Weekly Market Update

Written by World Investment Advisors | Mar 9, 2026 1:00:00 PM

Key areas of focus

Inflation is back in focus this week with the February CPI and January PCE reports due. However, neither will reflect last week’s spike in oil. Investors also get the University of Michigan Consumer Sentiment survey, the JOLTS job openings report, the NFIB small business index, and February housing data, making for a very busy economic week.
Escalating military conflict in the Middle East pushed oil prices to their highest levels since September 2023. U.S. government bond prices fell, sending yields higher, as rising oil added to inflationary pressures. The 10-year Treasury yield rose about 18 basis points to 4.15% after tumbling to its lowest level in more than four months. Rising oil prices signal higher costs for businesses and consumers, which can increase inflation and pressure central banks to maintain or raise interest rates, while higher Treasury yields increase borrowing costs across the economy.
February’s payrolls report surprised markets with a net loss of 92,000 jobs versus expectations of a roughly 50,000 gain. This marked the third jobs decline in five months. December and January figures were also revised down by a total of 69,000, highlighting ongoing labor market softness.

Week in review

Markets ended the week noticeably lower as investors digested a surge in oil prices tied to Middle East supply disruptions and a weaker-than-expected Payrolls report. Oil prices jumped early in the week following escalating tensions with Iran. Despite the headlines, U.S. equities were flat Monday as investors assessed the economic fallout. Meanwhile, the ISM Manufacturing survey declined slightly, with weaker new orders and production offset by stronger employment and rising prices. By Tuesday, both stocks and bonds moved lower as oil continued to climb and the 10-year Treasury yield rose, raising concerns that higher inflation could weigh on global growth. Wednesday brought some relief, with equities moving higher as oil prices stabilized. The ISM Services index also surprised to the upside, reaching its highest level since mid-2022. The tone shifted again late in the week. On Thursday, Nonfarm productivity came in above expectations, re-igniting fears that AI-driven productivity improvements could lead companies to need fewer workers. Friday’s Payrolls report came in weaker than expected, showing a decline of 92K jobs with unemployment rising to 4.4%.

Spotlight

Market volatility rose sharply last week, with the CBOE Volatility Index (VIX) climbing to 29.49 from 19.86 the week prior, its highest level since last April. The main driver was the escalating conflict with Iran, which controls the Strait of Hormuz, where roughly 20% of global oil supply flows. Disruptions to shipping, damaged energy infrastructure, and production cuts in Iraq tightened global supply and pushed energy markets higher. As a result, Brent crude oil surged about $20 per barrel last week to above $92, while Dutch natural gas prices jumped more than 65% amid supply shutdowns in Qatar. The big unknown now is how severe and how long these disruptions may last. Higher oil prices typically push inflation higher and slow economic growth. Estimates from Goldman Sachs suggest every $10 increase in oil could reduce U.S. GDP growth by roughly 10 basis points. With the S&P 500 trading near 22x earnings, even modest uncertainty can lead to outsized market reactions. Energy stocks outperformed last week, while 10-year Treasury yields rose about 18 basis points to 4.15%.

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Style & Market Cap

Sources

1. ISM Manufacturing
Institute for Supply Management, Institute for Supply Management (ISM) Purchasing Managers Index (PMI) Manufacturing Report, retrieved from ISM, https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/pmi/February/

2. ISM Services
Institute for Supply Management, Institute for Supply Management (ISM) Purchasing Managers Index (PMI) Services Report, retrieved from ISM, https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/services/february/

3. Nonfarm Productivity
U.S. Bureau of Labor Statistics, Productivity, retrieved from U.S. Bureau of Labor Statistics; https://www.bls.gov/news.release/prod2.nr0.htm

4. Payrolls/Jobs Report
U.S. Bureau of Labor Statistics, Employment Situation Summary, retrieved from U.S. Bureau of Labor Statistics; https://www.bls.gov/news.release/empsit.nr0.htm

5. Goldman Sachs Estimated Impact to GDP

Goldman Sachs Research, Oil shock math: Goldman models the hit to CPI and GDP, retrieved from Seeking Alpha; https://seekingalpha.com/news/4560294-oil-shock-math-goldman-models-the-hit-to-cpi-and-gdp

Market Data
Morningstar Direct using Morningstar Indices

Authors:

Anthony Silva, CFA®

Senior Director of Strategy Management

World Investment Advisors, LLC

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