General Market News

Japan will release a record 80 million barrels of oil from its strategic reserves starting March 15, 2026, equivalent to 45 days of supply, in response to disruptions caused by a U.S.-Israeli conflict with Iran that has affected shipments through the Strait of Hormuz. The release, which reduces national reserves by 17%, is part of a coordinated 400 million barrel global release organized by the International Energy Agency to address supply shocks and price volatility.

• Japan depends on the Middle East for approximately 90% of its oil supply and maintains 254 days worth of consumption in strategic reserves, established in 1978 following the Arab oil embargo
• The release includes 15 days worth from private-sector reserves starting immediately and one month's worth from state reserves later in March, with an additional 12 million barrels potentially available from joint reserves held by Saudi Arabia, UAE, and Kuwait
• The U.S. is encouraging allies to purchase more American energy, noting Japan currently gets only 4% of its oil from the U.S. after stopping Russian purchases following the 2022 Ukraine invasion

U.S. markets face a critical week as the Federal Reserve meets to decide on interest rates amid heightened energy volatility and geopolitical tensions involving Iran. The Fed is widely expected to hold rates at 3.50%-3.75%, with investors focused on updated economic projections and policy guidance. Rising oil prices driven by Middle East conflict risks threaten to reignite inflation pressures despite recent modest progress in easing price levels.

• U.S. equities fell for a third straight week, with the Dow down 1.99%, S&P 500 down 1.60%, and Nasdaq down 1.26%, pressured by geopolitical tensions and energy market volatility.
• Oil prices surged on disruption fears through the Strait of Hormuz before easing after a coordinated 400 million barrel emergency release from strategic petroleum reserves.
• February CPI data showed headline inflation at 2.4% year-over-year and core CPI at 2.5%, but surging oil prices may renew inflation concerns; Wednesday's PPI data will provide signals on upstream price pressures.

A federal judge blocked the Justice Department from subpoenaing Federal Reserve Chair Jerome Powell in an investigation ostensibly about the Fed's renovation management. The judge ruled that a 'mountain of evidence' suggests the probe was actually pretextual, aimed at pressuring Powell to lower interest rates or resign, threatening Fed independence.

• Chief Judge James Boasberg stated the government produced 'essentially zero evidence to suspect Chair Powell of a crime' and concluded the justifications were pretextual
• Republican Senator Tom Tillis and other GOP senators opposed the investigation and Tillis vowed to vote against Trump's Fed chair nominee Kevin Warsh until Powell's case is resolved
• Powell's term as chair ends in May 2026, but his seat on the Federal Reserve Board technically runs until January 2028, leaving uncertainty about his future role

US stocks closed lower on Friday, with the S&P 500 down 0.61%, Nasdaq falling 0.93%, and Dow dropping 0.25%. Rising oil prices driven by geopolitical tensions, particularly the Iran conflict, weighed on market sentiment. A federal judge also blocked attempts to subpoena Federal Reserve Chair Jerome Powell, reinforcing central bank independence.

• Utilities led S&P 500 sector gains with a 1.4% rise, while technology and communication services both fell around 1.1%, with major tech stocks like Nvidia, AMD, and Tesla ending in the red
• A federal judge rejected Justice Department subpoenas for Fed Chair Powell, calling them politically motivated attempts to pressure the central bank ahead of next week's rate decision meeting
• Mortgage rates climbed to 6.41%, the highest level since September, tracking rising 10-year Treasury yields amid escalating Iran war tensions

The Quarterly Census of Employment and Wages, considered the 'gold standard' of jobs data, shows the U.S. economy lost jobs in the six months following the escalation of Trump tariffs on April 2, 2025. The QCEW data reveals only 123,000 jobs were added over 12 months through September 2025, 513,000 fewer than initially reported by the Bureau of Labor Statistics, pointing to significant downward revisions ahead.

• QCEW data implies payrolls contracted by 342,000 (roughly 57,000 per month) in the six months through September 2025, though final revisions may show more modest losses of around 11,000 per month after accounting for late filings
• The QCEW draws from unemployment insurance tax records covering 12 million worksites, while BLS surveys only 622,000 worksites, making it far more comprehensive and accurate
• Job losses coincided with tariff escalation last spring and continue through early 2026, with BLS data showing an additional 82,000 payroll decline in the five months since September

Bank of America strategist Michael Hartnett warns that current market conditions, including rising oil prices and private credit market stress, bear 'ominous' similarities to the period preceding the 2008 financial crisis. Oil prices have surged nearly 30% since the U.S.-Iran conflict began, while private credit funds are restricting redemptions amid quality concerns. Investors fear stagflation could force difficult Federal Reserve policy decisions at a vulnerable moment for the financial system.

