Stocks Correcting Amid Global Tensions: Bending, Not Breaking

Market Commentary – March 9, 2026

Last week, there were a number of surprising events and unexpected actions in the Middle East. Tensions escalated as the U.S. and Israel continued their bombardment of Iran which, in turn, attacked several neighboring countries.

A U.S. submarine torpedoed and destroyed an Iranian warship – the first such sinking in more than 40 years, and only the third such event since World War II. Hezbollah in Lebanon exchanged attacks with Israel. Concerns remain that oil tankers cannot move through the Strait of Hormuz (a narrow waterway that carries about 20% of the world’s oil supply) as insurance costs have soared. With oil not moving, storage facilities are filling up, leading to several countries announcing cuts in production. All this turmoil is causing oil prices to rise sharply with WTI crude oil moving to nearly $120 overnight Sunday but falling back to near $100 in early Monday morning trading.

So far, stocks have weakened modestly, down only 3.7% off the high amid the dual pressures of surging energy costs and a surprisingly soft U.S. jobs report, which was reported last Friday (nonfarm payrolls declined by 92,000 in February, with unemployment ticking up to 4.4%). The double hit pushed the S&P 500 lower, exposing broader market vulnerability. While the index has held near recent support levels so far, the combination of oil driven inflation fears and slowing growth signals heightened downside risk – markets appear more fragile. We believe volatility is likely to persist, and any escalation in the Persian Gulf may potentially tip the balance toward further selling. This volatility is normal during mid-term election years where markets can correct up to 15%-20%.

WTI Crude Oil Futures Push Past $80 Opening Risk To Push Higher

WTI crude oil prices pushed past resistance at $80, hitting resistance at $90 on Friday. With oil not moving through the Strait of Hormuz, WTI crude oil is trading early Monday morning near $100 after hitting $119 in overnight trading, the highest level since 2022. The risk is crude oil prices remain elevated and could continue to rise with resistance levels near $130-$150. The impact on the economy is dependent on how long oil prices remain elevated. Elevated oil prices risk continued pressure on equity prices.