Oil prices held above $100 per barrel on Monday, March 16, as traders monitored signs of whether the Strait of Hormuz might reopen and anticipated a series of central bank meetings this week. U.S. and European stock markets showed signs of recovery.
At the time of writing, Nasdaq futures climbed 1.13%, S&P 500 futures rose 1.00%, and Dow Jones futures advanced 0.79%.
In Europe, the Euro Stoxx 50 gained 0.4%, with banking and energy stocks pushing the UK's FTSE 100 up by 0.6%. France's CAC 40 edged up 0.1%, supported by strong openings in luxury stocks. Germany's DAX increased by 0.6%.
The rise in S&P 500 futures suggests the underlying index may record its first gain in five trading sessions. Dow Jones Industrial Average futures rose 0.8%, while Nasdaq futures, heavily weighted toward tech stocks, increased 1.1% during European hours. Key index components
Meanwhile, a Friday evening Reuters report indicated that
Earlier in Asia, South Korea's Kospi index closed up 1.1%, ending a two-day losing streak, with chip stocks performing strongly. Hong Kong's Hang Seng Index rose 1.3%, while China's Shanghai Composite fell 0.3% despite better-than-expected economic data. Taiwan's Weighted Index declined 0.2%, and Japan's Nikkei 225 dropped 0.1%, dragged down by automotive and electronics shares.
**U.S. Strikes Iranian Oil Exports**
Previously, the U.S. President increased pressure on nations to help reopen the critical oil transit route and stated that the U.S. is engaging with Iran. However, the success of this effort remains uncertain. Investors are closely watching the strategic waterway, with markets highly sensitive to related developments.
Oil trading was volatile. Brent crude rose to $106.50 per barrel after U.S. strikes on military targets at Kharg Island, which handles nearly all of Iran's oil exports. Prices later pared gains, trading at $105.89.
**Central Bank Focus Intensifies**
Since the outbreak of hostilities, surging oil prices have pushed U.S. Treasury yields higher and reduced expectations for interest rate cuts due to inflation concerns. Traders are awaiting guidance from several central banks this week.
This week features a packed schedule of central bank meetings in the U.S., Europe, Japan, and other nations. The Federal Reserve is the main focus, with broad expectations for it to hold rates steady after its two-day meeting starting Tuesday.
Charu Chanana, Chief Investment Strategist at Saxo Markets, said, "Markets are attempting to stabilize, but that doesn’t imply a shift to optimism. Equities may welcome any signals of a potential reopening of the Strait of Hormuz, but with further threats looming and diplomatic progress sporadic, confidence remains low, and positioning is likely to stay highly sensitive."
**Caution Prevails**
Iran stated it has not requested negotiations or a ceasefire. The Iranian foreign minister clarified that the Strait of Hormuz is closed only to vessels from "hostile parties." Two tankers carrying liquefied petroleum gas to India have passed through the strait, which typically handles about one-fifth of global oil shipments.
The U.S. President urged other countries to send naval vessels to help keep the strait open but provided no further details or commitments from the U.S. He expressed hope for participation from China, France, Japan, South Korea, and the U.K.
Haris Khurshid, Chief Investment Officer at Chicago's Karobaar Capital LP, noted, "Last week, much of the geopolitical premium was already priced in, so traders appear to be waiting for clearer signs of actual supply disruption before pushing prices significantly higher." He added that after the Kharg Island strikes, the market appears to be pricing in disruption risks rather than a full-scale supply shock.
A Sunday report suggested the U.S. administration may announce as early as this week that it has formed a multinational coalition to escort ships through the Strait of Hormuz. However, it remains unclear whether the operation would begin before or after missile attacks cease.
Nick Twidale, Chief Market Analyst at AT Global Markets in Sydney, commented, "Most market participants remain extremely cautious due to high uncertainty over what the U.S. administration might do or say next."
**Dollar Holds Steady**
U.S. Treasuries rose, with the two-year yield falling 2.5 basis points to 3.706% and the 10-year yield down 2.4 basis points to 4.259%, according to Tradeweb. The 30-year yield decreased 1.8 basis points to 4.889%.
Eurozone bond yields were little changed in early trading. Germany's 10-year yield rose 0.4 basis points to 2.975%, while Italy's 10-year yield fell 0.7 basis points to 3.780%.
The U.S. dollar was largely flat during European hours, staying near Friday's more than nine-month high. The dollar index traded at 100.342, virtually unchanged after reaching 100.54 on Friday.
The euro edged up 0.1% to $1.1430, after earlier touching $1.1410, matching Friday's seven-and-a-half-month low. Danske Bank analyst Filip Andersson noted that uncertainty over energy supply due to Middle East oil transport disruptions could put further downward pressure on the euro against the dollar.
Bitcoin rose to a one-month high, continuing a gradual recovery from recent lows. It increased 2.4% to $73,457, after earlier reaching $74,342. Louis Navellier of Navellier & Associates suggested the recent rise represents a modest rebound from earlier weak performance.
Gold fluctuated near $5,000 per ounce, while silver fell for a fourth consecutive session.
**Shift to Commodities Advised**
Peter Boockvar, Chief Investment Officer at One Point BFG Wealth Partners, warned that the traditional 60/40 portfolio strategy is faltering as energy-driven inflation reduces the protective role of bonds.
Boockvar noted that the bond allocation in portfolios has recently failed to provide a hedge. Rising energy prices from Middle East conflicts are fueling inflation expectations, reshaping global bond market dynamics.
For investors seeking bond alternatives, Boockvar recommended shifting to commodities. A commodity bull market that began in 2025, initially focused on precious and industrial metals, has expanded to oil, natural gas, and agriculture—with the latter benefiting from fertilizer and ammonia supply disruptions.
**Prolonged High Oil Prices Could Hit Stocks**
J.P. Morgan Private Bank cautioned that if oil prices remain elevated, the recent sell-off in the S&P 500 could deepen.
The bank's researchers warned that sustained high oil prices could trigger a "domino effect" in equities, amplifying selling pressure in U.S. markets, spreading globally, and ultimately impacting economic growth.
They suggested that if oil stays above $90 per barrel for an extended period, the S&P 500 could see a 10–15% correction, with spillover effects on international and emerging markets.
**Goldman Sees Upside for S&P 500**
Goldman Sachs strategists indicated that U.S. stocks still have room to rise, projecting the S&P 500 could reach 7,600 by the end of 2026, driven by continued earnings expansion and moderate economic growth.
Based on in-depth analysis, the bank estimates S&P 500 earnings per share will grow to around $309 in 2026 and $342 in 2027, representing annual growth rates of approximately 12% and 10%, respectively.
This earnings growth supports a potential 14% return from current levels, reflecting confidence in corporate profitability even amid high interest rates and slightly tighter financial conditions. Technology firms remain a core driver of earnings growth.
**Notable Movers**
Micron Technology gained 3.5% after RBC raised its price target from $425 to $525.
Lithium battery firm Microvast surged over 15% ahead of earnings.
STMicroelectronics advanced 2% on plans to introduce humanoid robots for factory automation.
Alibaba briefly jumped 2.8% after announcing the formation of a Token Hub business unit to enhance strategic coordination among AI initiatives.
Bilibili rose 2.3%, potentially benefiting from adjustments to commission rates in Apple and Google app stores.
Tencent Music continued its climb, rising over 1% ahead of its earnings report.
Hesai Group increased more than 2%, supported by a key lidar order for new unmanned vehicles.
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