What we learned last week:
“It’s not about how hard you hit. It’s about how hard you can get hit and keep moving forward.” – Rocky
U.S. stock indexes dropped for their second week in a row pulling all three major indexes negative for the year.
Investor’s attention was on events in Iran and key economic indicators, including data pertaining to the labor market and inflation.
Starting with the war in Iran it is the price of oil that has investors’ attention amid growing fears the war could lead to long-term energy supply issues. Friday of last week U.S. crude oil spiked more than 12% to $91 per barrel and brent, the international benchmark, broke $94 per barrel. Since the start of the year U.S. crude oil and brent oil prices have risen more than 50%. When the futures market opened on Sunday evening crude oil spiked to $119 per barrel.
The rise in oil prices have pushed U.S. gasoline prices above $3 a gallon. For every $1 that crude oil futures rise, this typically correlates to about a 2.5-cent rise in retail gasoline prices.
A shutdown of a key waterway, the Strait of Hormuz, is forcing the supply shortage. Iran says it will “set fire” to any ships trying to pass through the world’s busiest oil shipping channel. At this stage, a reopening of the Strait of Hormuz will be because of negotiations between Isreal, U.S., and Iran or Iran’s military exhaustion.
To ease supply chain woes the U.S. offered India a 30-day waiver for buying Russian oil.
Turning to the U.S. economy we are focused on the labor market and inflation. Beginning with the labor market we have mixed reporting and looking at prices we see renewed concern over inflation.
Friday’s nonfarm payrolls from the Bureau of Labor Statistics reported a job loss of 92,000 compared to an estimate for 50,000 jobs added. Additionally, the unemployment rate ticked up to 4.4 as the participation rate continues its fall. A health care workers strike with California’s largest insurer of 30,000 contributed significantly to this loss. Still only a few sectors reported payroll gains.
Lastly, a check on prices from the ISM Manufacturing Prices index jumped in February to 70.5 from January’s reading of 59.0. Higher prices for steel and aluminum drove the sequential gain. Adding to inflation concerns was the Fed’s beige books which reported nine of the Fed’s 12 bank districts mentioned that tariffs contributed to increased costs for business.
The war in Iran will continue to squeeze oil supply, making energy costs higher, and now that a renewed concerns for inflation is in focus individual stocks and major indexes will likely see high degrees of volatility. As we navigate the headline driven market managing your account for your unique needs is our top priority. Please reach out with any questions or concerns.
What’s ahead this week:
Economic Events
- Price changes and inflation will take center stage this week
- Consumer Price Index and Personal Consumption Index will give us a look at the price changes of goods and services purchased by the consumer.
- Existing home sales have been reporting low volume for 3 years and February’s report comes after a sharp fall in sales during January.
Earnings
- Tech and retail companies remain in the spotlight as we wrap up fourth-quarter of 2025’s earnings.
- Tech companies Hewlett Packard Enterprises, Oracle, and Adobe are all trying to gain strength in their respective markets within the AI buildout
- Retail companies Dollar General, Ulta beauty, and Dick’s Sporting Good each touch on different consumer markets and their 2026 outlook will be under the microscope
My goal is for you to feel educated and informed about variables we do and don’t have control over and find ourselves working within. I hope to do it in an informative and relatable way. As always, I value your relationship and planning objectives – my door is always open for conversation.
