ORLANDO, Florida, March 17 - Stocks climbed and sovereign yields, along with the dollar, eased on Tuesday after Brent crude oil regained levels above $100 a barrel. Market participants shifted attention to a Federal Reserve interest rate announcement scheduled for Wednesday, taking stock of how higher energy prices and other data may feed into central bank deliberations.
Alongside these moves, commentators noted a stronger-than-expected position for Chinese President Xi Jinping heading into a summit with U.S. President Donald Trump, driven in part by a quieter-than-anticipated economic backdrop for China. With the U.S. administration's foreign policy agenda dominating headlines, the Chinese economic recovery has received comparatively little attention.
For readers seeking deeper context on today’s market action, a short list of articles was recommended: 1) a retrospective on the U.S. ‘‘transitory’’ inflation label at five years, 2) analysis of how central banks can signal policy firmness without enacting aggressive moves, 3) a discussion of Iran-driven upside risk to oil approaching $200 a barrel, 4) coverage of a delayed summit and its implications for U.S.-China trade relations, and 5) reporting on debt investors reducing exposure to software companies as a signal of stress in that sector.
Market snapshot
- Stocks: S&P 500 +0.25%, Nasdaq +0.5%. European equities +0.6%, U.K. +0.8%, Asia mixed.
- Sectors and shares: Eight S&P 500 sectors rose; consumer discretionary and energy each gained about +1%. Healthcare was the largest decliner, down -1%. Airline stocks advanced, led by Delta at +6%. Private credit names rebounded, with Apollo and Blackstone up +5%. Eli Lilly slipped -6%.
- FX: The dollar drifted lower. Nokkie was the top G10 performer at +0.9%, and the Australian dollar rose +0.5% following a Reserve Bank of Australia rate increase.
- Bonds: U.S. yields fell around 2 basis points at the long end; the 2s/10s curve moved down to 52 basis points, near the flattest levels seen this year. A 20-year Treasury auction attracted solid demand.
- Commodities and metals: Oil climbed roughly +3%, pushing Brent back above $100 per barrel. On an annual basis, crude is up approximately 40% year-on-year. Gold held steady, quoted near $5,000 per ounce.
Key discussion points
One thread among investors is whether U.S. market resilience constitutes a form of ‘‘exceptionalism.’' Since the outbreak of war in the Middle East, U.S. equities have outperformed many peers: euro zone stocks are down about 3%, U.K. stocks down about 4%, and the Nikkei and Asia ex-Japan indices are each down roughly 7%. In contrast, the S&P 500 has lost less than 2% and the Nasdaq is almost flat over that period.
Yet when viewing performance from the start of the year, the relative picture changes. Year-to-date figures show euro zone stocks up 1%, U.K. stocks and the Nikkei up about 4%, and Asia ex-Japan up around 7%, while the S&P 500 has fallen about 2.5% and the Nasdaq is down about 4.5%.
Energy costs have moved sharply higher: average U.S. gasoline prices at the pump are roughly 25% above previous levels, sitting at just under or just over $4 per gallon depending on the survey cited, while diesel prices have risen past $5 per gallon. Jet fuel has surged by more than 50%, a jump likely to raise air travel costs materially. To date, U.S. consumers have shown notable resilience to the war-driven rise in fuel prices, but sustained higher prices would be expected to weigh on spending.
Bond markets are reacting to these developments with flattening yield curves. After the initial inflation shock, market pricing suggests the possibility of a sharp slowdown in growth ahead. This flattening trend is not confined to the United States.
Across major markets the 2s/10s curves have compressed: Germany’s 2s/10s curve has narrowed from roughly 80 basis points in early February to about 45 basis points, the flattest level in a year. The U.K. curve, which was above 90 basis points and at its steepest since 2018, is now flattening. Australia’s curve, contending with rising policy rates, is at its flattest since December 2024.
Events that could move markets next
- Developments in the Middle East
- Energy market shifts
- New Zealand current account (Q4)
- Japan Tankan survey (March)
- Japan trade data (February)
- European Central Bank two-day policy meeting commencement
- Brazil interest rate decision
- Canada interest rate decision
- U.S. durable goods and factory orders (January)
- U.S. producer price inflation (February)
- U.S. Federal Reserve interest rate decision, revised economic projections and dot plot, and the Chair’s press conference
For those who want a daily briefing delivered to their inbox, a weekday newsletter is available by subscription. The summary above focuses on market moves, energy-price implications, and central bank calendar items that investors are monitoring ahead of major policy decisions this week.