Investopedia Markets News (all except PF)

There are signs of investor caution out there. Some experts think it isn't enough.
Credit: Michael Nagle / Bloomberg via Getty Images

Key Takeaways

• The S&P 500 could fall 10% to 15%, Ed Yardeni of Yardeni Research said.
• Investors should brace themselves for "more violent and frequent shocks" to the global economy this year, according to Allianz chief economic advisor Mohamed El-Erian.

Stock-market jitters are back. But some experts think investors aren't jittery enough.

Broad market indexes declined to start the week, with the Dow and the S&P 500 in the red as U.S. crude prices surged past $100 per barrel. A market gauge that measures investor sentiment known as the Cboe Volatility Index, or the VIX, briefly kissed the 30 level—a reading indicating fear—for the first time since April, when global stock markets crashed on the heels of the Trump administration unveiling its trade policy. CNN's Fear & Greed Index recently pointed to "extreme" fear.

For all of the negative and potentially lasting implications of a prolonged war in Iran, investors appear largely convinced—as measured by major banks clients' equity positions—that the dislocation in U.S. stocks will prove fleeting. Some market experts, however, say investors aren't pricing in the possibility of outcomes like a correction in U.S. stocks or a recession.

WHY THIS MATTERS TO YOU

Investors appear to have become accustomed to brief stock market shocks, which may lull them into a false sense of security at exactly the wrong time.

"Overall equity positioning in our reading has dipped slightly below neutral," Deutsche Bank's research team including Parage Thatte and Binky Chadha said in a research report on Friday. "A profusion of shocks in the last 4 years," they wrote, "has inured investors into not reacting to potentially short-term disruption."

On prediction markets, there's some caution—but not outright fear in stocks. Polymarket bettors place the highest probability, or about 74%, on the S&P 500 ending the month at above 6500, implying a less than 5% decline from recent levels.

Investors appear to be placing an 80% probability that the global economic shock will be "temporary and reversible," Mohamed El-Erian, chief economic advisor of Allianz, said on CNBC Monday morning. He puts those odds at 50%, saying that the global economy is likely to be subject to "more violent and more frequent shocks" this year.

DataTrek's Nicholas Colas and Jessica Rabe in a note yesterday said "oil prices are the lynchpin to the market," and that historically crude prices quickly doubling has meant that "a recession is usually not far behind."

The implications of supply-chain disruptions appear to be underestimated. Westwood CIO of multi-asset strategies Adrian Helfert in a note Monday said the closure of the Strait of Hormuz threatens food and fertilizer supplies. Roughly one-third of the world's fertilizer and almost half of globally exported urea, a high-nitrogen fertilizer, moves through that channel, he said, which would "disrupt spring planting" across major agricultural economies.

Ed Yardeni of Yardeni Research last week said there could be a 10% to 15% pullback in the S&P 500, with the latter occurring in the event the Islamic Revolutionary Guard Corps is successful in using drones and speedboats to effectively block the strait.

On Monday, oil prices surged above $100 a barrel for the first time since 2022.
Credit: Eddie Seal / Bloomberg via Getty Images

Key Takeaways

• Oil prices were around $100 a barrel today as the war in Iran continued to disrupt global oil flows and production throughout the Middle East.
• Persistent oil price pressures could aggravate inflation and detract from economic growth; some analysts say its possible prices climb to levels that could tip the U.S. into a recession.

The price of oil continued to surge Monday as the war in Iran stretched into its second week, raising questions about its effect on consumers, markets and the global economy.

Oil futures jumped to a nearly four-year high Sunday evening. Brent crude, the global benchmark, and West Texas Intermediate, the U.S. benchmark, both approached $120 a barrel overnight before retreating to around $100 on Monday morning. Oil prices are up about 40% since the U.S. and Israel began strikes late last month.

Iran has launched missile and drone strikes on oil infrastructure in neighboring countries—and all but shut down the Strait of Hormuz, through which about a fifth of the world’s oil and liquefied natural gas passes on its way out of the Middle East. Over the weekend, some U.S. and Israeli strikes targeted energy assets in Iran. 

