Weekly Market Update – March 20, 2026

Quick Takes

• Wall Street wrapped up the week with a sharp pullback as investors grappled with rising oil prices and renewed uncertainty from the ongoing Middle East conflict. The S&P 500 fell -1.9%, the tech-heavy Nasdaq dropped -2.1%, and the small-cap Russell 2000 slid -1.7%.
• The Federal Reserve kept interest rates unchanged at 3.50%–3.75% for the third straight meeting. Fed Chair Jerome Powell highlighted heightened economic uncertainty, warning that energy shocks can destabilize inflation expectations.
• Government bonds extended their selloff as investors reassessed the near-term path of monetary policy amid sticky inflation data and rising energy prices. The U.S. 10‑year Treasury yield rose +10 basis points to +4.38% and the 2‑year yield jumped +18 basis points to about 3.90%.

Source: Bloomberg. Data as of March 20, 2026.
Price Returns for Equity, Total Returns for Bonds.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.

Oil pressures test global investors, rattle stock and bond markets

Wall Street wrapped up the week with a sharp pullback as investors grappled with rising oil prices and renewed uncertainty stemming from the ongoing conflict in the Middle East. With oil prices hovering near $100 a barrel and central banks around the world signaling concern about inflation risks, stocks and bonds markets globally moved decisively lower, marking one of the most challenging stretches of the year so far. Below is a breakdown of the week’s major developments across U.S. stocks, international markets, bonds, and the broader economy.

U.S. Stocks: A fourth straight weekly decline

U.S. equities ended the week firmly in the red, marking the fourth consecutive weekly decline for all three major indexes and their worst percentage losses since April’s tariff-related volatility.

• The S&P 500 fell -1.9%, leaving the benchmark nearly -7% below its all‑time high.
• The tech-heavy Nasdaq Composite dropped -2.1%, closing lower for the ninth time in the past 10 weeks — a streak not seen since 2022.
• The small-cap Russell 2000 slid -1.7%, officially entering correction territory after a strong start to the year.
• The S&P MidCap 400 Index held up best but still declined -1.3%.

Energy prices and geopolitical headlines once again dominated investor sentiment. Market swings have been closely tied to developments in the Middle East since the war in Iran began on Feb. 28, reinforcing fears that prolonged conflict could trigger an energy-driven inflation shock.

Those concerns were echoed by the Federal Reserve, which kept interest rates unchanged at 3.50%–3.75% for the third straight meeting. Fed Chair Jerome Powell highlighted heightened economic uncertainty, warning that energy shocks can destabilize inflation expectations. Notably, futures markets now assign a 31% chance of a rate hike in 2026, up from zero just a week earlier, while expectations for a rate cut later this year have faded sharply.

International Stocks: Momentum stalls after a strong run

Overseas markets also struggled, signaling a broader shift in global momentum. After 14 consecutive positive weeks, non‑U.S. stocks have now fallen for three straight weeks.

Developed-market stocks, measured by the MSCI EAFE Index, declined -2.0%, following a -2.1% drop the prior week — which was their worst weekly showing since April 2025. According to MSCI Country Indexes:

• Germany fell -3.6%
• The U.K. declined -2.8%

Emerging markets performed relatively better, slipping -0.4% after a steeper decline the week before. 

• South Korea rebounded +5.6%
• But India fell -1.7% and China declined -2.8%

China remained in focus after the U.S.–China summit was delayed. President Trump requested the March 31 meeting in Beijing be postponed so he could remain in Washington to coordinate military efforts. Negotiators from both countries met in Paris, agreeing to maintain stable tariff levels and explore a framework to support trade — a modest positive signal amid broader uncertainty.

Bonds: Yields surge as rate fears return

Government bonds extended their selloff as investors reassessed the near-term path of monetary policy. The Fed’s steady stance, combined with sticky inflation data and rising energy prices, pushed yields meaningfully higher.

• The U.S. 10‑year Treasury yield rose to +4.38%, up +10 basis points on the week
• The 2‑year yield jumped +18 basis points to about 3.90%
• The 30‑year yield inched up +3 basis points to 4.94%
• In the U.K., 10‑year gilt yields briefly topped 4.95%, their highest level since 2008

The Bloomberg U.S. Aggregate Bond Index, a broad measure of the U.S. bond market, fell for a third straight week, losing -0.5% after a -0.8% drop the week before — which was its worst week since April 2025. International bonds fared better, breaking a two-week losing streak with the Bloomberg Global Aggregate ex-U.S. Index logging a +0.2% return for the week. 