• Brent crude oil has risen nearly 30% since the U.S.-Iran war began and over 60% since the start of 2026, with gas prices up 22% to $3.63/gallon after 12 consecutive days of increases
• Private credit market stress is mounting as funds restrict redemptions following bankruptcies that raised concerns about underwriting standards, while AI-related pressures weigh on data center assets
• Investors have scaled back Fed rate cut expectations from two cuts to at most one in 2026, as rising energy prices threaten stagflation and complicate monetary policy decisions

A judge has blocked subpoenas related to a criminal investigation into Federal Reserve Chair Jerome Powell. U.S. Attorney for the District of Columbia Jeanine Pirro was scheduled to provide an update on Friday regarding the ongoing criminal probe of the Fed Chair.

• Jeanine Pirro, the top federal prosecutor in Washington, D.C., is leading the criminal investigation into Powell
• The judge's decision to block subpoenas represents a significant procedural setback in the probe
• This is a developing breaking news story with limited details currently available

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Dividend-paying stocks are narrowing the earnings growth gap with technology stocks, offering investors income and stability amid geopolitical uncertainty. The S&P 500 Dividend Aristocrats Index rebounded from -5.5% earnings growth in Q1 2025 to +9% by Q4, while Nasdaq 100 earnings growth declined from over 35% to under 15% in the same period. This shift comes as tech companies face pressure from heavy AI investments while dividend-payers demonstrate strong operating performance and improving margins.

• Dividend Aristocrats (companies with 25+ years of consecutive dividend increases) are now approaching earnings growth parity with tech stocks, helping stabilize overall S&P 500 fundamentals as mega-cap tech contribution declines
• The rotation toward quality dividend stocks began before recent Middle East conflicts but gains relevance as investors seek lower-volatility options during geopolitical uncertainty and an unprecedented tariff environment
• Tech sector faces headwinds from elevated valuations and heavy AI capital expenditures stressing balance sheets, while dividend-payers in financials, healthcare, and industrials continue increasing payouts while strengthening their balance sheets

The Federal Reserve's preferred inflation measure, the PCE index, rose 2.8% year-over-year in January, with core inflation climbing to 3.1%, the highest in nearly two years. Monthly core prices jumped 0.4% for the second consecutive month, a pace that would exceed the Fed's 2% annual target if sustained. The data precedes additional inflationary pressure expected from the Iran conflict that began Feb. 28, which has caused oil prices to surge over 40%.

• Core PCE inflation accelerated to 3.1% annually in January, up from 3.0% in December, with monthly increases of 0.4% suggesting inflation remained sticky before geopolitical disruptions
• The Iran war that began Feb. 28 has shut down the Strait of Hormuz, cutting one-fifth of global oil supply and driving gas prices to $3.60 per gallon from under $3, likely to spike inflation further in March and April
• Consumer spending rose a solid 0.4% in January while incomes also increased 0.4%, with after-tax incomes jumping 0.9% due to Social Security cost-of-living adjustments, indicating consumers maintained spending without depleting savings

U.S. Q4 2025 GDP growth was revised sharply downward to 0.7% in the second estimate, half the initial reading, bringing full-year 2025 GDP to 2.1% versus 2.4% in 2024. The decline was driven by weaker consumption and a government shutdown, while inflation indicators remained elevated with core PCE reaching 3.1% year-over-year, the highest since March 2024. January durable goods orders came in flat at 0.0%, missing expectations of 1.3% growth.

• Q4 2025 GDP revised down to 0.7% from 1.4% initial estimate, with consumption at 2.0% and Q4 Price Index jumping to 3.8%, well above the Fed's 2.0% target
• Core PCE rose to 3.1% year-over-year in January, up from 3.0% and marking the second consecutive month with a 3-handle after spending most of 2025 at 2.8% or lower
• January durable goods orders flat at 0.0% versus 1.3% expected, with non-defense ex-aircraft orders also flat and shipments declining 0.1%

US stocks traded mixed while oil prices held above $100 per barrel as investors reacted to escalating conflict in Iran and a temporary White House lift on Russian energy sanctions until April 11. The sanctions pause aims to ease price pressures from Iran's blockade of the Strait of Hormuz, which handles 20% of global oil supply, though analysts warn prices could remain elevated.

• National average gasoline prices surged to $3.63 per gallon, up more than 20% in the past month, as Brent crude topped $100 and Iranian officials warned prices could spike to $200 per barrel
• Iran's new supreme leader vowed to maintain the Strait of Hormuz blockade after US-Israeli strikes, with at least six foreign vessels reportedly attacked in under 48 hours
• The temporary Russian sanctions lift applies only to oil already in transit and will not provide significant financial benefit to Russia, lasting through April 11

U.S. stock markets declined for a second consecutive week as oil prices surged to multi-year highs amid Iran war concerns and Strait of Hormuz disruptions. Despite an initial plunge from weekend peaks near $120/barrel, crude oil rallied back above $95, with Brent topping $100. Oracle and Nvidia provided support to AI infrastructure stocks through strong earnings and new investments, while broader market weakness persisted with major indexes trading near 200-day moving averages.