Why This Matters

While the U.S. economy is more insulated from oil price shocks now than it once was, experts say a persistent rise in prices still threatens to slow growth and boost inflation. Those pressures could compound the stresses of a shaky labor market and uncertainty about AI-driven disruption.

Bank of America analysts in a note on Friday warned that a persistent rise in oil prices above $100 a barrel “would probably take more than 60 [basis points] off GDP growth.” A sustained period of high prices, they wrote, could aggravate inflation, pressuring low-income consumers, and weigh on the stock market, tightening financial conditions for the high-income consumers who have recently been propping up the economy.

BofA sees even greater risk if prices continue to climb. “A doubling in oil prices, unlikely as it seems, could cause a recession,” the analysts wrote. Prices would need to rise another 45% to about $140 a barrel to have doubled since the start of the war.

Analysts at Maquarie reportedly warned in a note on Monday that Iran's closure of the Strait of Hormuz, if it lasts a few more weeks, could push oil prices to $150 a barrel. Other experts have forecast less severe outcomes. Analysts at Rystad Energy said it would take a four-month disruption to nudge prices as high as $135. Prices would likely top out at $110 in the event of a two-month crisis, they said.

Oil producers in the United Arab Emirates, Kuwait, and Iraq—among the world’s largest exporters—have begun cutting production to avoid filling storage facilities to capacity. Saudi Arabia has reportedly begun adjusting production levels and redirecting crude to export facilities on the Red Sea to bypass the Strait of Hormuz. Finance ministers from the Group of 7 said after a meeting Monday they could release oil from their strategic reserves to offset disruptions.

U.S. consumers are seeing the impact of higher oil prices. The national average gas price has risen 16% in the past week, its sharpest rise since Russia invaded Ukraine in early 2022.

Rising gas prices could add pressure on the Trump administration to dial down tensions in the Middle East. Oil price shocks factor into consumer prices directly in the form of higher prices at the pump, and indirectly by raising shipping costs. The cost of living is expected to be a key issue for voters in November’s midterm elections, which could determine control of Congress and, thus, whether Democrats can push back on President Donald Trump's domestic and foreign policy agendas.

Higher oil prices are also weighing on the stocks of companies for which fuel is a major cost and global instability a headwind to demand. United Airlines (UAL) and Delta Airlines (DAL) are down about 20% and 14%, respectively, since the war began. Carnival Corp. (CCL) and Norwegian Cruise Line Holdings (NCLH) have both lost more than 20% of their value over the same period. 

People walk by the New York Stock Exchange (NYSE) in the financial district on March 09, 2026, in New York City.
Credit: Spencer Platt / Getty Images

Key Takeaways

• Economists see rising risks to inflation and the job market as the war in Iran continues to disrupt energy supplies.
• The events have parallels with, and significant differences from, the oil shock of the 1970s that led to "stagflation."
• Economists said the economic shock to inflation and economic growth could fade if the war ends quickly.

War in the Middle East, surging oil prices, and a stagnant labor market: The economic situation is starting to feel like the 1970s.

The outlook for the economy worsened over the weekend as the U.S. and Israel continued to strike Iran. Iran kept the Strait of Hormuz virtually closed, bottling up some 20% of the world's crude oil supply. Fears grew that the war and its disruption to energy supplies could drag on, as leaders on both sides of the conflict showed no signs of backing down.

The prospect of a prolonged war raised the chances of the U.S. experiencing a period of high inflation and slow economic growth called "stagflation." The last major bout of stagflation took hold in the 1970s during all-too-similar conditions, when a conflict between the U.S. and Iran caused energy prices to skyrocket. Whether stagflation takes hold again depends on how long the current war goes on, economists said.

"The U.S. economy now faces its second stagflation-like shock inside a year," Sal Guatieri, senior economist at BMO Capital Markets, wrote in a commentary. "On the heels of the trade war, the Iran war will lift inflation and bond yields, disrupt energy supply chains, rattle investor and business confidence, and weaken global demand."

