Will Oil Break This Market?

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For the week ended Mar 13, 2026, global equities extended their pullback, as renewed conflict in Iran, surging oil back near or above 95–100 dollars a barrel, and fading hopes for early Fed rate cuts weighed on risk sentiment. Asian markets were generally softer, with Japan, Korea and Hong Kong all under pressure as investors digested the stronger dollar, elevated volatility (VIX near the high‑20s), and the risk that geopolitics could further delay monetary easing. 

U.S. Stocks – Weekly Wrap

Market Overview

U.S. equities declined for the third straight week, with the S&P 500(SPX), Dow(DJI) and Nasdaq(COMP) falling around 1.3%–2.0% as renewed conflict in Iran, surging oil back near or above 95–100 dollars a barrel, and fading hopes for early Fed rate cuts weighed on risk sentiment.

(Refer to the major indices’ weekly performance tables below.)

Major Indices – Weekly Performance

·       Dow Jones: -1.99%

·       S&P 500: -1.60%

·       Nasdaq Composite: -1.26%

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Key Highlights for the Week and Outlook

1️⃣ Oil spike
WTI crude has surged more than 30% year‑to‑date and recently traded in the high‑70s to high‑80s as markets reacted to effective disruptions in the Strait of Hormuz, a route that carries around 20% of global seaborne oil and a significant share of LNG flows.

2️⃣ Inflation Improved
Heading into the latest oil spike, the inflation backdrop was improving: headline CPI had eased to around 2.4% and core to about 2.5% year over year, the lowest since 2021, as shelter costs gradually cooled. A sustained rise in energy prices from here could push headline inflation back above 3% even if core remains more contained, complicating—but not derailing—the disinflation narrative.

3️⃣ Fed FOMC meeting Mar 17-18
The Fed is widely expected to hold rates steady at this week’s meeting, but the combination of firmer energy prices and sticky service inflation has already pushed markets to price a later and shallower easing cycle. Where investors once anticipated a series of cuts, current pricing implies only one or two reductions by the end of 2026, consistent with the idea of delay rather than cancellation of the easing path

4️⃣ Growth resilience
Global PMI data remain in expansion territory, with the J.P. Morgan Global Composite PMI around the mid‑50s equivalent and consistent with roughly 2.5%–2.6% annualized global GDP growth—below the pre‑pandemic trend, but clearly not recessionary. That backdrop supports the view that the world economy entered this shock with decent momentum, even if growth is running in a lower gear.

5️⃣ U.S. oil‑shock sensitivity
The U.S. economy is structurally less exposed to oil shocks than in past cycles: the country has been a net total energy exporter since 2019, and a larger share of output now comes from services rather than heavy industry, making overall energy intensity lower than in prior decades.

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S&P 500 Sectors in Focus

U.S. sectors posted a mixed but broadly risk‑off week, with only Energy and Utilities finishing higher while cyclical and growth areas lagged. Energy was the clear outperformer, rising 2.0% as investors rotated into oil‑linked names amid elevated crude prices, while Utilities also eked out a small gain. The broad market (SPY) fell about 1.5%, with the weakest performance coming from Financials (-3.32%), Consumer Discretionary (-3.13%), Industrials (-3.11%) and Communication Services (-2.56%), underscoring pressure on cyclicals and rate‑sensitive sectors.

(Refer to the SPX sector ETF weekly performance table below.)

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Technical snapshot – major U.S. indices

For the week, all three major U.S. benchmarks—Dow, S&P 500 and Nasdaq—closed lower, confirming a broad-based corrective phase rather than a narrow tech-driven pullback. with the Dow dropping 2.0% (worst performer), S&P 500 -1.6%, and Nasdaq -1.3% (most resilient). Dow's outsized decline reflects cyclical/value selling; S&P shows broad distribution per your sector data; Nasdaq holds up on growth/AI favoritism. Classic risk-off action amid oil shock and fading rate-cut hopes—rallies likely capped until volatility eases.

📊 Weekly charts:

• DJI weekly chart
• SPX weekly chart
• Nasdaq weekly chart

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China / Hong Kong Markets

Market Overview

Chinese equities were mixed over the week. The blue chip benchmark CSI 300 Index edged 0.19%, and the Shanghai Composite Index(SSE) retreated 0.70%. In Hong Kong, the benchmark Hang Seng Index fell 1.13%. Overall resilience despite global volatility.

·       CSI 300: +0.19%

·       Shanghai Composite: -0.70%

·       Hang Seng Index: -1.13%

Key Highlights – China & Hong Kong

1️⃣ Inflation Acceleration
Consumer inflation in China hit its fastest pace in over three years, with the CPI rising 1.3% year-over-year in February, driven by Chinese New Year holiday demand for travel and tourism services. Core inflation climbed to 1.8% YoY—the highest since March 2019—indicating firmer underlying price pressures. Producer prices stayed in deflation for the 41st straight month but saw the mildest decline since July 2024, aided by rising metals and oil costs.

2️⃣ Robust Export Surge
China's exports jumped 21.8% in January-February combined (to smooth CNY effects), far exceeding forecasts, fueled by global AI/tech demand for electronics despite U.S. trade declines offset by gains to Europe and Southeast Asia. Imports rose 19.8%, pushing the trade surplus to a record $213.6 billion and signaling strong external demand amid resilient domestic absorption.

3️⃣ AI agent boosts Chinese technology stocks

Chinese tech stocks rallied on adoption of OpenClaw, an open-source AI agent enabling autonomous task execution and marking a shift from chatbots to decision-making systems. Gains moderated as banks, brokerages, and government entities issued usage cautions and restricted employee access, tempering near-term enthusiasm for early adopters and infrastructure plays.

(Refer to the Hang Seng Index constituents’ weekly performance table below.)

📊 Weekly charts:

• SSE weekly chart
• HSI weekly chart

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Singapore Market – Weekly Wrap

Market Overview
The Straits Times Index (STI) edged down 0.12% to 4,842.27, a shallow pullback from February peaks above 5,000 amid global oil volatility—resilient relative to U.S./HK declines. Commodities led: Wilmar International surged 8.88% on palm oil/China demand; DFI Retail +8.06%, Hongkong Land +5.13% on property rotation.

Market Leaders

Outperformers:

• Wilmar (F34): +8.88%
• DFI Retail (D01): +8.06%

Banks Anchor Resilience

Big three banks held defensive: DBS +0.56%, UOB +0.25%, OCBC -0.91%—steady NIMs/dividends offsetting rate pressures, comprising ~50% index weight.

(Refer to the STI weekly performance table below.)

Technical Snapshot – STI
The STI remains in a strong primary uptrend on a multi‑month view, even after snapping its nine‑week winning streak. It closed just above its 50‑day MA around 4,846, suggesting the current move is still a pullback within an uptrend rather than a confirmed trend change.

The STI maintains its primary uptrend on multi-month charts despite a three-week retreat, closing at 4,842.27—precisely at its 50-day moving average, confirming consolidation rather than reversal. The index has had a shallow 1.95% monthly pullback from the February all-time high of 5,041, Key support at c.4,800 holds firm; a break below risks 4,700, but resilient bank weights and commodity rotation suggest rallies toward 4,850 resistance remain viable within the uptrend.

📊 Weekly chart:

• STI weekly chart

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Source: Some content and data are excerpted from publicly available market reports. Please comment to claim copyright ownership of any material, and it will be removed if necessary.