It was a busy week for major central banks, and like the Fed in the U.S., they generally struck a cautious tone and mostly held rates steady:

• On Tuesday, the Reserve Bank of Australia raised rates by +0.25 percentage points to 4.10%, citing persistent inflation and higher fuel costs.
• On Wednesday, the Bank of Canada held rates at 2.25%, acknowledging higher energy-driven inflation but emphasizing downside growth risks.
•  On Thursday, the Bank of England, European Central Bank, and Bank of Japan all kept rates unchanged while signaling concern over inflation pressures tied to oil.

Economics: More signs of inflation and housing showed mixed signals

New economic data reinforced investors’ inflation worries. The February Producer Price Index (PPI) surprised to the upside, rising +0.7% month over month, well above expectations for a +0.3% rise. Core PPI, which excludes food and energy, increased +0.5%, suggesting inflation pressures extend beyond oil alone.

The housing picture was more mixed:

• The NAHB Housing Market Index edged up to 38 in March, showing a modest improvement in builder sentiment. However, 37% of builders cut prices, underscoring affordability challenges.
• Pending Home Sales rose +1.8% in February, rebounding from January’s decline.
• In contrast, New Home Sales fell sharply, dropping to the lowest level since 2022 as higher mortgage rates weighed on demand.

The Bottom Line

Markets are increasingly being shaped by a familiar but uncomfortable mix: geopolitical risk, elevated energy prices and stubborn inflation. For investors, the week reinforced that the path to lower inflation and easier monetary policy remains uncertain — and that volatility, especially tied to oil and global events, will likely remain a key theme in the weeks ahead.

Chart of the Week

February wholesale inflation increased with the headline Producer Price Index (PPI) rising +0.7% for the month, above expectations for +0.3% and the unrevised +0.5% level the prior month. Year-over-year (YoY) PPI increased at a +3.4% rate, above expectations for +3.0% and +2.9% the prior month (unrevised).  Core PPI, which strips out volatile food and energy costs, was up +0.5% for the month, compared to expectations for a +0.3% rise, but down from a +0.8% reading the prior month (unrevised). YoY Core PPI was up +3.9%, above expectations for +3.7% and up from the prior month’s +3.5% annual rate (revised lower from +3.6%). The index for final demand goods increased +1.1% after a -0.2% dip the prior month, whereas the index for final demand services rose +0.5%, mostly due to a +0.6% increase in the Final Demand Trade Services less Trade index. The bottom line is that the PPI uptick came from both goods (+1.1%) and services (+0.5%), and the data was before the war with Iran and the surge in energy prices that it sparked.

Wholesale Prices Rose Much More Than Expected in February

U.S. Producer Price Index (PPI), Year-over-year % change (Feb. 2023 – Feb. 2026)

Source: Briefing.com.

The Week Ahead

Economic data and earnings news is on the lighter side this week so activity around war in Iran will likely dominate headlines. Two reports are due Monday, the Chicago Fed National Activity Index (CFNAI) and Construction Spending. The March U.S. Flash PMIs from S&P Global on Tuesday will provide the first look at economic trends since the conflict in Iran began. Richmond Fed will also release March manufacturing activity. The Kansas City Fed releases their March manufacturing survey on Thursday. The week concludes with the final University of Michigan Consumer Sentiment results for March. Investors will be looking at how sentiment has held up since the Iran conflict began, as well as how inflation expectations have been impacted. 

Wall Street will also digest comments from multiple Fed officials—including Vice Chair Michael Barr and San Francisco Fed President Mary Daly who are scheduled to speak.

Did You Know?

FEELING BETTER ABOUT DEBT – The February Survey of Consumer Expectations, a monthly survey of U.S. households by the New York Federal Reserve Bank, showed the probability of missing a debt payment in the next three months fell sharply from 15.3% in December to 11.6% — the largest two-month decline since early 2020. Declines were broad-based across incomes and demographics, with the largest drop among households earning under $50K. (Source: NY Federal Reserve)

STATE TAX RATES HEAD LOWER – Since 2020, 21 states have cut their top marginal rate, while 6 — DC, MD, MA, NM, NY, and WA — have raised them. The highest rates are in California (13.3%), Hawaii (11%), and New York (10.9%). (Source: Tax Foundation)

BAD START, STRONG FINISH? – Through the morning of March 12, the S&P 500 Financials sector was down -11.1% year-to-date, the seventh worst start through that date since 1990. In the six prior incidents when the Financials sector fell -10% or more year-to-date as of 3/12, it gained an average of +27.8% over the rest of the year, five out of six times. The exception was 2008, when the sector fell an additional -49% through year end. (Source: Bespoke)

This Week in History

FIRST CRASH – On March 19, 1792, Wall Street crashed for the first time. On “Black Monday,” 6% Treasury bonds lost -10% of their value and shares in the Bank of the United States dropped -12%. Speculator William Duer, a friend of Alexander Hamilton, had borrowed too much money and was about to be thrown into debtors’ prison. (Source: The Wall Street Journal)