What This Means For The Economy

Stagflation reduces living standards for consumers by hurting the job market, which reduces incomes, and raises prices, reducing the dollar's buying power.

Economists expect the war to both to lift prices and damage a job market that was already weakening and lost 92,000 jobs in February before the war began. Based on oil prices, the national average for gallon of gasoline is likely to rise to $4 from $3 prewar, forecaster at Pantheon Macroeconomics estimated.

"Drivers soon will be paying $4 per gallon for gas, squeezing real disposable income and hitting jobs," Samuel Tombs, chief U.S. economist at Pantheon, wrote in a commentary.

Economists at Deutsche Bank said there were a number of differences between today and the 70s, when inflation surged into double-digits, gasoline was rationed, and the economy plunged into several painful recessions.

For one thing, the U.S. is now a major producer of crude oil in its own right. For another, consumers expect lower price increases in the future, reducing the risk of a wage-price spiral turbocharging inflation.

"Clearly whether history repeats itself all depends on how long this conflict lasts," Jim Reid, global head of macro research at Deutsche Bank wrote in a commentary.

The rising risks to consumer prices and the job market could put officials at the Federal Reserve in a dilemma as they pursue the central bank's dual mandate to keep both inflation and unemployment low. Even before the war, Fed policymakers were divided about whether to keep the fed funds rate higher for longer to fight inflation, or lower it significantly to encourage hiring.

"Some officials may argue for looking through a supply shock and supporting a weakening labor market. Others may warn against repeating past mistakes by easing too early," Daniella Hathorn, senior market analyst at Capital.com, wrote in a commentary. "The likely result? A more divided Fed, greater policy uncertainty, and increased volatility across both bond and equity markets."

One person apparently unconcerned about the spike in oil prices was President Donald Trump.

"Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace," he posted on social media Sunday. "ONLY FOOLS WOULD THINK DIFFERENTLY!"

Indeed, some economists saw a possibility of things returning to normal—if the war ends quickly. Reid noted that oil markets "aren't pricing in a sustained shock," with oil futures 12 months ahead trading at $75 a barrel.

And forecasters at Oxford Economics kept their forecast for interest rates and equities unchanged, predicting the S&P 500 stock index would reverse its recent downturn once the war ended.

"The impact on U.S. GDP and inflation should be modest," John Canavan, lead analyst at Oxford Economics, wrote in a commentary, "assuming a limited military campaign."

Shares of Ticketmaster parent Live Nation Entertainment rose Monday.
Credit: Jonathan Raa / NurPhoto via Getty Images

Key Takeaways

• Reports saying Live Nation has reached a settlement with the Justice Department that could end a federal case against the entertainment and ticketing giant lifted the company's stock today.
• While investors cheered the apparent end to a round of federal scrutiny, the company may yet face more issues from state officials.

Investors are cheering news that stands to boost a ticketing giant today.

Live Nation Entertainment (LYV) has reached a settlement with the Justice Department that would not force it to divest Ticketmaster, according to reports. Investors are cheering the development, with shares of Live Nation up about 6% Monday following several media reports saying it that it had reached a deal.

Why This Matters to Investors

Investors often cheer legal settlements to which companies they follow submit. That's because the removal of uncertainty—even if it comes at a price they aren't happy with—can be welcome, eliminating an overhang. In today's case, it may be that Live Nation will still come under scrutiny at the state level.

The Justice Department in 2024 filed an antitrust lawsuit accusing Live Nation of monopolizing the concert ticketing and promotion market, which the company denied. The government sought to force the company to sell the Ticketmaster unit. A deal was announced Monday by lawyers working the trial associated with the case, the Associated Press reported.

Live Nation will divest some venues as part of the settlement, according to Fox Business. Neither the Justice Department nor Live Nation responded to Investopedia's requests for comment in time for publication.

The New York Times said Live Nation "would agree to change how it makes ticketing deals with venues, allowing those businesses to use multiple vendors to sell tickets to fans, rather than work with Ticketmaster exclusively." Live Nation "would allow touring artists to use other promoters when performing in its amphitheaters," it wrote.

