US stocks declined in a volatile week driven by Middle East tensions, rising oil prices, and persistent inflation concerns. The Dow fell 2.11%, the Nasdaq 2.07%, and the S&P MidCap 400 1.34%. Energy stocks outperformed as oil prices increased. Treasury yields moved higher, with the 10-year reaching about 4.38%. Housing data were mixed: builder sentiment edged up to 38, and pending home sales rose 1.8%, but new home sales dropped to 587,000, the lowest level since 2022, highlighting ongoing affordability pressures.
The Fed kept rates unchanged at 3.50%–3.75% for a second meeting (11–1 vote). Policymakers still expect one rate cut this year but revised both inflation and growth forecasts upward. Chair Jerome Powell highlighted increased uncertainty and warned that higher energy prices could affect inflation expectations. Supporting this, producer prices rose 0.7% month-on-month and 3.4% year-on-year in February, both above expectations.
European markets fell as geopolitical risks intensified, particularly due to attacks on oil tankers in the Strait of Hormuz and damage to gas infrastructure in Qatar. The STOXX Europe 600 declined 3.79%. Major indexes also dropped, with Germany’s DAX down 4.55%, Italy’s FTSE MIB 3.33%, France’s CAC 40 3.11%, and the UK’s FTSE 100 3.34%.