• Oil prices hit highest closes since late 2022 after tanker attacks in Iraq and the Strait of Hormuz; IEA announced record 400 million barrel release from strategic reserves including 172 million from the U.S.
• Oracle jumped on strong earnings (EPS up 21% to $1.79) and guidance that eased AI spending concerns; Nvidia announced investments in Thinking Machines Lab and $2 billion in data center operator Nebius Group
• Mixed economic data showed core CPI inflation holding near 5-year low of 2.5%, but core PCE rounded up to 3.1%; Q4 GDP growth was revised down sharply to 0.7% from prior estimates

The US economy grew at just 0.7% annually in Q4 2025, half the initial estimate and sharply down from 4.4% in Q3, primarily due to a government shutdown that slashed federal spending. The downgrade surprised economists who had expected stronger revisions, raising concerns about economic momentum heading into 2025.

• Federal government spending plunged 16.7% due to the shutdown, reducing Q4 growth by 1.16 percentage points
• Consumer spending growth slowed to 2% from 3.5% in Q3, while exports fell 3.3% and underlying economic strength grew just 1.9% versus 2.9% previously
• Full-year 2025 GDP growth was 2.1%, down from 2.8% in 2024, while job creation averaged fewer than 10,000 monthly—the weakest hiring outside recessions since 2002

JPMorgan projects crude oil supply cuts will reach nearly 12 million barrels per day by late March 2026 due to a two-week disruption of tanker traffic through the Strait of Hormuz, caused by U.S.-Israeli conflict with Iran. The crisis has already reduced production by 6.5 million bpd, creating a severe global shortage as demand exceeds supply by approximately 7 million bpd.

• Commercial tanker traffic through the Strait of Hormuz, which handles one-fifth of global oil supply, remains extremely limited with most vessels now Iranian-flagged heading to China
• Global markets face severe shortages of diesel, jet fuel, LPG, and naphtha, with Europe particularly exposed after banning Russian imports and losing access to 5 million bpd of refined products that typically transit the affected waterway
• Approximately 2 million bpd of Middle Eastern refining capacity is offline due to export constraints and infrastructure attacks, with limited spare global capacity likely driving higher product prices rather than increased output

Risk-off sentiment driven by the Iran conflict is severely impacting small-cap markets, particularly London's AIM exchange, by causing capital flight to safe havens and effectively shutting down fundraising channels. The AIM All-Share index experienced meaningful declines as investors prioritize capital preservation over returns, with smaller companies facing heightened vulnerability due to their thinner trading volumes and reliance on external financing. This market dynamic has prolonged a fundraising drought that began with the Ukraine war four years ago.

• Small-cap companies are disproportionately affected in risk-off environments due to narrower revenue streams, lower trading volumes, and heavier reliance on external financing, making them first targets for investor position cuts
• AIM-listed companies face a fundraising crisis as new listings slow to a trickle, compounding a capital drought that has persisted since the Ukraine war outbreak four years ago
• Notable exceptions include ATOME, which secured $420 million in debt financing with 25% on concessional below-market terms, and 88Energy, which rose 77% after clearing a stock overhang from previous fundraising rounds

US stocks rallied on Friday with the Dow climbing 301 points (0.7%) as easing oil prices and assurances about the Strait of Hormuz blockade lifted sentiment. The gains came despite sticky inflation data showing core PCE rising to 3.1% year-over-year and a sharply downward-revised Q4 2024 GDP estimate of 0.7%. Adobe stock plunged over 8% in pre-market trading after CEO Shantanu Narayen announced his exit plan after 18 years.

• Core PCE inflation climbed to 3.1% year-over-year in January, up from 3.0% in December, keeping Federal Reserve rate-cut expectations uncertain
• Q4 2024 GDP growth was revised down significantly to 0.7% from an initial estimate of 1.4%, representing a steep slowdown from the prior quarter's 4.4% growth
• Adobe shares dropped over 8% after CEO Shantanu Narayen's exit announcement, while defense and energy stocks drew continued investor attention amid Middle East tensions

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The U.S. economy grew at just 0.7% in the fourth quarter according to the Commerce Department's revised estimate, significantly slower than the initially reported 1.4% growth rate. This downward revision also missed economist expectations of 1.4% growth, indicating weaker economic momentum than previously believed.

• Fourth-quarter GDP growth was revised down from 1.4% to 0.7%, a substantial downward adjustment
• The revised figure fell short of the 1.4% growth rate that economists had forecast
• This represents the Bureau of Economic Analysis's second estimate of fourth-quarter economic performance

The Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures (PCE) index, rose 2.8% annually in January 2026, showing persistent price pressures. Core PCE, which excludes food and energy, increased 3.1% year-over-year, remaining well above the Fed's 2% target. The data suggests inflation continues to challenge policymakers' efforts to bring prices under control.

• Headline PCE rose 0.3% monthly and 2.8% annually, slightly below December's 2.9% but still 40% above the Fed's 2% target
• Core PCE increased 0.4% monthly and 3.1% year-over-year, up from December's 3% reading, indicating underlying inflation pressures remain elevated
• The persistent inflation readings complicate the Fed's monetary policy decisions as officials rely on PCE data to guide interest rate adjustments