Some states may continue to seek regulatory action against the company, NBC News and other media outlets reported. "We will keep fighting this case without the federal government, so that we can secure justice for all those harmed by Live Nation's monopoly," New York Attorney General Letitia James said.

Including today's gains, Live Nation shares are up about 16% year-to-date.

The S&P 500 changes will go into effect in two weeks.
Credit: Spencer Platt / Getty Images

Key Takeaways

• Shares of Lumentum and Coherent are rising to start the week following the announcement on Friday that the companies would be added to the S&P 500 later this month.
• Nvidia recently announced $2 billion investments in both companies.
• EchoStar and Vertiv will also be joining the benchmark index.

Four companies—including two part-owned by AI chip giant Nvidia—are set to join the S&P 500 later this month.

S&P Dow Jones Indices on Friday said Coherent (COHR), EchoStar (SATS), Lumentum (LITE) and Vertiv (VRT) would be added to the benchmark index of U.S. companies before the start of trading on March 23. They'll replace Lamb Weston (LW), Match Group (MTCH), Molina Healthcare (MOH) and Paycom Software (PAYC).

Why This Matters to Investors

Inclusion in the S&P 500 is generally seen as a good thing for a company and its stock, in part because many investors' portfolios include exchange-traded funds that track the index, and those funds must buy shares of the companies in the wake of their addition.

Nvidia (NVDA) earlier this month reported stakes in photonics and laser makers Coherent and Lumentum, giving those companies' shares a boost. Those investments, valued at the time at $2 billion apiece, came on the back of strong performance for both stocks this year.

Shares of Coherent were recently up more than 3%, while Lumentum's shares rose about 11%. Nvidia's shares were up more than 1%. Read Investopedia's full coverage of today's trading here.

Wall Street analysts generally expect both Lumentum and Coherent to keep rising. The Street's mean price target on the former is particularly bullish, representing about 20% upside to recent prices according to Visible Alpha's survey.

The latest changes were part of a raft of updates S&P Dow Jones Indices announced last week. That included changes to the S&P 100, a subset consisting of the larger companies contained in the broader measure, including the addition of Applied Materials (AMAT), GE Vernova (GEV), Lam Research (LRCX) and Micron (MU), and the removal of American International Group (AIG), Metlife (MET), Paypal (PYPL) and Target (TGT).

Novo Nordisk backed out of a deal with Hims & Hers Health last year over concerns with the online pharmacy's compounding policies
Credit: Michael Siluk / UCG / Universal Images Group / Getty Images

Key Takeaways

• Hims & Hers Health shares popped Monday after the telehealth company announced a new partnership with Novo Nordisk.
• The deal will allow Hims & Hers to sell the Danish drugmaker's weight-loss products through its platform.

Hims & Hers Health stock is soaring to start the week.

Shares of the telehealth provider were up nearly 37% Monday morning after Hims & Hers (HIMS) said it struck a deal with Novo Nordisk (NVO) to sell the Danish rival's weight-loss drugs on its platform. Novo Nordisk's U.S.-listed shares were up 1% recently.

Hims & Hers said Monday that Ozempic and Wegovy will become available through its platform later this month. Novo Nordisk also said it's dismissing its lawsuit against Hims over its sale of compounded medications.

Why This Matters to Investors

The companies struck a deal to sell Novo's weight-loss products through Hims & Hers' platforms last year, but Novo pulled out over concerns with the online pharmacy's compounding practices. Monday's announcement could point to renewed confidence in Hims.

Last month, Hims & Hers surprised the weight-loss drug industry by launching its own compounded version of a semaglutide pill, the active ingredient in Novo's Wegovy. Novo's weight-loss pill was approved in December, and was not facing the sort of shortage that would allow compounding pharmacies like Hims to make and sell their own versions.

Novo attacked the launch, and days later Hims pulled the drug as Novo filed a lawsuit seeking to permanently stop Hims from selling its compounded weight-loss medications.

Despite Monday's gains, Hims & Hers shares have still lost roughly two-thirds of their value from their highs last February. Novo Nordisk shares are down about 50% over the past 12 months.

