Oil Nears $100, S&P 500 Hits 2026 Low, FOMC Countdown
A week where the oil crisis escalated from shock to structural risk. Brent closed above $100, equities posted fresh lows, and stagflation entered the vocabulary.
Published 2026-03-14
What Moved This Week
The Strait of Hormuz crisis deepened this week. Tanker traffic through the strait remained at a near standstill as the US-Iran conflict entered its third week, and the market shifted from pricing a temporary disruption to pricing a structural one.
Oil dominated the tape. WTI crude climbed through the week, settling Friday at $98.71, up over 50% from pre-conflict levels near $63. Brent closed near $103.57, marking the second consecutive session above the $100 handle. The IEA's record 400-million-barrel coordinated reserve release on Wednesday briefly steadied prices, but the rally resumed Thursday as analysts noted that reserves address the symptom, not the structural supply risk. On Friday, the US temporarily lifted sanctions on Russian oil stranded at sea, allowing those cargoes to ship through April 11. Russia produces around 10 million barrels per day, but the Hormuz closure removes 13–14 million barrels, so the sanctions relief barely moved the needle.
Equities buckled under the weight. The S&P 500 fell 1.52% on Thursday and shed another 0.61% Friday to close near 6,625, a new 2026 low and the first three-week losing streak in roughly a year. The Nasdaq 100 ended Friday near 24,338. The Dow dropped to 46,519. Stagflation comparisons to the 1970s gained traction as oil-driven inflation concerns collided with a slowing growth backdrop.
February US CPI, released Wednesday, came in at 2.4% year-over-year with core at 2.5%, matching expectations. But markets treated the print as backward-looking. The oil shock hadn't hit the data yet, and traders are already watching March figures for the real impact.
The dollar strengthened on safe-haven flows, with the DXY pushing above 100.5. EUR/USD slipped to 1.1413. USD/JPY pushed above 159.7 as the rate differential (3.50% vs 0.75%) overpowered the yen's traditional safe-haven bid.
Gold held above $5,000 but pulled back from midweek highs, trading near $5,020 by Friday as dollar strength weighed on the metal. The DAX shed 0.78% Friday to close near 23,370 after an early-week IEA-fueled rally faded. The FTSE 100 slipped 0.43% to 10,242.
Bitcoin traded around $71,400, largely sideways as crypto sat out the geopolitical trade.
Key Moves
WTI $98.91 / Brent $103.57, second close above $100
~$5,020 (pulled back from midweek $5,170+)
6,625 (−1.6% weekly, new 2026 low)
24,338 (fell 4.2% weekly)
1.1413 (fell 0.6% as dollar strengthened)
159.74 (rose 1.2%, US-Japan interest rate gap driving yen lower)
~$71,400 (sideways)
Week Ahead
Next week is the biggest central bank week of 2026 so far.
The Federal Reserve announces its rate decision Wednesday, March 18. Markets widely expect a hold at 3.50–3.75%. The real focus is on the updated rate projections and economic outlook, the first set of Fed forecasts to incorporate both the Iran conflict and tariff shocks. Traders will be watching whether the median dot shifts from one cut to zero, and whether the committee signals concern about oil-driven inflation feeding into the broader economy. With Brent above $100 and stagflation fears rising, the tone of the statement matters as much as the rate itself.
The Bank of Japan decides Thursday, March 19. A rate hike is considered unlikely at this meeting, with April seen as more probable. The yen continues to weaken toward 160 as the US-Japan rate differential overpowers any safe-haven demand.
The Bank of England also decides Thursday. A hold is expected as the BOE maintains its cautious approach amid imported energy inflation.
Friday brings flash PMIs for the Eurozone, UK, and US. These will provide the first look at March business activity and should capture early impacts from the oil supply disruption.
US retail sales data drops Monday, providing a consumer spending health check as tariff and conflict uncertainties weigh on sentiment.
Instrument Spotlight
Gold has been one of the defining trades of 2026. After breaking $5,000 for the first time in late January and peaking near $5,589 on January 28, the metal has spent the last six weeks consolidating in a range between roughly $5,000 and $5,250.
The structural drivers remain intact. Central banks bought an estimated 60 tonnes per month through late 2025 and early 2026, roughly 50% above the pre-2022 average of around 40 tonnes. Gold ETF inflows hit $89 billion in 2025. And the Iran conflict adds a fresh layer of safe-haven demand on top of an already bullish structural backdrop.
