By Alex Eule
The Fed's Dilemma. The week closed as it began, with oil prices setting the direction for stocks. Today, Brent crude, the global benchmark, closed at $103.14 a barrel, its highest level since August 2022. Brent is up 17% over the last three days. West Texas Intermediate crude, the primary U.S. measure, has followed a similar trajectory. It ended the day at $98.71.
For U.S. consumers, the rapid rise has shown up at the pump, with the price of gas now averaging $3.63 a gallon according to AAA, up from less than $3.00 at the end of February.
For investors, the pain comes in their portfolios, with the major indexes closing Friday at their lowest levels since November.
The Dow Jones Industrial Average lost 119 points, or 0.3% today. The S&P 500 fell 0.6% and the Nasdaq Composite shed 0.9%. After initially showing resilience following the Iran attacks, stocks are now looking far more fragile.
Today's revised figure for fourth-quarter gross domestic product shows an economy in worse shape than previously thought. U.S. GDP grew 0.7% last quarter, down from a previous estimate of 1.4%. The slowdown could be temporary since it's partly related to the government shutdown last year, but it was also partly caused by reduced consumer spending.
Normally the Federal Reserve might come to the rescue, but its hands are tied. The other data report out today showed hotter inflation in January. The core measure of the personal consumption expenditures price index, which strips out food and energy and is closely watched by the Fed, rose 3.1% in January, ahead of December's 3.0% pace.
It's the highest figure in almost two years and a disappointment for Fed officials that have spent the postpandemic years trying to get inflation back under control.
"The latest reading marks another significant setback in the battle against inflation, after some progress had been made last year," my colleague Nicole Goodkind reports. "For instance, core inflation had decelerated to 2.6% in April 2025, before gradually gaining steam again."
The net effect is a Fed that's likely to stand still on rates, even as the stock market reels from uncertainty. Traders now universally expect no change from policymakers at next week's Fed rate meeting. And the latest Fed futures odds suggest the Fed will hold firm at its April meeting too.
Higher energy prices and sticky interest rates are a new reality for markets -- and it's why the major indexes are down for three consecutive weeks.
Watch our TV show on Fox Business Fridays at 7:30 p.m. ET and Saturdays and Sundays at 9:30 a.m. or 10:30 a.m. ET. This week, veteran fund manager Bill Nygren on his favorite stocks. Plus, the outlook for defense companies, and what's ahead for rates.
The Hot Stock: Sandisk +6.9% The Biggest Loser: Ulta Beauty -14.2%
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This Weekend's Magazine
The Calendar
New fears around inflation paired with slowing economic growth complicates the task for the Federal Open Market Committee when it meets next week. The central bank announces its monetary-policy decision on Wednesday. Last week's disappointing February jobs report would normally increase bets on a lower federal-funds rate, but the potential inflationary effects of the war have more than offset concerns about a sagging labor market.
Outside of the FOMC meeting, next week also brings the producer price index from the Bureau of Labor Statistics on Wednesday, and a housing update from the Census Bureau on Thursday.
A sparse earnings calendar has Lululemon Athletica reporting results on Tuesday, followed by Micron Technology on Wednesday, and FedEx on Thursday.
-- Dan Lam
What We're Reading Today
-- Nvidia's Big AI Event: What Wall Street Wants to Hear -- 'PIK' Loans Are the Market's Latest Concern. What They Are and Why They Matter. -- After a Grim Diagnosis, a Value Manager Reflects on Life's Lessons -- Barron's 100 Most Influential Women in U.S. Finance -- ...and this weekend's cover story: Microsoft Stock Hasn't Been This Cheap in a Decade. It's Time to Buy.
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March 13, 2026 19:55 ET (23:55 GMT)
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