News of the day for March 9, 2026

The Dow Jones Industrial Average posted its biggest weekly loss since April last week.
Credit: Timothy A. Clary / AFP / Getty Images

Stock futures are sharply lower Monday as investors grow increasingly concerned about the impact of the war in the Middle East on the global economy; Oil prices jumped to their highest level in nearly four years as the war hampers the commodity's supply chain; Hims & Hers Health stock is surging on reports of a deal with Novo Nordisk to sell its weight loss products on the platform; Kalshi and Polymarket are reportedly in talks for new funding rounds that would value the prediction markets at $20 billion each; and HP Enterprise is set to kick off a busy week of earnings. Here's what you need to know today.

Stocks Pointing Sharply Lower as Volatility Persists

Stock futures are tumbling this morning as investors assess the impact of the ongoing war and look ahead to a week of earnings reports and economic data. Futures tied to the Dow Jones Industrial Average, which posted its biggest weekly loss since April last week, were down 1.2% recently. Futures linked to the S&P 500 and the tech-heavy Nasdaq were each 1.1% lower. On Friday, the Dow sank 1% while the S&P 500 and Nasdaq fell 1.3% and 1.6%, respectively, in a volatile session that was also affected by a weaker-than-expected February jobs report. Crude oil futures surged above $100 per barrel for the first time since mid-2022 (more on that below), while gold futures dropped more than 1% to around $5,100 an ounce. Bitcoin was trading around $67,600 recently, up from overnight lows of about $65,600 but still well below the highs of $74,000 it posted last week. The yield on the 10-year Treasury note, which affects interest rates on all sorts of loans, was at 4.17%, up from Friday's close of 4.13%.

Oil Prices Soar as Iran Conflict Drags On

West Texas Intermediate futures, the U.S. crude oil benchmark, were up more than 12% recently, trading around $102 a barrel, after peaking at overnight highs around $119. The commodity is trading at its highest level in nearly four years as the war in Iran has hampered shipping through the key Strait of Hormuz, where much of the world's oil passes through in the Middle East. President Donald Trump said on social media Sunday that oil prices "will drop rapidly when the destruction of the Iran nuclear threat is over," and said higher prices are a "very small price to pay" for peace. The shock to oil prices is also raising gas prices, with the American Automobile Association's gas price tracker putting the national average at about $3.48 a gallon on Monday, up nearly 50 cents from the same time a week ago.

Hims & Hers Stock Jumps on Report of Novo Nordisk Deal

Shares of Hims & Hers Health (HIMS) are soaring after Bloomberg reported that the telehealth provider has reached a deal with Novo Nordisk (NVO) to sell the Danish drugmaker's weight loss drugs on its platform. The report said the companies could announce the agreement as soon as Monday. Last month, Hims & Hers surprised the weight loss drug industry by launching its own compounded version of a semaglutide pill, the active ingredient in Novo's Wegovy. Novo attacked the launch, and Hims pulled the drug as Novo filed a lawsuit seeking to stop Hims from selling its compounded weight loss medications. The companies had a deal to sell Novo's weight loss products previously, but Novo pulled out last year over concerns with the online pharmacy's compounding practices. Hims & Hers shares were up more than 40% in recent premarket trading, while Novo Nordisk's U.S.-listed shares rose 1%.

Kalshi, Polymarket Target $20B Valuations in New Fundraising Rounds

The two biggest prediction market providers, Kalshi and Polymarket, are looking to raise new rounds of funding, with each company looking to be valued around $20 billion, The Wall Street Journal reported over the weekend. In fundraising rounds late last year, the Journal reported, Polymarket was valued around $9 billion, while Kalshi said in December that it had secured a $1 billion funding round, putting its valuation at $11 billion. One of the people familiar with the new round's talks told the Journal that Kalshi recently surpassed $1 billion in annualized revenue. Kalshi operates its platform throughout the U.S., while Polymarket is unavailable in the U.S. The prediction markets have recently been criticized for allowing users to bet on outcomes like whether world leaders such as Iran's Supreme Leader Ali Khamenei would be ousted.

