Stocks Pressured by High Oil Prices, But Positive Oracle AI News Helps Tech Stocks
The IS & P 500 Index ($ SPX) (SPY) on Wednesday fell -0.08%, the Dow Jones Industrial Average ($ DOWI) (DIA) fell -0.61%, and the Nasdaq 100 Index ($ IUXX) (QQQ) rose +0.03%. E-mini S&P futures (ESH26) fell 0.15%, while E-mini Nasdaq futures (NQH26) fell 0.07%.
Stocks eased on Wednesday’s +6 bp rise in the 10-year T-note yield and a +4.6% rally in WTI crude oil prices. Crude oil prices have risen despite the IEA members’ decision to release 400 million barrels from emergency oil reserves.
Stocks saw a drop in pressure as the war with Iran continued, with missiles hitting three ships in the Strait of Hormuz and the Persian Gulf on Wednesday, and new missile volleys hitting Israel.
However, technology stocks received support from Oracle’s positive AI news.
The oil market reacted to Wednesday’s move by IEA members to release 400 million barrels of oil from strategic reserves, which is far greater than the 182 million barrel withdrawal in 2022 following Russia’s invasion of Ukraine. The release is designed to replace oil lost due to the closure of the Strait of Hormuz and subsequent production cuts by Persian Gulf oil producers, although it will take time for large quantities of oil to reach the market.
Stocks showed little net reaction to the CPI report, which was in line with market expectations. Feb CPI rose +0.3% m/m and +2.4% y/y, while Feb core CPI rose +0.2% m/m and +2.5% y/y. The headline CPI report of +2.4% y/y was just 0.1 point above the 5-year low posted in April 2025, while the core CPI of +2.5% y/y matched the 5-year low posted two months ago. Even though the CPI figures are at or near a 5-year low, they are still above the Fed’s target of +2%. In addition, inflationary pressures will worsen in the coming months due to the recent increase in oil and gas prices caused by the Iran war.
Shares fell after JPMorgan Chase said it was restricting lending to private debt among some of its loans to the sector, undermining the sector’s effort to deal with the crisis. The $1.8 trillion private credit sector is struggling to cope with an exodus of investors driven by unfavorable returns and fears of further financial distress among portfolio borrowers.
Q4 earnings season is almost over, with more than 95% of S&P 500 companies reporting earnings results. Earnings have been a positive factor in stocks, with 74% of the 492 S&P 500 companies reporting beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to increase by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth. Excluding Magnificent Seven megacap tech stocks, Q4 earnings are expected to increase by +4.6%.
Markets are discounting a 0% chance of a -25 bp FOMC rate cut at the next policy meeting on March 17-18.
International stock markets closed mixed. The Euro Stoxx 50 was down -1.00%. China’s Shanghai Composite closed up 0.25%. Japan’s Nikkei Stock 225 closed up +1.43%, adding to Tuesday’s rally of +2.88%.
Interest rates
June 10-year T-notes (ZNM6) fell -16 ticks. The 10-year T-note yield rose +6.0 bp to 4.216%, adding to Tuesday’s rise of +6 bp. T-note prices were lowered by Wednesday’s +4.6% rally in oil prices and a +3.2 bp increase in 10-year inflation expectations to 2.383%. T-note prices were also reduced due to the supply shortage as the Treasury sold 10-year T-notes on Wednesday and will sell 30-year bonds on Thursday. The T-note market had dismissed the CPI report as old news, given the surge in oil and gasoline prices since the start of the Iran war.
European government bond yields rose sharply. The 10-year German bund yield rose +9.6 bp to 2.932%. The UK 10-year yield rose +13.3 bp to 4.686%.
Swaps cut a 4% chance of a -25 bp ECB rate hike at its next policy meeting on March 19.
US Stock Movers
Magnificent Seven tech stocks closed mixed, with Amazon.com (AMZN) down -0.9%, but Tesla (TSLA) up +2.1%.
Oracle (ORCL) rallied more than +9% after reporting strong results and guidance showing strong demand for AI computing.
Oracle news provided early support in the software and computer infrastructure sectors, but most of those stocks fell. Datadog (DDOG) is up over +3%. However, IBM ( IBM ) fell 0.7%, while Microsoft ( MSFT ) fell 0.3%.
Chip stocks also saw some support from Oracle news, led by gains of +4.1% in Micron Technology ( MU ), +3.2% in Align Technology ( ALGN ), and +2.6% in Intel ( INTC ). Nvidia (NVDA) rose +0.5%
Oil stocks saw support from the oil price rally. Valero Energy ( VLO ) rose 6.5%, Marathon Oil ( MPC ) rose 5.4%, and Occidental Petroleum ( OXY ) rose 4.6%. Chevron (CVX) rose +3.0%, and Exxon (XOM) rose +2.3%.
Nike (NKE) gave up the advance early and closed -0.7% after Barclays upgraded to overweight.
Campbell’s Co (CPB) fell nearly -7% after it cut its full-year earnings guidance.
UniFirst Corp (UNF) rallied more than +6% after Cintas agreed to buy the company in a deal worth $5.5 billion.
Earnings reports (3/12/2026)
Dollar General Corp (DG), Ulta Beauty Inc (ULTA), Lennar Corp (LEN), Adobe Inc (ADBE).
As of the date of publication, Rich Asplund did not have (directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
