Inflation Data, Easing Oil Price Give Stocks Boost

Published as of: March 13, 2026, 9:26 a.m. ET

(Friday market open) Stocks climbed approaching the weekend as crude prices eased and January inflation data met expectations. The January Personal Consumption Expenditures (PCE) price index, a report the Federal Reserve eyes closely, rose 0.3% from December. Core PCE excluding food and energy, climbed 0.4%, matching December's 10-month high. On an annual basis, core PCE rose 3.1%, still far above the Fed's 2% goal. "Inflation remains elevated," said Nathan Peterson, director of derivatives research and strategy at the Schwab Center for Financial Research (SCFR). "Add in recent softness in labor market data, heightened uncertainty around the Iran conflict, and higher oil prices, and it leaves the Fed in a difficult position."

Soon after the open, investors brace for January job openings and preliminary March consumer sentiment, though primary focus remains on crude oil and the war. Crude gave stocks a slight tailwind, losing steam after the Wall Street Journal reported that India is in negotiations with Iran to allow some tankers through the Strait of Hormuz, possibly as soon as this weekend. Looking ahead, Monday kicks off Nvidia's (NVDA) GPU Tech Conference (GTC), with a speech by CEO Jensen Huang scheduled for 2 p.m. ET that day. Next week is packed with central bank meetings as policymakers struggle to decide on rates amid crosscurrents from the war.

On Thursday, major indexes fell sharply across the board and ended near their lows after Iran's supreme leader said the Strait of Hormuz would stay closed, though that was contradicted this morning by the U.S. secretary of defense, who told the media "we have been dealing with it" and not to worry about it, CNBC reported. Wall Street's finish Thursday looked soft technically, and so did the S&P 500's drop below 6,700 in what's on track to be its third straight losing week—the longest in a year. The S&P 500 Index is now down 2.5% year to date, and Thursday's settlement was the lowest since late November.

1. Yield path still tracking crude, but weak GDP may dent: The 10-year Treasury note yield slipped below 4.25% this morning, though two Treasury auctions saw soft demand earlier this week. Today's Job Openings and Labor Turnover Survey (JOLTS) data could have an additional impact on yields, which yesterday hit one-month highs on inflation concerns due to the oil rally. However, today's second government gross domestic product (GDP) estimate for the fourth quarter fell to 0.7% from the first estimate of 1.4%, which could weigh on yields. "A bit of a stagflationary update for U.S. fourth quarter GDP," observed Kevin Gordon, head of macro research and strategy at SCFR. Data to watch next week include Monday's February industrial production and Wednesday's February Producer Price Index (PPI). "The longer the situation in the Middle East lasts, the greater likelihood that oil will remain elevated and raise inflation. This likely puts a floor on how much lower longer-term rates can go," said Cooper Howard, director of fixed income research and strategy at SCFR.
    
2. Wall Street whipsaw seen persisting: While stocks remain captive to oil prices in both directions, markets have been relatively resilient at the index level. That's not true for individual stocks, many of which suffered double-digit losses over the last two weeks. "Continue to expect violent-at-times rotations given how much 'short attention span' money there is among traders," said Liz Ann Sonders, chief investment strategist at SCFR, adding that margin debt is at a record high. One sector in the spotlight is consumer discretionary, already one of the worst performers of the year but potentially subject to more downward pressure if consumers push back amid higher gas prices. The energy sector, meanwhile, "is becoming the momentum trade, meaning its strength is feeding off of how well it's been doing," Schwab's Gordon said in a podcast on war-related market impacts this week. If energy reverses, it could be subject to aggressive swings.
    