This week tested that thesis. Gold held above $5,000 but pulled back from midweek levels near $5,170 to around $5,020 as the dollar strengthened sharply, with the DXY pushing above 100 for the first time in months. In previous cycles, a firmer dollar typically pressured gold lower. The pullback was modest, suggesting the safe-haven bid is absorbing some of the dollar headwind, though it wasn't strong enough to push gold higher outright.
Traders watching gold are monitoring two levels. To the upside, a sustained move above $5,250 would bring the January all-time high of $5,589 back into focus. To the downside, the $5,000 psychological floor has held on every test since late January.
The FOMC decision next Wednesday is the near-term catalyst. If the rate projections signal fewer cuts, the dollar could strengthen further and pressure gold. If the committee acknowledges oil-driven inflation risks without tightening, gold could benefit from the uncertainty. The metal tends to perform well when monetary policy feels stuck between competing pressures, which is exactly where the Fed finds itself now.
Trading Insight: Not All Crises Move Markets the Same Way
Traders often assume that risk-off means the same trade every time: buy gold, buy yen, sell equities. This week showed why that shortcut can be expensive.
During the 2020 pandemic crash, the yen and US Treasuries were the dominant safe havens. Gold initially sold off as traders liquidated everything for cash. During the 2022 rate shock, Treasuries themselves were the source of risk, so money flowed into the dollar and short-duration instruments instead.
This week's pattern was different again. Gold slipped to around $5,020 as the dollar rallied. The yen weakened because the US-Japan rate gap (3.50% vs 0.75%) overpowered the typical flight-to-safety bid. Bitcoin traded sideways around $72,000–$73,000. The Canadian dollar strengthened as a petrocurrency.
The lesson: every crisis has its own safe-haven fingerprint. Geopolitical oil shocks favor gold and commodity currencies. Credit crises favor Treasuries and the yen. Pandemic-style liquidity panics favor cash above all else. Knowing which type of crisis you're in matters more than knowing that a crisis is happening.
Stoic Reflection
“Make the best use of what is in your power, and take the rest as it happens.”
— Epictetus
On Wednesday, the IEA announced a 400-million-barrel reserve release and oil swung nearly 5% in a single session. On Friday, the US lifted sanctions on Russian oil stranded at sea, and prices barely flinched. No chart pattern predicted either headline. No indicator flagged them.
Traders who had pre-set stop losses on their oil positions before these announcements didn't need to react to the headlines. Their plan already accounted for the possibility of a sharp move in either direction. Traders who were sizing based on what they could afford to lose, not what they hoped to gain, didn't lose sleep over whether Brent would hold $100 or push to $110.
That's what Epictetus means in practice. You can't control when a strait gets shut down, when reserves get released, or when sanctions get lifted. You can control whether you have a plan for when it happens.
Related Reading
Instruments Mentioned This Week
Questions Traders Are Asking
How does the Strait of Hormuz closure affect forex markets?
The Strait of Hormuz handles roughly 20% of global daily oil supply. When transit is disrupted, oil prices spike, which pushes up inflation expectations and shifts central bank rate paths. Commodity-linked currencies like CAD and NOK tend to strengthen, while oil-importing economies like Japan and the Eurozone face currency pressure from higher import costs. With Brent now above $100, the impact is showing up in everything from EUR/USD to the dollar index.
Why did the US lift Russia oil sanctions, and did it work?
The US temporarily authorized Russian crude and petroleum products loaded on vessels as of March 12 to ship through April 11. The goal was to expand global supply while the Strait of Hormuz remains closed. But Russia produces around 10 million barrels per day, while the Hormuz closure removes 13–14 million barrels from transit. The sanctions relief barely moved oil prices on Friday, suggesting the market views the disruption as larger than any single workaround can address.
How do oil shocks feed into inflation and central bank policy?
Higher crude prices push up transportation and manufacturing costs, which eventually show up in consumer prices. February CPI came in at 2.4%, but that data predates the worst of the oil surge. If crude stays near $100, March and April inflation prints could run hotter, which complicates the Fed's rate-cut timeline. That's why the March 18 FOMC rate outlook matters so much: it will indicate whether the Fed sees the oil shock as transitory or a longer-term inflation risk.
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