Weekly Market Update (Mar 08, 2026)

Market Hedwig
23 hours ago
2 min read

HIGHLIGHTS

The war situation in Iran is the main theme this week. Oil prices jumped while equity markets remain calmer than expected amid current backdrop.

Energy: Oil prices increased as the war in Iran disrupted the LNG and oil supply. It will affect the global economy and policy responses will depend on how high the prices go and how long they stay elevated. Economic Data: Labor reports came out softer than expected, which left the door open for Fed to consider a rate cut. However, the markets are repricing inflation risk higher. Markets still expect two 25bps cuts this year, while the energy prices remain key risk. Global Central Bank: Due to higher inflation risk driven by the high energy prices, central banks in Europe may have to reconsider their pace of rate cuts and take a pause, or even consider a hike. In Japan, policy makers reiterated their intention to hike, while continuing to monitor the war situation and equity market performance.

MARKETS

Nasdaq	24,643.02	-1.27%
S&P 500	6,740.02	-2.02%
Dow	47,501.55	-3.01%
10-Year	4.13%	+17bps
Brent	92.69	+27.88%
DXY	98.99	+1.41%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

Goldman Sachs: Direct impact of higher oil prices on S&P500 earnings is muted. However, if the situation lasts, it is likely to pose significant downside risks to the equity markets. Other than the direction of energy prices, US equity markets are more dependent on AI sectors’ monetization and investments.

Morgan Stanley: Sell-off in software stocks is dramatic, while it is based on fear rather than fact. Financial sector also got hit in a contagion sell-off. We believe it is too early to say private credit and the public investors that have that exposure are vulnerable to tech, GenAI and software risks.

Fixed Income

Standard Chartered: People are worried about private credit, with a large asset manager receiving an increase in redemption requests. It is mainly driven by the concerns of software stocks' exposure which are challenged by the rapidly rising AI advancement.

Morgan Stanley: S&P BDC index dropped 20%+ recently, and its performance is usually negatively correlated with option-adjusted spreads in the public high-yield bonds. However, the high-yield spreads are stable. This disparity suggested that high-yields bonds' higher quality, lower tech exposure and more disciplined issuance make them an attractive and liquid alternative.

Economy

Barclays: High energy prices will have a significant economic effect in many regions, especially for emerging markets. In Asia, Philippines and Thailand are most vulnerable to the energy price shock. Effects on Singapore, Taiwan and Korea are mitigated as the economies are less energy-driven.

Goldman Sachs: We expect inflation and slow growth if the oil prices stay high for longer. For monetary policy, it could be more hawkish, and likely be a halt or delay in rate cut.

KNOWLEDGE TRANSFER

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.