HP Enterprise Set to Report Earnings After The Bell

The latest quarterly earnings report from Hewlett Packard Enterprise (HPE), slated for release after the market closes today, will offer investors their latest data point on AI spending. The server maker's results and outlook each came in below estimates last quarter, amid concerns that the AI trade had left some tech firms overvalued and about whether the spending in the sector was sustainable. HP Enterprise kicks off a tech-packed week of earnings, with reports from Adobe (ADBE) and Oracle (ORCL) also scheduled to be released later this week. HP Enterprise shares, which through Friday's close were down 12% so far in 2026, were down about 1% ahead of the opening bell.

Software giant Oracle is scheduled to report quarterly results on Tuesday.
Credit: Justin Sullivan / Getty Images

Inflation will be in the spotlight this week.

Two major economic reports on prices are landing just ahead of next week’s key interest rate decision, providing fresh indicators on the cost of living as central bankers debate whether to further lower borrowing costs and investors eye energy prices. Existing-home sales and other housing data comes as economists are watching for improvements in that market.

Investors will also be evaluating momentum in the AI and software sectors, with Oracle, Hewlett Packard Enterprise, and Adobe set to report earnings this week. Dollar General leads a string of noteworthy retail earnings, while Tesla’s Chinese EV competitors are also on deck. 

Read to the bottom for our calendar of key events—and one more thing.

Inflation Reports Come as Fed Focuses on Prices

Recent indicators have sent mixed signals on the direction of prices. Wednesday’s release of the Consumer Price Index (CPI) for February arrives after that measure came in lower than expected in January. Later in the week, the release of the Personal Consumption Expenditures (PCE) index for January follows a December report that showed the closely watched inflation indicator rise higher than expected.  

The Federal Reserve is readying for its meeting next week. There is division among the central bank's members over whether to further cut interest rates after the central bank recently voted to keep them steady at its last meeting.

Several housing indicators are expected this week, with existing-home sales data coming as buyers have continued to shy away from the market. Housing starts and earnings from builder Lennar are also on the calendar. Investors will be watching trade data for the impacts of tariffs, and the latest consumer sentiment survey may show whether the recent Middle East turmoil is affecting spending trends.

Oracle, Adobe Earnings Keep Investor Eyes on AI Trade

Oracle's stock price has been more than cut in half from its September highs amid a rout in the software sector. But the cloud computing giant, set to report earnings this week, still has plans for expansion after it recently laid out plans to raise $50 billion to fund AI data center construction. Adobe’s report will also provide a look at the software sector’s strength. 

Hewlett Packard Enterprise’s report on Monday could also provide insight into AI spending.  Analysts said the company’s information technology products and services are likely to be in demand, but the company still issued a disappointing outlook earlier this year.

Dollar General’s report will give investors information on the retail sector, with the low-cost seller’s most recent report showing that it’s benefiting from price pressures in the economy. Soup maker Campbell’s, makeup seller Ulta, and pet supplies chain Petco are also reporting this week.  Competitors to Tesla in the Chinese EV markets, Li Auto and Nio, are also set to release earnings.

This Week’s Calendar

Monday, March 9

• Key Earnings: Hewlett Packard Enterprise (HPE), Casey’s General Store (CASY), Vail Resorts (MTN)

Tuesday, March 10

• Existing home sales (February)
• More Data to Watch: NFIB small business optimism index (February)
• Key Earnings: Oracle (ORCL), AeroVironment (AVAV), Nio (NIO)

Wednesday, March 11

• Consumer Price Index (February)
• More Data to Watch: Monthly U.S. federal budget (February)
• Key Earnings: Campbell’s (CPB), UiPath (PATH), Petco (WOOF)

Thursday, March 12 

• U.S. trade deficit (January)
• More Data to Watch: Initial jobless claims (Week ending March 7), Housing starts (January)
• Key Earnings: Adobe (ADBE), Dollar General (DG), Ulta Beauty (ULTA), Lennar (LEN), Dick’s Sporting Goods (DKS), Li Auto (LI)

Friday, March 13

• Personal Consumption Expenditures price index (January)
• More Data to Watch: Gross Domestic Product - first revision (Q4), Durable goods orders (January), Job openings (January), Consumer sentiment - preliminary (March)

One More Thing

As taxpayers file their returns this tax season, many are leaving a major credit on the table. Investopedia’s Elizabeth Guevara has more on a tax credit that one in five eligible taxpayers fails to claim. 

