energy Secretary Chris Wright said those stocks could land in Asian ports in as little as three or four days. Still, Ole Hansen at Saxo pushed back on the idea of any immediate shift, arguing “damage has been done to production.” Giovanni Staunovo at UBS added that crude prices are likely to keep climbing as long as traffic through Hormuz remains disrupted. Reuters
The downturn hasn’t tipped into panic territory yet. According to Reuters, the S&P 500 sits a little more than 5% under its January high. Chris Fasciano at Commonwealth Financial Network described the recent decline as “fairly orderly,” though he cautioned that prolonged conflict would deepen concerns about U.S. growth. With few major data releases coming up stateside, markets look likely to keep tracking headlines from Iran, along with moves in oil and bond yields. Reuters