Economic Review

• The New York Fed’s Empire State Manufacturing Index, a gauge of manufacturing activity in the state, sank -7.3 points to -0.2 points in March. Wall Street expected a drop to +3.9. New Orders inched up +0.6 points to +6.4, but Shipments dropped -5.9 points to -6.9. The Employment index rose +1.8 points to +5.8. Both inflation gauges fell, with the Prices Paid index plunging -12.5 points to +36.6 and the Prices Received index slipping -0.8 points to +21.4. The outlook soured a bit, with the Six Months Ahead General Business Conditions index falling -3.7 points to +31.0, after hitting its highest level since early last year in February. Notably, the expected Capital Expenditures index rose +3.4 points to +21.6, a multi-year high, following an +8.0 points jump the previous month, indicating continued strength in capital spending plans.
• The Philly Fed Manufacturing Business Outlook Survey improved +1.8 points to +18.1 in March. That was sharply higher than Wall Street forecasts for a drop to +8.0. Readings above zero indicate economic expansion and below zero signal economic contraction. The indexes for New Orders fell -3.1 points to +8.6, but the Shipments soared +21.9 points to +22.2. Delivery Times rose significantly, up +28.8 points to -18.9. The Employment index rose out of contraction, up +2.1 points to +0.8, while the Average Workweek jumped +14.4 points to +2.8. Prices Paid remain elevated, rising +5.8 points to +44.7, while Prices Received increased +4.5 points to +21.2, indicating ongoing pricing power for firms. Future activity expectations improved markedly, with the Future General Activity index slipping -2.8 points to +40.0.
• US Industrial Production increased +0.2% for the month of February, above expectations for +0.1% but down from +0.7% the prior month (unrevised). Manufacturing Production, which represents about three-quarters of total Industrial Production, was up +0.2%, above expectations for a +0.1% increase but down from +0.8% the prior month (revised higher from +0.6%). Year-over-Year, Industrial Production was up +1.4%, following the prior month’s +2.3% annual pace. Capacity Utilization improved to 76.3%, unchanged from the prior month (revised up from 76.2%). Capacity Utilization reflects how much a manufacturing plant is being used to produce things. The key takeaway from the report is that industrial production has seen four straight monthly increases, albeit with tepid output in February.
• The Commerce Department reported that Factory Orders increased +0.1% in January, matching expectations and up from the -0.4% rise the prior month (revised higher from -0.7%). In contrast, Factory Orders Excluding Transportation were up +0.4%, down from +0.6% the prior month after being revised higher from +0.4%. The final read for January Durable Goods Orders for long-lasting items such as televisions, appliances, and transportation equipment was 0.0%, in line with expectations and from where they were in the advance report. That followed a -0.9% drop the prior month. Durable Goods Orders Excluding Transportation were up +0.4%, matching the advance reading and up from the prior month’s -0.7% fall. The important Core Capital Goods Orders (capital goods excluding volatile sectors like transportation and defense), a proxy for business spending, was up +0.1%, up from the expected 0.0% advance reading but down from the +0.8% increase the prior month (originally +0.4%).  Core Capital Goods Shipments, which are factored into GDP, slipped -0.1%, matching expectations and the advance reading but down from the unrevised +1.0% reading the month before. The inventory-to-shipments ratio was 1.55 compared to 1.56 the month before.
• The Census Bureau preliminary report of Wholesale Inventories for January fell by -0.5% to $909.3 billion, far short of expectations for a +0.2% rise and down from the prior month’s -0.1% (revised down from +0.2%). Year-over-Year (YoY) inventories were up +1.0%, down from the +2.9% annual rate the prior month. That is still well below the typical +4% to +6% annual increase in strong economies. Inventories are goods produced for sale that have not been sold yet. Wholesale Trade Sales rose +0.5% to $727.5 billion, after rising +1.3% the prior month (revised up from +1.0%), which matched Wall Street expectations. YoY sales were up +5.2%. Wholesale inventories data isn’t adjusted for inflation. The Inventory-to-Sales Ratio ticked down to 1.25 months from 1.33 months. The ratio reflects how long it would take a company to sell all the goods sitting on warehouse shelves.  
• The Conference Board Leading Economic Index® (LEI) slid by -0.1% in January to 97.5, in line with Wall Street expectations, and follows a -0.2% decline in December (unrevised). Six of the 10 indicators advanced in the month. Manufacturing Average Weekly Hours led the positive readings. Consumer Expectations of Business Conditions led the detractors. “The U.S. LEI fell further in January, as consumer expectations retreated again and building permits softened,” said Justyna Zabinska-La Monica, senior manager at The Conference Board. The reading signals continued headwinds to economic activity, though data showed improvement over the six-month period, she said. However, the latest data doesn’t reflect the impact from war in Iran. The Conference Board Coincident Economic Index® (CEI) rose by +0.3% to 115.3, following a +0.2% change the prior month. The Conference Board Lagging Economic Index® (LAG) inched up by +0.3% to 120.0, after declining by -0.2% the prior month. 
