- The week of March 16-20 had oil price spike, Federal Reserve interest rate decision and Strait of Hormuz closure as the most impactful events
- The Middle East war has the single-largest influence in market sentiment currently and that will likely carry on into next week
- Federal Reserve's interest rate decision, PCE inflation figures and corporate earnings from Nike, Carnival and McCormick will also influence the new week
The third week of March 2026 tested the resilience of global financial markets amid renewed geopolitical uncertainties and heightened attention to energy supply chains. Following a spell of relative stability, the period from March 16 to 20 was dominated by developments in the Middle East, which garnered more focus from investors than the usual corporate earnings releases.
Geopolitical Friction and the Oil Factor
The primary catalyst for market movement this week was the escalating tension in the Persian Gulf. Concerns over maritime traffic through the Strait of Hormuz remained at the forefront, driving Brent crude prices back above $100 per barrel early in the week. This energy shock acted as a double-edged sword. It gave energy-heavy indexes a big lift, but it also brought back worries about sticky inflation.
Fed Holds Interest Rates, With a Hawkish Tone
Wednesday was defined by the Federal Reserve’s rate decision and a remarkable session in Asian markets. The Nikkei 225 surged 3.15% to reach 55,318 points, its strongest single-session performance of the week, bolstered by data showing February exports exceeded analyst expectations.
Up by 5.04%, South Korea’s KOSPI hit 5,925.03 because cheaper energy eased pressure on highly dependent markets. With Iraq restarting oil shipments through Turkey, Brent crude dipped 2.2%, settling just under $101 a barrel. While one shift lifted equities, the other weighed on crude prices across global trading.
Pain hit hardest on Thursday. Down 3.38%, the Nikkei 225 landed at 53,372, wiping out all of Wednesday’s gains, as oil price jumped amid new strikes against Middle Eastern infrastructure while US inflation numbers came in stronger than forecast. The Bank of Japan maintained its rates, though dissenting voices called for a modest hike. Board member Hajime Takata dissented for the second consecutive meeting, proposing a 25-basis-point hike.
Even as markets wobbled, the FTSE 100 held ground, down only 0.2%, settling near 10,254, thanks largely to strength in oil and gas stocks. Japan’s Nikkei 225 experienced sharper swings due to import sensitivity, ending lower by nearly 2% amid concerns over prolonged oil disruption.
US equity markets trimmed losses, with the S&P 500, the Nasdaq and the Dow Jones Industrial Average closing marginally lower after Israeli Prime Minister Netanyahu indicated assistance in reopening the Strait of Hormuz.
What to Watch Next Week
The week of March 23–27 carries a dense calendar with significant market-moving potential. US February PCE inflation data lands Friday and will either validate or challenge Powell’s one-cut projection. Eurozone flash PMI data on Monday will provide the first read on March manufacturing conditions under $100+ oil.
The Bank of England meets Thursday. Traders are keeping an eye on whether it follows the Fed’s hawkish path or goes its own way. Corporate earnings from Nike, Carnival, and McCormick will also draw attention.
Israeli Prime Minister Benjamin Netanyahu’s Hormuz reopening signal suggests that the diplomatic window will either get bigger or smaller in terms of geopolitics. This one move holds more sway than any other heading to month-end. Every market twitch depends on which way that door swings.
