NEW YORK, March 18, 2026, 1:24 PM EDT
Stocks slipped on Wednesday, pressured by an unexpectedly strong producer inflation number that hit ahead of the Fed’s policy decision. Brent crude was closing in on $110 a barrel. Near midday, the Dow Jones Industrial Average dropped roughly 380 points, or 0.8%, while both the S&P 500 and Nasdaq Composite lost about 0.6%.
The timing stings: inflation’s unexpected jump landed while traders were already anxious about rising fuel and shipping costs out of the Middle East feeding into U.S. prices. According to Reuters, rate futures now price in the first Fed cut for April 2027—pushed back from December 2026 before the report. That’s a sharp shift, especially after Tuesday’s modest bounce.
The Producer Price Index tracks what businesses earn for their goods and services—investors look to it for a sense of upstream inflation pressure. According to the Labor Department, final-demand PPI climbed 0.7% in February over January and showed a 3.4% increase year-on-year. Services accounted for over half the monthly gain, while prices for goods jumped 1.1%.
“PPI data showed that there were lingering inflation pressures even prior to the surge in oil prices,” Angelo Kourkafas, senior global investment strategist at Edward Jones, told Reuters. Treasury yields shot up. Healthcare and consumer staples—both high-dividend sectors—each lost more than 1% as investors braced for borrowing costs to remain elevated. Reuters
Oil stayed hot. Brent jumped $5.26, or 5%, to $108.66 a barrel as of 11:05 a.m. ET, following threats from Iran against multiple Middle East energy sites. That move stoked worries of bigger supply snarls near the Strait of Hormuz—which handles roughly 20% of all global oil and LNG shipments.
The CBOE Volatility Index—Wall Street’s so-called fear gauge—jumped to 23.42, while Nasdaq losers outnumbered gainers by about 2.8 to 1. Even so, Steve Sosnick, chief market analyst for Interactive Brokers, said investors were “not reacting in as dire a manner” as some might have thought. Reuters
Tech names gave the market a lift. At 1:03 p.m. EDT, Advanced Micro Devices was up $3.28 at $199.59. Nvidia edged up 18 cents to $182.11, while Micron traded at $465.70, a gain of $4.01 heading into its earnings report. Those moves came as most stocks lagged.
The Fed could be the catalyst for the next move. BNP Paribas economists flagged what they see as a “significant, underappreciated tail risk” that policymakers might lean toward a more balanced stance between tightening and easing. KPMG’s Diane Swonk, for her part, pointed out the Fed’s dot plot — that’s the rate outlook from each member — could reveal at least a few signaling a possible hike. Reuters
Even as crude hovered close to $100, travel names managed gains Tuesday. The S&P 500 edged up 0.25% that day, though it’s still sitting about 4% shy of its record close from Jan. 27. Next up: investors are zeroed in on Chair Jerome Powell’s comments, hoping for hints on the Fed’s take regarding oil, tariffs, and signs of a weaker labor market.
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