3. Fed debates inflation vs. jobs: As next week's Fed meeting approaches, policymakers try to simultaneously address energy-driven inflation gains and a dismal jobs climate. The word "stagflation" showed up in headlines recently, a reminder of how difficult it can be for central banks to confront a combined rise in prices and slowdown in the economy. Today's weak GDP revision reinforces growth concerns. Four years ago, faced with a similar conundrum, the Fed initially kept rates low even as crude spiked after Russia invaded Ukraine. Soon, inflation soared to 40-year highs and the Fed hustled to raise rates but received criticism for initially calling inflation "transient." The Fed's current target range of 3.5% to 3.75% compares with 0% to 0.25% at the start of the Ukraine conflict and is on the high side of the 15-year average. Cleveland Fed President Beth Hammack told The New York Times last week it could be on hold for a while. Fed Governor Stephen Miran, however, thinks the Fed is too focused on fighting inflation, which he sees as a lesser threat than weaker labor conditions, especially after February's soft jobs report. The war-driven crude rally didn't change his mind.

• Adobe (ADBE) lost nearly 8% this morning despite the software giant reporting better-than expected quarterly earnings and revenue and issued guidance that topped Wall Street's consensus. However, fiscal Q1 net new annual recurring revenue of $400 million was shy of some estimates.  Adobe added is searching for a successor for 18-year CEO Shantanu Narayen.
   
• Nvidia rose nearly 1% early Friday ahead of its GTC conference. Nvidia is expected to show multiple hardware innovations, potentially including a new chip for inference, the process of generating results from AI models, Barron's reported.
   
• Ulta Beauty (ULTA) lost 7% this morning as quarterly earnings came in shy of Wall Street's consensus, though revenue topped expectations. Guidance for fiscal 2027 also appeared to disappoint from an EPS standpoint.
   
• Meta Platforms (META) sank 1% this morning after The New York Times reported Meta has delayed the launch of its Avocado AI model to at least May due to performance concerns.
   
• Bitcoin (/BTC) rose 3% early in what appeared to be a technical move as the cryptocurrency continued to show signs of resilience despite the war.
   
• Eight of 11 S&P 500 sectors fell yesterday, with only energy and the defensive utilities and staples sectors up. Industrials finished last, right behind financials and consumer discretionary as economic growth worries intensified.
   
• The CME FedWatch Tool now shows the futures market only anticipating a single rate cut this year, and likely not until autumn.
   
• The U.S. dollar continued its resilience despite higher oil and weaker U.S. equities. It traded at just over 100 earlier today, the highest point this year. It last topped 100 on November 25. The U.S. has robust energy supplies, shielding it slightly from turbulent global prices, a big reason for the dollar's recent strength, and a factor behind the Japanese yen's recent weakness. U.S. energy supplies are one reason the dollar has acted as a "safe haven" trade since the war began.
   
• Dow (DOW) climbed 9% Thursday and other chemical companies also rose as the war drove up prices for fertilizer components made from chemicals, Barron's reported.
   
• Technically, the S&P 500's November closing low of 6,538 could be a level to watch. The 200-day moving average of 6,600 may be the first point of support on another descent. The S&P 500 hasn't closed below its 200-day moving average since last May.

The 10-year Treasury note yield (TNX:CGI—candlesticks) topped 4.27% late yesterday, near its January high of 4.31%. It's now above its 200- and 100-day moving averages (green and blue lines), with 4.5% (red line) a key level to watch. It hasn't topped 4.5% since June, during the last U.S. skirmish with Iran. Higher crude prices that raised inflation fears and sent rate cut odds lower pushed yields up this week, but in the long-term higher oil might hurt the broader economy, perhaps sending yields down at some point.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

March 16: February industrial production, and expected earnings from Dollar Tree (DLTR).
March 17: Expected earnings from lululemon (LULU) and DocuSign (DOCU)
March 18: FOMC rate decision, Bank of Japan (BOJ) rate decision, February PPI, and expected earnings from General Mills (GIS), Williams-Sonoma (WSM), Micron (MU), and Five Below (FIVE).
March 19: ECB rate decision and expected earnings from Alibaba (BABA), Accenture (ACN), Darden Restaurants (DRI), and FedEx (FDX).
March 20: No major data or earnings expected.