This Week in Markets - March 22: Oil, the Fed, and Four Weeks of Pain
The Iran war just made the Fed’s job nearly impossible. Here’s how to trade it.
Welcome back to another weekly market prep with The Dividend Journal! If this is your first time here, great timing. This newsletter is your one stop shop to stay ahead of the market and step into the week fully prepared.
This is going to be a tricky week. We’re coming off four straight weeks of losses in the S&P 500, the longest losing streak since early 2024. Oil settled above $112/barrel, the Fed just told us they’re stuck, and the S&P 500 broke below its 200 day moving average for the first time since last year. But as we talked about a couple weeks ago, these environments eventually create opportunity. The question is timing.
This week brings a lighter earnings slate but some important economic data, headlined by Friday’s PCE inflation print. Let’s get into it.
📊 Last Week Recap
Last week was rough. The $SPY closed at 6,506 on Friday, down 1.5% on the day alone, and the S&P 500 posted its fourth consecutive weekly decline (source). The index is now down 5.1% year to date. JPMorgan cut their S&P 500 year-end target to 7,200 (source). The most significant technical development: the S&P 500 broke below its 200 day moving average (~6,615) on Wednesday for the first time since last year. That’s a level that gets a lot of institutional attention, and closing the week at 6,506 means we’re now well below it.
The big story remains the Iran war and what it’s doing to oil. Brent crude settled at $112.19/barrel on Friday, up 3.3% on the day (source). The Strait of Hormuz is essentially shut, and a fifth of the world’s oil flows through that waterway. Iraq declared force majeure on foreign operated oilfields, and the Pentagon is deploying additional Marines to the region (source). Goldman Sachs says oil could stay in triple digits for years if the strait doesn’t reopen, though their base case has Brent easing to the $70s by Q4 if flows gradually resume from April (source).
On Wednesday, the FOMC held rates steady at 3.5% to 3.75% as expected (source). But here’s the thing: the dot plot now shows a median of one cut expected this year and another in 2027. Of the 19 FOMC participants, seven signaled no cuts at all for 2026, seven projected one cut, and the rest were split between 50-100bp of cuts. Powell called it a “difficult situation” and acknowledged that the war’s implications are “uncertain.” That word keeps coming up.
The PPI report also came in hot: wholesale prices surged 0.7% month over month in February, the largest gain in seven months (source). Producer goods prices specifically jumped 1.1%, the biggest increase since August 2023. Economists are now estimating core PCE rose 0.4% in February, which we’ll get confirmation on this Friday.
The 10-year Treasury yield sits at 4.38%, up from 3.97% pre war. That’s a massive move, and it’s crushing rate cut expectations.
On the earnings front, $LULU reported last week and the results were mixed. Q4 beat expectations, but the 2026 guidance was the story: the company expects annual revenue of $11.35B to $11.50B (below the $11.52B consensus) and EPS of $12.10 to $12.30, well below the $13.26 earned last year and the $12.58 analysts expected (source). The stock got destroyed, down over 50%. That’s your premium consumer bellwether telling you demand is cracking.
In other news, Super Micro Computer’s co-founder was charged with conspiring to smuggle billions in AI chips to China, which dragged the Nasdaq lower on Friday (source).
Sector wise, energy was the only green on the week, while tech, consumer discretionary, and software all got hit hard. Market internals are deteriorating: only 18% of S&P 500 stocks closed above their 50-day moving average on Friday, the lowest since April 2024.
📅 This Week’s Economic Calendar
Tuesday, March 24: Services PMI
Thursday, March 26: Unemployment Claims
Friday, March 27: UoM Consumer Sentiment
