Crude Oil, Yields Resume Rallies, Hurting Stocks

Published as of: March 24, 2026, 9:10 a.m. ET

(Tuesday market open) Stocks eased early, taking a breather after the best daily performance for major indexes since the Iran war began. The calendar is relatively featureless, so the session will likely be spent watching crude prices and mulling the latest war headlines. Crude rebounded more than 4% ahead of Wall Street's open, pushing stocks down further from mild overnight losses as investors saw little follow-up from yesterday's news of U.S. talks with Iran. Treasury yields fell Monday on signs of deescalation, but inched higher this morning.

"The longer oil prices stay elevated, the more likely there will be an inflation hit, and longer-term bond yields will stay high," said Cooper Howard, director of fixed income research and strategy at the Schwab Center for Financial Research (SCFR) "We believe the Fed will continue to remain on hold for the time being given the potential for higher inflation." 

On Monday, major Wall Street indexes enjoyed a relief rally, the first higher daily close for the S&P 500 Index since last Tuesday. It's still down four weeks in a row and off roughly 4% this month. The market finished well below early highs, possibly suggesting skepticism about Trump's posts and concern around Iran's denials that talks were taking place. Details remain hazy, and the Strait of Hormuz is still shut this morning to all but a few Indian-flagged vessels, Reuters reported. The 30-year Treasury note yield hit its highest level since last September as yields extended gains early today after the U.S. reported that fourth quarter unit labor costs rose 4.4%, above the previous estimate of 3.1%. Productivity growth got revised down to 1.8% from the prior 2.5%. Neither is positive for yields or the Federal Reserve's rate path, though no single report is a trend.
 

1. Treasury auctions resume: After little activity last week on the auction block, a set of 2-year Treasury notes go up for bid later this morning. Results should be available before the close of today's Wall Street session. Auctions earlier this month saw lax demand, a negative sign for markets suggesting investors want higher yields to risk their money in U.S. assets. However, data last week showed that that the same 10 countries holding the most U.S. Treasury debt in January 2026 were the same as in January 2025, meaning some stability in foreign holdings despite fears of volatility. Investors now face a gap in key jobs and inflation numbers affecting Treasury trading until a week from Friday when the Bureau of Labor Statistics issues its March nonfarm payrolls report. However, the market is closed that day for Good Friday, meaning there won't be a chance to trade on it in equities until futures trading begins the following Sunday evening.
    
2. Pets, bacon dominate earnings scene: Earnings are sparse this week, though KB Home (KBH) reports later today and Chewy (CHWY) looms tomorrow. Shares of Smithfield Foods (SFD)—a smaller stock that's held up relatively well this year and is outpacing the market amid a move by investors toward sectors like staples that they see as less volatile—popped 5% this morning after it beat analysts' earnings and revenue estimates. The company cited "continued momentum in packaged meats." Food processors are exposed to mounting input costs due to the war and rising prices of agricultural commodities even as consumers in some cases cut back on packaged foods amid the move toward obesity drugs that clip appetites. Though the appetite for bacon, a key Smithfield product, hasn't diminished much if recent data's right. One thing that war and recessions seldom reduce is spending on pets. Nevertheless, shares of Chewy are down since the conflict began. Maybe there's been a surge toward generic pet food brands, much to the chagrin of Fluffy and Fido. Stay tuned tomorrow morning for Chewy's take.
    
3. "Buy the dip" might not be right back: Back when U.S. stocks were carving new highs, "dip buyers" regularly stepped in on intraday pullbacks to snap up shares. This was predicated in part on solid hopes for at least one 2026 rate cut by the Fed, which reached 95% at one point in the futures market a month ago. That's no longer a given, so despite the sharp rally Monday on war hopes, investors can't necessarily expect markets to suddenly resume acting the way they did earlier this year, even if the war ends. Today's auction might deliver some insight on where rates are headed. Further demand weakness could drive short-term yields even higher, possibly narrowing the premium of the 10-year note's yield to that of the 2-year note. A flattening yield curve, if it persists, could indicate higher odds of a recession and dampen equity buying interest further. To monitor "buy the dip" trends, keep an eye on chart candlesticks for the S&P 500 Index and Nasdaq Composite.

• KB Home (KBH) dropped 2% in early trading ahead of its earnings report due after the close. Shares are down so far this year along with other home builders, hurt by stubbornly high mortgage rates.
   
• Apollo Global Management (APO) dropped 2% when Bloomberg reported that its business development company is curbing redemptions from one of its largest non-traded private credit funds for retail investors. This is the latest asset manager dealing with a rise in those requests, the news agency reported. Ares Management (ARES) fell 2.4% this morning as the Financial Times reported it's capped withdrawals from a $10.7 billion private credit fund.
   
• Chip giant Broadcom (AVGO) fell 0.5% ahead of the open. Broadcom is seeing supply chain constraints, including capacity limits at its manufacturing partner Taiwan Semiconductor Manufacturing (TSM), due to soaring demand for AI chips, Reuters reported.
   
• Estee Lauder (EL) fell 7% Monday after the Financial Times reported the company is nearing a $40 billion merger with Puig. Shares were little changed this morning.
   
• The CBOE Volatility Index (VIX) stayed elevated above 26 early today after Tuesday's 4% decline. The failure of VIX to ease much from recent highs above 30 suggests participants are still cautious and hedging activity remains relatively strong despite Monday's positive Middle East news. Typically, any reading of 20 or higher suggests choppiness ahead.
   
• Fertilizer stocks including Nutrien (NTR) and CF Industries (CF) fell Monday on ideas that elevated prices might come down. Fertilizer prices—natural gas is a key part of the manufacturing process—are up 24% since the conflict began, a concern as U.S. farmers begin planting. Next week features U.S. government prospective plantings data for crops like corn, soy, and wheat.
   
• Gold (/GC) is modestly higher this morning after hitting a four-month low of $4,100 an ounce yesterday. Mining firm stocks including Freeport-McMoRan (FCX) and Newmont (NEM) slipped yesterday but stabilized today.
   
• Odds of a Fed rate cut this year fell from 95% a month ago to around 9% this morning, according to the CME FedWatch Tool. Futures trading now works in nearly 17% chances of at least one rate hike at some point in 2026. There's even an 8% chance that the Fed could hike rates at next month's meeting.
   
• At its intraday high Monday, the S&P 500 Index climbed above the 200-day moving average of 6,624 but couldn't maintain that over the course of the session. The Nasdaq Composite didn't come as close to its 200-day moving average of 22,261 at any time on Monday. Sustained closes above these levels would likely be needed to reassure technical traders.

The S&P 500 Index (SPX—candlesticks) enjoyed a relief rally Monday but that wasn't enough to get it back above the 200-day moving average of 6,624 (blue line). It's now closed under that key level three times in a row—the first time since last May it's been below the 200-day average. However, on Friday it bounced off an area near 6,475 (red line) that served as support and resistance over the last year, possibly a constructive development. Momentum tracked by the Relative Strength Index (RSI—bottom chart) remains tepid below 38 but up from below 30 late last week when it dipped into oversold territory.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

March 25: February durable goods orders and expected earnings from Cintas (CTAS), Paychex (PAYX), and Chewy (CHWY).
March 26: No major earnings or data expected.
March 27: Fourth quarter GDP—third estimate and University of Michigan final March Consumer Sentiment.
March 30: No major earnings or data expected.
March 31: March Consumer Confidence and expected earnings from McCormick (MKC) and Nike (NKE).