By Mike Dolan
March 11 -
What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
Both energy and stock markets appear to be in a holding pattern after the wild swings earlier this week as they look for any evidence that oil and gas supplies might be freed up in the Middle East.
For now, there are few signs on the ground to back up President Trump’s view that the war will be over very soon, with Tuesday seeing intense bombardments, shipping still blocked in the Strait
of Hormuz, and Saudi Aramco’s CEO warning of “catastrophic consequences” for the oil market if conflict drags on.
I’ll get into that and more below.
But first, check out my latest column on why an Iran oil shock could prove politically toxic in the U.S. even if GDP escapes largely unscathed.
And listen to today's episode of the Morning Bid podcast, where I discuss oil-shock inflation fears and look ahead to today's big macro release - inflation data for the leadup to the crisis.
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FROM PANIC TO PATIENCE
Oil prices initially dropped below $90 per barrel on Wednesday on reports that the International Energy Agency had proposed the largest release of oil reserves in its history - more than double the size of the 182 million barrels released after the Ukraine invasion in 2022.
Oil then staged a rebound, however, as traders digested the proposal. Goldman Sachs estimated a release the size of that in 2022 would offset 12 days of an estimated 15.4 million barrel per day export disruption in the Gulf.
As prices seesaw, though, it will be hoped that Monday's panic surge in crude markets to nearly $120 per barrel has set the parameters for prices - at least until the duration of the Iran conflict becomes clearer.
Wall Street was mixed on Tuesday as the intense bombardments in the Middle East - and further Iranian threats of a comprehensive oil blockade - dampened earlier hopes for a short-lived conflict. All major indexes closed largely flat.
Global shares steadied somewhat on Wednesday as Japan’s Nikkei gained 1.7% and South Korea’s KOSPI rose by 1.75%. European stocks opened lower, however, while U.S. stock futures held steady ahead of the bell.
Meantime, the dollar rebounded after slipping early on Wednesday, holding onto some of the early-week gains it recently shed as traders looked for signs of a quick conclusion to the war.
Later today, traders will get a read on where U.S. CPI was in February, just before the Iran attacks started late in the month. More important, though, will be the release on Friday of February PCE data, the Fed’s favoured measure of inflation. Core inflation measured by the latter was likely already running above 3% before the oil spike.
Elsewhere, Oracle’s shares surged 8% in extended trading after its latest results, which saw it predict boosted revenue estimates well into 2027 on the AI data center boom, helping to reassure investors about the massive scale of its capex. The results also serve as a reminder of the enduring AI theme in equities beyond the day-to-day energy market ructions.
Ongoing angst about private credit funds and the quality of the loans contained within them is also rising, however. JPMorgan Chase has marked down the value of certain loans held by private credit groups and is tightening its lending to the sector, the FT reported on Wednesday
Chart of the day
U.S. consumer prices likely picked up in February as the cost of gasoline increased in anticipation of an escalating war in the Middle East, and with the conflict driving up oil prices, a further rise in inflation is expected in March.
The anticipated increase in the Consumer Price Index last month would also reflect the continued but staggered pass-through from President Donald Trump's sweeping tariffs, which he pursued under a law meant for use in national emergencies, that have since been struck down by the U.S. Supreme Court.
Today's events to watch
* U.S. February CPI (8:30 AM EDT)
* U.S. 10-year note auction
* Fed's Michelle Bowman speaks
* OPEC Monthly Oil Market Report
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(By Mike Dolan)
