The S&P 500 Index ($SPX) (SPY) on Wednesday fell -0.08%, the Dow Jones Industrial Average ($DOWI) (DIA) fell -0.61%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +0.03%. March E-mini S&P futures (ESH26) fell -0.15%, and March E-mini Nasdaq futures (NQH26) fell -0.07%.
Stocks were undercut by Wednesday’s +6 bp rise in the 10-year T-note yield and the +4.6% rally in WTI crude oil prices. Crude oil prices rallied despite the IEA members’ decision to release 400 million barrels from emergency oil stockpiles.
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Stocks saw downward pressure as the Iran war dragged on, with missiles hitting three vessels in the Strait of Hormuz and the Persian Gulf on Wednesday, and new missile volleys hitting Israel.
However, tech stocks received support from Oracle’s positive AI news.
The oil market took in stride Wednesday’s decision by IEA members to release 400 million barrels of oil from strategic stockpiles, much larger than the 182 million-barrel release in 2022 following Russia’s invasion of Ukraine. The release is designed to replace the oil lost due to the Strait of Hormuz shutdown and the subsequent production cuts by Persian Gulf oil producers, although it will take some time for the oil stockpiles to reach the market.
Stocks showed little net reaction to the CPI report, which was in line with market expectations. The Feb CPI rose +0.3% m/m and +2.4% y/y, while the Feb core CPI rose +0.2% m/m and +2.5% y/y. The headline CPI report of +2.4% y/y was just 0.1 point above the 5-year low posted in April 2025, while the core CPI of +2.5% y/y matched the 5-year low posted in the two previous months. Even though the CPI figures are at or near 5-year lows, they are still above the Fed’s target of +2%. Moreover, inflation pressures will worsen in the coming months due to the recent spike in oil and fuel prices caused by the war in Iran.
Stocks were undercut after JPMorgan Chase said it is restricting lending to private credit funds amid markdowns on some of its loans in the sector, hampering the sector’s attempt to weather the current crisis. The $1.8 trillion private credit sector is struggling to cope with an investor exodus driven by unattractive returns and fears of more financial difficulties among portfolio borrowers.
Q4 earnings season is nearly over, with more than 95% of the S&P 500 companies having reported earnings results. Earnings have been a positive factor for stocks, with 74% of the 492 S&P 500 companies that have reported beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth. Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.
The markets are discounting a 0% chance for a -25 bp FOMC rate cut at the next policy meeting on March 17-18.
Overseas stock markets closed mixed. The Euro Stoxx 50 is down -1.00%. China’s Shanghai Composite closed up +0.25%. Japan’s Nikkei Stock 225 closed up +1.43%, adding to Tuesday’s +2.88% recovery rally.
Interest Rates
June 10-year T-notes (ZNM6) fell -16 ticks. The 10-year T-note yield rose +6.0 bp to 4.216%, adding to Tuesday’s rise of +6 bp. T-note prices were undercut by Wednesday’s +4.6% rally in oil prices and the +3.2 bp rise in the 10-year inflation expectations rate to 2.383%. T-note prices were also undercut by supply overhang as the Treasury sold 10-year T-notes on Wednesday and will sell 30-year bonds on Thursday. The T-note market largely ignored the CPI report as stale news, given the surge in oil and fuel prices since the Iran war began.
European government bond yields rose sharply. The 10-year German bund yield rose +9.6 bp to 2.932%. The 10-year UK gilt yield rose +13.3 bp to 4.686%.
Swaps are discounting a 4% chance of a -25 bp ECB rate hike at its next policy meeting on March 19.
US Stock Movers
The Magnificent Seven technology stocks closed mixed, with Amazon.com (AMZN) falling -0.9%, but Tesla (TSLA) rising +2.1%.
Oracle (ORCL) rallied more than +9% after reporting strong results and guidance indicating strong demand for AI computing.
The Oracle news provided early support to the software and computing infrastructure sector, but most of those stocks fell back. Datadog (DDOG) rose more than +3%. However, IBM (IBM) fell -0.7%, and Microsoft (MSFT) fell -0.3%.
Chip stocks also saw some support from the Oracle news, led by gains of +4.1% in Micron Technology (MU), +3.2% in Align Technology (ALGN), and +2.6% in Intel (INTC). Nvidia (NVDA) rose +0.5%
Oil stocks saw support with the rally in oil prices. Valero Energy (VLO) rallied +6.5%, Marathon Oil (MPC) rallied +5.4%, and Occidental Petroleum (OXY) rallied +4.6%. Chevron (CVX) rose +3.0%, and Exxon (XOM) rose +2.3%.
Nike (NKE) gave up an early advance and closed down -0.7% after an upgrade from Barclays to overweight.
Campbell’s Co (CPB) fell nearly -7% after cutting its full-year earnings guidance.
UniFirst Corp (UNF) rallied more than +6% after Cintas agreed to buy the company in a deal worth $5.5 billion.
Earnings Reports(3/12/2026)
Dollar General Corp (DG), Ulta Beauty Inc (ULTA), Lennar Corp (LEN), Adobe Inc (ADBE).
On the date of publication,
Rich Asplund
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
For more information please view the Barchart Disclosure Policy
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