The S&P 500, which scored a new low for 2026 on Friday, posted a 1.6% loss last week and notched its first three-week losing streak in about a year. The 30-stock Dow slid about 2%, while the tech-heavy Nasdaq fell 1.3% last week.
Stocks have been reacting to news of the war in Iran and swings in oil prices.
The recent rally in oil prices continued on Friday. West Texas Intermediate crude futures settled up 3.11% at $98.71 per barrel. Brent futures settled higher by 2.67% at $103.14 a barrel. Brent had closed above $100 for the first time since August 2022 on Thursday.
February’s Consumer Price Index (CPI) data indicated that inflation remained well behaved overall, and Personal Consumption Expenditures (PCE) data showed cooling inflation. However, the January report on personal income, spending, and inflation showed inflation-adjusted consumer demand barely keeping pace with the rise in prices.
Rising oil prices may lead to a stagflationary environment of higher inflation and slower economic growth. Those fears have even prompted investors to dampen their expectations for Federal Reserve (Fed) interest rate cuts this year, as fed funds futures trading is no longer anticipating an interest rate cut in September.
The initial soft print of fourth-quarter Gross Domestic Product (GDP) was revised lower; consumer sentiment from the University of Michigan indicated lower sentiment and expectations, but better conditions; and the Job Openings and Labor Turnover Survey (JOLTS) data showed lower job turnover and more job openings.
This week, investors will follow developments related to the Iran war as well as the Federal Open Market Committee’s policy decision on Wednesday. In the realm of economic releases, key updates will include Producer Price Index (PPI) inflation data, industrial production, factory orders, and a handful of housing market updates.
College basketball’s March Madness begins this week.
If you press the Looking Ahead link below, you will find research written by Wells Fargo Investment Institute. Below are excerpts from that report.
Week in review: March 9-13
Economic data
- Ahead of the spike in oil prices related to the Iran war, February CPI data aligned with expectations that indicated that inflation remained well controlled.
- On a month-over-month basis, headline and core CPI inflation gained 0.3% and 0.2%, respectively. Year-over-year, the headline rate of 2.4% and the core rate of 2.5% remained unchanged from the prior month. Notably, this 2.5% core rate represented the slowest pace in nearly 5 years.
- A key component of housing costs, rent of primary residence, slowed to a subdued 0.1% rate. Well goods prices saw a marginal increase, the report showed up ticks in groceries and gas gasoline prices.
- January PCE data was also released last week. It indicated that personal income, spending, and inflation showed demand was barely keeping pace with rising prices.
- Headline PCE inflation came in at 0.3% month-over-month and 2.8% year-over-year. Meanwhile, core PCE printed at 0.4% month-over-month and 3.1% year-over-year.
- During the period, consumer spending shifted away from goods, but remained strong in essential services, such as Healthcare.
- The second print of fourth-quarter GDP was revised lower to 0.7%, with the print reflecting subdued economic activity related to the government shutdown, slower consumer spending, and a tariff-related drag on exports.
- The drop was the result of downward revisions to consumer spending, business investment, and government outlays, along with a widening of the U.S. trade deficit during the opening months of 2026.
- Small business optimism declined to 98.8 in February, driven by a downshift in capital expenditures and hiring plans. However, sales improved, and respondents’ outlooks felt slightly but remained constructive.
- In the realm of housing market data, existing home sales for February improved but remained subdued. Housing starts for January saw a significant jump that was driven entirely by multifamily starts, and building permits for January fell. Ultimately, affordability remains a substantial headwind to the housing market.
Looking Ahead to this week: March 16-20
U.S.
- Highlight of the week will be the Fed’s March 17-18. meeting, with markets anticipating no change in the policy rate and looking forward to both the updated Summary of Economic Projections and Fed Chair Jerome Powell’s comments during the post-meeting press conference.
- Other reports capturing attention include February PPI, leading index, industrial production, and measures of March economic activity from the New York and Philadelphia regional Fed banks.
- Also on tap: January factory orders, wholesale trade sales, and a flurry of housing market data, including March homebuilder sentiment, February, pending home sales, and January new home sales
- Investors will also be watching for any developments in the Iran war and its impact on the global oil market
Asia
- In China, the focus will be on February’s industrial production, retail sales, fixed asset investment, and surveyed jobless rate, along with March’s one- and five-year loan prime rates.
- The Bank of Japan will hold a policy meeting, while economic data out from the country includes February trade balance and January’s Tertiary (service) Industry Index, core machine orders, and finalized industrial production.
- The Reserve Bank of Australia’s meeting early in the week will accompany February labor market data, and leading index. South Korea’s February unemployment rate and Export Price Index will also hit the tape.
Europe
- The highlight will be Thursday’s European Central Bank policy meeting. Meanwhile, economic updates will include the Euroszone’s, March ZEW expectations for economic growth, finalized February CPI, and January trade balance.
- The central banks of England, Sweden, and Switzerland will also hold policy meetings on Thursday, while the U.K. is set to release the latest labor market data and March house price data.
- Also, be on the lookout for France’s February retail sales, while German releases include March’s ZEW index of current conditions and the February PPI.