Stocks were volatile but only slightly lower as the war in Iran ramped up this week.
Credit: TIMOTHY A. CLARY / AFP via Getty Images

Key Takeaways

• The war in Iran did little to dent the stock market this week, underscoring a prevailing belief on Wall Street that disruption to energy markets will be short-lived and minimally impact the economy.
• Investors, however, may be underestimating the risks posed by instability within Iran and unanchored inflation expectations, some market watchers say.

War in the Middle East fueled a volatile trading week for stocks, but it wasn't as bad as it might have been. There are reasons for investors to worry about longer-term effects—to both markets and the economy.

Heading into Friday, the S&P 500 was down less than 1%—despite four days of conflict between the U.S. and Israel and Iran and a more than 20% jump in the price of oil. (Read Friday's full markets coverage here.) If that seems like a modest move, experts said, it could be because of optimism that things might not get much worse.

“What market participants are really looking at is: 'Is this going to translate through to things that affect economic growth and activity, particularly energy supply chains?'" said David Solomon, CEO of Goldman Sachs, to Bloomberg on Wednesday. “I think one of the reasons why markets are reacting the way they are is they're encouraged that there is strong support for trying to ensure that doesn't happen.”

Investors were mostly encouraged early in the week by the Trump administration’s efforts to calm energy markets. President Donald Trump suggested the operation could end in a matter of weeks, and offered financial and military support to facilitate the flow of oil tankers through the Strait of Hormuz. As the week went on, though, oil prices continued to rise as Iran targeted regional energy infrastructure throughout the region and tankers remained stranded on both sides of the strait. 

Why This Is Important

The stock market has charged through its fair share of turbulence in the past year—unpredictable trade policy, a weakening jobs market, uncertainty about the impacts of AI, and plenty of geopolitical shocks. The market's ability to weather the war in Iran will likely hinge on its resilience to rising oil prices.

Economists don't expect higher oil prices to have a large impact on the U.S. economy due to the country being the world’s top producer of both oil and natural gas. Goldman Sachs on Thursday forecast oil prices rising above $100 a barrel would cause a 0.6 percentage point increase in headline inflation and a 0.3 percentage point drag on GDP—relatively benign outcomes when compared to what's estimated for other national economies.

America's energy independence is one of the reasons Citigroup analyst Scott Chronert told CNBC on Thursday that U.S. markets can be "a bit of a safe haven" for global investors.

But other experts note several risks to U.S. resilience. Darren Peers, equity investment advisor at Capital Group, noted in a call with clients Tuesday that instability in Iran could impact global oil production—not just transport—in the medium- and long-term, which are the most important timelines for investors to consider. “It's plausible that Iran becomes destabilized, that there's some political chaos” that disrupts the flow of Iranian oil, he said, noting that persistent Iranian attacks on energy infrastructure in the region could keep oil prices uncomfortably high for months.

There’s also the risk that, after years of elevated inflation, consumers see energy prices jump—many states are already seeing noticeable price increases at the pump, according to analysts—and mentally prepare themselves for other prices to follow, a dynamic that can drag on economic activity. According to Goldman Sachs analysts, every $10 increase in the price of oil usually lifts inflation expectations by 0.04 percentage points, but when inflation is already elevated, the impact is three times greater.

On their own, oil prices above $100 a barrel will cause “neither runaway inflation nor a recession," economist Paul Krugman wrote Wednesday—but “this latest economic shock isn’t happening on its own.” The economy is already threatened by tariffs, the economic drag from immigration policy, uncertainty about the effect of AI on the labor market, and stress in the financial system. Iran, Krugman said, "could be the straw that breaks the camel’s back—a straw that becomes heavier the longer the war goes on."