• Homebuilder confidence inched up in March as the National Association of Home Builders (NAHB) Housing Market Index (HMI) improved +1 point to 38, versus expectations to remain at 37, which was the prior month’s level after being revised lower from 38. A year ago, the index stood at 39. The index is based on a 0-to-100 scale, where any number over 50 indicates a good reading, and below 50 is considered negative sentiment. Sentiment has been in negative territory for 21 months in a row. The three subcomponents all increased for the month with the Current Sales component up +1 point to 42, Sales Expectations in the Next Six Months were up +2 points to 49, and Traffic of Prospective Buyers was up +3 points to 25. For the month, 37% of builders reported cutting home prices (up +1 percentage point), the average price reduction was steady at 6%, and use of sales incentives was 64% (down -1 percentage point). On a regional basis, the Northeast fell -1 point to 42, the West was steady at 30, the Midwest jumped +5 points to 46, and the South was up +1 point to 36. Overall, soft demand from strained affordability and elevated new home inventories continues to hamper builder sentiment.
• The National Association of Realtors (NAR) reported that Pending Home Sales rose +1.8% in February after the prior month’s -1.0% drop (revised lower from -0.8%). That was far above Wall Street expectations for a -0.6% decrease. On a non-seasonally adjusted basis, the year-over-year rate of change in sales slipped -0.8%, up from the prior month’s -1.4% annual rate (revised down from -1.2%). The decline was mixed across census regions: the Midwest rose +4.6%, the West was up +0.9%, the Northeast was down -3.6%, and the South was up +2.7%. Sales decreased year-over-year in the Northeast and Midwest but increased in the South and West. Northeast pending home sales saw the biggest annual decline at -12.1%. “The slight gain in pending contracts appears to be driven by improved affordability conditions,” said NAR Chief Economist Dr. Lawrence Yun. “However, those conditions could reverse if higher oil prices lead to an uptick in mortgage rates,” he added.
• The Commerce Department reported New Home Sales for January sank -17.6% month-over-month to a seasonally adjusted annual rate of 587,000 units versus a -6.8% drop of 712,000 units the prior month (revised lower from a -1.7% decline of 745,000 units). The data series tends to be volatile month-over-month and are often revised. Wall Street was expecting a -2.7% decline to 722,000 units. New Home Sales remain far below the recent peak of over 1 million units in August 2020, but are running above the pre-pandemic average of 600,000. Year-over-year, sales of new homes were down -11.3% following a -2.3% annual rate the prior month. The months of supply at the current rate of sales was 9.6, up from 8.0 the prior month and 9.0 months a year ago. By region, for the month sales fell -8.1% in the South, -44.7% in the Northeast, -33.9% in the Midwest and -21.6% in the West. The Median New Home Price decreased -6.8% to $400,500 from the prior year.
• Weekly MBA Mortgage Applications sank -10.9% for the week ending March 13, after rising +3.2% the prior week. The Purchase Index inched up +0.9% after advancing +7.8% the prior week. The Refinance Index plunged -18.5% after ticking up +0.5% the prior week. The average 30-Year Mortgage Rate rose to 6.30% from 6.19% the prior week.
• Weekly Initial Jobless Claims were down -8,000 to 205,000 for the week ending March 14, which was better than expectations for 215,0000. The prior week was unrevised. The number of people already collecting unemployment claims (i.e., Continuing Claims) rose +10,000 to 1,857,000 for the week ending March 7, which was worse than expectations for 1,852,000. The prior week’s reading was revised lower to 1,847,000 from 1,850,000.

Asset Class Performance

Source: Bloomberg.
Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange-traded funds recommended by The Retirement Planning Group. The performance of those funds may be substantially different from the performance of the broad asset classes and to proxy ETFs represented here. US Bonds (iShares Core US Aggregate Bond ETF); High‐Yield Bond (iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (Vanguard Total International Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 Value ETF); Mid Growth (iShares Russell Mid-Cap Growth ETF); Mid Value (iShares Russell Mid-Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares US Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by 24% US Bonds, 10% International Bonds, 6% High Yield Bonds, 13.8% Large Growth, 13.8% Large Value, 3.6% Mid Growth, 3.6% Mid Value, 1.2% Small Growth, 1.2% Small Value, 16.8% International Stock, 4.2% Emerging Markets, 1.8% Real Estate.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.