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Equities: pressure remains across regions
Asian equities were broadly weaker on Friday, with Reuters reporting MSCI Asia-Pacific down about 1%, Japan’s Nikkei down 1.4%, and South Korea’s tech-heavy market down nearly 2%. The pressure followed another difficult session on Wall Street on Thursday, where Reuters market data showed the Dow fell 1.56%, the S&P 500 dropped 1.52%, and the Nasdaq lost 1.78% as investors reacted to higher oil prices and renewed inflation fears.
European equities have also remained under strain. Reuters reported that the STOXX 600 fell 0.6% on Thursday and is down 5.6% since the Middle East conflict escalated, while UK equities also extended losses as investors priced in a more difficult inflation backdrop. Energy shares have outperformed, but banks and cyclicals have struggled as markets weigh the risk of weaker growth and tighter financial conditions.
Oil: the main macro signal
Oil remains the clearest signal in the market. Reuters reported Brent at $101.48 and WTI at $96.67 on Friday, with both benchmarks still headed for strong weekly gains despite a U.S. 30-day sanctions waiver allowing purchases of Russian oil already stranded at sea. The waiver helped cap some upside, but it has not changed the core market story: supply risks tied to the Strait of Hormuz and broader Middle East disruption are still dominating price action.
That matters well beyond energy markets. Higher crude prices are feeding directly into inflation concerns, which is why the current move is being treated as a macro shock rather than just a commodity rally. Reuters also reported that the IEA described the situation as the largest oil supply disruption ever linked to the conflict, reinforcing the idea that oil is now the central variable for global risk sentiment.
FX and rates: dollar stronger, rate-cut bets reduced
The U.S. dollar remains the preferred safe haven. Reuters reported the dollar at a three-month high, the euro near its weakest levels since November, and the yen at a 20-month low, with Japanese officials warning they are ready to act against excessive currency moves.
At the same time, the market has materially reduced expectations for near-term easing. Reuters said traders now price only around 20 basis points of Federal Reserve cuts, down from about 50 basis points previously, as the oil shock clouds the disinflation story. In other words, markets are increasingly worried that central banks may be forced to stay tighter for longer even as growth momentum softens.
Gold and crypto: mixed reaction to the same macro story
Gold is slightly firmer on the day, but the weekly picture is weaker. Reuters reported spot gold at about $5,095.55 an ounce on Friday, with bullion heading for a second straight weekly loss because the jump in oil prices has reduced hopes for near-term Fed rate cuts. That is an important signal: even a geopolitical backdrop is not enough to fully lift gold when inflation fears are pushing yields and the dollar higher.
Crypto is holding up relatively better. Reuters reported Bitcoin trading above $71,000 as the dollar rose and traditional risk assets stayed under pressure. That suggests crypto is showing some resilience, but it is still trading inside the same macro regime driven by oil, rates, and global risk sentiment.
Europe watch: weaker UK growth, firmer German pipeline prices
Friday’s European data reinforced the uneasy macro mix. The UK’s Office for National Statistics said real GDP was flat in January 2026, while GDP grew just 0.2% over the three months to January. Services output showed no monthly growth, production slipped 0.1%, and construction rose 0.2%, pointing to a soft underlying growth picture.
In Germany, Destatis reported wholesale prices rose 1.2% year on year and 0.6% month on month in February. On its own, that is not an alarming number, but in the current environment, it reinforces concern that the energy shock could filter further into upstream price pressures across Europe.
What traders are watching today
Today’s next major catalysts are U.S. macro releases. The BEA’s release calendar shows that the second estimate of Q4 2025 GDP and January 2026 Personal Income and Outlays are both scheduled for March 13 at 8:30 a.m. ET, while the BLS schedule shows that January 2026 JOLTS is due at 10:00 a.m. ET. These releases matter because markets now need proof that the U.S. economy can absorb the oil shock without turning the current setup into a more serious stagflation risk.
Market view
The short-term tone remains cautious. As long as oil stays elevated, the market narrative is likely to remain centered on inflation risk, tighter financial conditions, and delayed rate cuts. That keeps the backdrop supportive for the dollar and energy, but more difficult for broad equities, rate-sensitive sectors, and currencies already under pressure. A clear improvement in sentiment probably requires either a meaningful pullback in crude or U.S. data strong enough to reassure investors that growth is not rolling over.
FAQ
Why are markets weak today?
Because the oil shock is worsening inflation fears and reducing expectations for interest-rate cuts, it is pressuring equities and supporting the dollar.
Why is oil the key market driver right now?
Because supply disruption risk in the Middle East, especially around the Strait of Hormuz, has pushed Brent above $100 and changed the inflation outlook across asset classes.
What data matters most today?
U.S. GDP, Personal Income and Outlays, and JOLTS, all due on March 13, 2026.
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