The overall health of the economy can make or break the stock market in times of geopolitical crisis. George Smith, portfolio strategist at LPL Financial, in a note on Wednesday called the economy’s proximity to recession “the single most important factor determining market performance after a shock.”

Looking at more than two dozen major geopolitical events since World War II, Smith found the S&P 500—or, before 1957, its predecessor, the S&P 90—rose an average of 3% in the year following those events. But context makes a big difference. Outside of a recession, stocks rose almost 10% in the year after a major event; in or near a recession, they fell by the same amount.

Investors were reminded Friday that the economy is not on its surest footing. The U.S. shed an estimated 92,000 jobs last month, according to fresh data, surprising economists who expected growth. That revived concerns that slow hiring and rising unemployment could prompt a pullback in consumer spending, depriving the economy of its primary source of fuel.

Prices have risen sharply this week, and drivers should expect further increases in the coming weeks.
Credit: Mostafa Bassim/Anadolu via Getty Images

Key Takeaways

• Gas prices have risen about 11% over the past week, as the surge in oil prices sparked by the escalating conflict in the Middle East quickly feeds through to the costs that consumers face at the pump.
• An extended conflict that disrupts the global supply of oil could continue to push fuel prices higher, which would have an impact on overall inflation levels and weigh on economic activity.

Drivers will likely experience more pain at the pump after a big jump in gas prices this week sparked by developments in the Middle East.

The average cost of a gallon of regular gasoline, according to AAA, stands at $3.48, about 16% higher than a week ago, just after the U.S. and Israel launched attacks on Iran that have led to a broader armed conflict in the region.

The rise in fuel prices follows a massive jump in oil prices amid concerns that supplies from the resource-rich region could be disrupted

“Gasoline prices are going to keep going up in the U.S.,” said Ryan Sweet, chief global economist at Oxford Economics, at a press event last week. “Wholesale gasoline prices, which lead retail by two weeks, signal that we’re going to see higher prices, you and I will see higher prices, at the pump in the U.S. over the next couple of weeks.”

Why This Matters

Even small increases at the pump can ripple through the economy by squeezing household budgets and reducing consumer spending, a key driver of U.S. growth. Sustained energy price increases can lift inflation, influence Federal Reserve interest-rate decisions, and shift market performance across sectors from airlines and retailers to oil producers.

There's Much More Room for Gas Prices to Rise

The war in the Middle East has expanded in recent days, fueling concerns that it could last longer than some initially anticipated. President Donald Trump said the conflict was expected last four to five weeks, though he left open the possibility that it could last far longer. On Friday, he said only "unconditional surrender" from Iran will end the war.

A prolonged conflict would continue to feed through to the prices consumers pay to fill up their tanks.

“It all depends on if there's further escalation and oil prices rise from this point forward,” Sweet said.“ Gasoline prices adjust very, very quickly.”

For every $10 increase in crude oil prices, expect to see around a 25-cent increase in prices at the pump, Sweet said. 

West Texas Intermediate futures, the U.S. crude oil benchmark, rose as high as 35% last week and were trading around $97 a barrel Monday morning.

Oil Shock is 'A Real Thing' for US Economy

Further increases in fuel costs would add to inflationary pressures and consumer spending, taking a toll on the U.S. economy.

"The oil price shock, depending on how long it lasts, is a real thing. Consumers will feel that," Mary Daly, president of the Federal Reserve Bank of San Francisco, said on CNBC on Friday.

"That can be challenging for firms because they need to find workarounds, but it also can cause consumers to pull back on other spending," Daly said, adding that "consumer spending has been a strength of the economy."

A sustained rise in fuel costs could also keep the Fed from cutting interest rates again anytime soon, as inflation remains above the central bank's target rate.

Sweet said that every penny increase in gasoline spending reduces overall consumer spending by $1.5 billion over the course of the year. "Economic costs can increase quite noticeably and quickly, because of retail gasoline prices.”

Update, March 9, 2026: This article was updated to include gas and oil prices as of Monday. It was originally published on March 6.