NEW YORK, March 3, 2026, 13:21 EST — Regular session
Wall Street’s major indexes slid on Tuesday, pressured by another spike in oil prices after the U.S.-Israeli conflict with Iran escalated—reviving anxiety around inflation and the direction of interest rates. The Dow Jones Industrial Average dropped 831.86 points, or 1.70%. In late morning trading, the S&P 500 and Nasdaq each slipped roughly 1.6%-1.7%. The VIX volatility index jumped to its highest level in three months. “If oil stays elevated, it could reignite inflation and push interest rates higher, and that may not be good for stock prices,” said Robert Pavlik, senior portfolio manager at Dakota Wealth. Reuters
Oil took the spotlight. Brent futures jumped $6.07, or 7.8%, to reach $83.81 a barrel as of 10:35 a.m. EST. U.S. West Texas Intermediate moved up $6, or 8.4%, to $77.23. Shipping steered clear of the Strait of Hormuz, driving freight rates higher. ING analysts warned, “A greater risk to the market would be Iran targeting additional energy infrastructure.” Reuters
Shelter was scarce in bonds—something traders recall well from the 2022 energy shock. Yields on government debt moved higher in major markets as hopes for quick rate cuts faded, with the U.S. 10-year benchmark touching about 4.10% at one stage. “Investors are basically going back to the 2022 energy-shock template,” said Rohan Khanna, head of euro rates strategy at Barclays. Reuters
Tuesday brought little in the way of fresh U.S. economic data, shifting focus to oil prices, interest rates, and remarks from central bankers. According to the New York Fed’s calendar, the next wave lands Wednesday: ADP’s private payrolls drop at 8:15 a.m. ET, and ISM’s non-manufacturing numbers follow at 10:00. Weekly jobless claims hit Thursday, with the February jobs report capping the week on Friday.
On Wednesday afternoon, policymakers are set to sift through the Federal Reserve’s Beige Book—a collection of regional economic reports gathered just before the central bank’s next meeting. The Fed convenes again March 17-18.
Traders kept an eye on a string of Fed officials making the rounds, plus a batch of earnings. Reuters’ Morning Bid column spotlighted remarks from New York Fed President John Williams, Kansas City’s Jeffrey Schmid and Minneapolis Fed’s Neel Kashkari. Best Buy, Target and CrowdStrike were also on the day’s earnings docket. The column pointed out that markets are now looking for the next Fed rate cut in September, and are betting on fewer cuts overall by year-end.
Schmid, in prepared comments ahead of his appearance in Colorado, pushed back against expectations for more rate cuts, saying services inflation hasn’t cooled enough. “I don’t think we have room to be complacent,” he said. The Fed is still holding its policy rate between 3.50% and 3.75%. Reuters
Retail and software names moved in different directions. Target jumped roughly 6%, landing at $119.93, after posting fiscal Q4 net sales of $30.5 billion and adjusted EPS of $2.44. The retailer also put out a fiscal 2026 profit target between $7.50 and $8.00 per share. MongoDB slid about 20% to $260.13 as its adjusted EPS guidance for the quarter, at $1.15 to $1.19, came in shy of the $1.21 consensus—even though it topped estimates for the most recent period.
Energy shares managed to weather the session, boosted by climbing crude prices. ConocoPhillips added roughly 1%, Occidental Petroleum ticked up, and Cheniere Energy was also up around 1%. In contrast, travel stocks struggled—American Airlines dropped 2%, Norwegian Cruise Line slipped 4%, and Carnival lost 3%.
Investors were already uneasy about inflation after Monday’s U.S. numbers, even before the latest jump in oil. According to the ISM, manufacturing PMI stuck close to 52.4 in February, but the “prices paid” index shot up to 70.5—that’s the highest level since the middle of 2022. “The surge in the prices paid index will raise some eyebrows at the Fed,” Capital Economics’ Thomas Ryan noted. Reuters
Still, oil shock worries might ease quickly if shipping lanes clear or the disruptions don’t last, relieving yields and steadying stocks. Not so rosy: a drawn-out hit to fuel prices and supply chains, slowing growth with stubborn inflation — exactly the headache central bankers dread.
Markets are watching Friday’s U.S. payrolls data for February, with investors looking for signs that the labor market might be losing some steam—potentially clearing a path for the Fed later this year. On the government’s schedule: February CPI drops March 11, and the JOLTS job openings report for January follows on March 13.
