Stocks Decline as Bond Yields Climb on Inflation Fears

The S&P 500 Index ($SPX) (SPY) today is down -0.37%, the Dow Jones Industrial Average ($DOWI) (DIA) is down -0.10%, and the Nasdaq 100 Index ($IUXX) (QQQ) is down -0.64%.  March E-mini S&P futures (ESM26) are down -0.40%, and March E-mini Nasdaq futures (NQM26) are down -0.70%.

Stocks are under pressure today, with the Nasdaq 100 falling to a 3.75-month low as bond yields rise on concerns inflation will climb due to the war in Iran.  The 10-year T-note yield rose to a 6.75-month high today of 4.34%.   The Iran war enters its twenty-first day as Iran presses ahead with attacks on neighboring states.  Kuwait said it shut several units at its Al Ahmadi refinery after multiple strikes, and Bahrain reported a fire at a warehouse.  Also, Saudi Arabia and the United Arab Emirates said they intercepted Iranian missiles and drones today. 

Market sentiment also worsened today after Axios reported that the US is considering plans to take over Iran’s Kharg Island, Iran’s key oil-export site, to put pressure on Iran to reopen the Strait of Hormuz.

Market volatility may be higher than usual today due to the quarterly event known as triple witching.  Citigroup estimates that about $5.7 trillion in March options, futures, and derivatives on stocks, indexes, and exchange-traded funds will expire today. 

President Trump on Thursday pressed for de-escalation of attacks on Middle East energy sites, following Iranian and Israeli strikes on major gas fields.  Mr. Trump said the US wasn't involved in the South Pars attack and said Israel would refrain from further strikes on the site.  Iran said it will target energy infrastructure in Saudi Arabia, Qatar, and the UAE in retaliation for US and Israeli airstrikes on its South Pars gas field and its Asaluyeh oil industry facilities.  

Crude oil prices (CLJ26) remain high despite attempts to boost global supplies.  The IEA last Wednesday released 400 million barrels from emergency oil stockpiles and said the war against Iran is disrupting 7.5% of global oil supply, and the conflict will cut global oil supply by 8 million bpd this month.  The closure of the Strait of Hormuz, through which about a fifth of the world’s oil and natural gas flows, has choked off oil and gas flows due to Iran’s attacks on shipping in the waterway and forced Gulf producers to cut output because they can’t export from the region.  Iran has attacked about 20 vessels in the Persian Gulf and near Hormuz since the conflict began.  Goldman Sachs warns that crude prices could exceed the 2008 record high of close to $150 a barrel if flows through the Strait of Hormuz remain depressed through March.

The markets are discounting a 10% chance for a +25 bp FOMC rate hike at the April 28-29 policy meeting.

Overseas stock markets are mixed today.  The Euro Stoxx 50 is up +0.26%.  China's Shanghai Composite fell to a 2.5-month low and closed down -1.24%.  Japan's Nikkei Stock 225 was closed for the Vernal Equinox Day holiday.

Interest Rates

June 10-year T-notes (ZNM6) today are down by -10 ticks.  The 10-year T-note yield is up +8.6 bp to 4.335%.  June T-notes fell to a contract low today, and the 10-year T-note yield rose to a 6.75-month high of 4.336%.  T-note yields are climbing on concern that surging energy prices from the Iran war will boost inflation and even force the Fed to tighten monetary policy.  The weakness in stocks today is boosting some safe-haven demand for government debt and limiting losses in T-notes. 

European government bond yields are moving higher today.  The 10-year German bund yield is up +1.4 bp to 2.976%.  The 10-year UK gilt yield rose to a 17.5-year high of 4.949% and is up +10.0 bp to 4.943%.

German Feb PPI fell -3.3% y/y, weaker than expectations of -2.7% y/y and the biggest decline in 1.75 years.

ECB Governing Council member and Bundesbank President Joachim Nagel said the ECB may need to consider raising interest rates as soon as next month if price pressures build further due to the Iran war.

Swaps are discounting a 70% chance of a +25 bp ECB rate hike at its next policy meeting on April 30.

US Stock Movers

The Magnificent Seven technology stocks are moving lower today, a negative factor for the overall market. Alphabet (GOOGL), Amazon.com (AMZN), Microsoft (MSFT), Tesla (TSLA), and Meta Platforms (META) are down more than -1%.  Also, Nvidia (NVDA) is down -0.80% and Apple (AAPL) is down -0.40%. 

Software stocks are under pressure today, weighing on the broader market.  Atlassian (TEAM) is down more than -4% to lead losers in the Nasdaq 100, and CrowdStrike Holdings (CRWD) is down more than -3%.  Also, Workday (WDAY), Datadog (DDOG), ServiceNow (NOW), Intuit (INTU), and Oracle (ORCL) are down more than -2%.  In addition, Salesforce (CRM) is down more than -1% to lead losers in the Dow Jones Industrials, and Autodesk (ADSK), Adobe Systems (ADBE), and Palantir Technologies (PLTR) are down more than -1%.

Super Micro Computer (SMCI) is down more than -27% to lead losers in the S&P 500 after the company reported that the US Attorney’s Office indicted three executives for allegedly conspiring to commit export-control violations. 

Mosaic (MOS) is down more than -5% after Freedom Capital Markets downgraded the stock to sell from hold. 

Planet Labs (PL) is up more than +31% after forecasting 2027 revenue of $415 million to $440 million, well above the consensus of $379.6 million.

ARM Holdings Plc (ARM) is up more than +6% to lead gainers in the Nasdaq 100 after HSBC double-upgraded the stock to buy from reduce with a price target of $205. 

Rhythm Pharmaceuticals (RYTM) is up more than +6% after saying it received expanded indication approval from the FDA for its drug Imcivree to treat patients 4 years and older with acquired hypothalamic obesity. 

SM Energy (SM) is up more than +4% after JPMorgan Chase upgraded the stock to overweight from restricted with a price target of $40.

Figs Inc. (FIGS) is up more than +3% after Oppenheimer upgraded the stock to outperform from market perform with a price target of $22. 

FedEx (FDX) is up more than +1% after reporting Q3 adjusted EPS of $5.25, stronger than the consensus of $4.17, and raising its full-year adjusted EPS forecast to $19.30 to $20.10 from a previous estimate of $17.80 to $19.00, well above the consensus of $18.71. 

Chipotle Mexican Grill (CMG) is up more than +1% after Mizuho Securities upgraded the stock to outperform from neutral with a price target of $40.

Earnings Reports(3/20/2026)

BioAge Labs Inc (BIOA), ECB Bancorp Inc/MD (ECBK), Eledon Pharmaceuticals Inc (ELDN), Ermenegildo Zegna NV (ZGN), Greene County Bancorp Inc (GCBC), SANUWAVE Health Inc (SNWV), SELLAS Life Sciences Group Inc (SLS), Solid Biosciences Inc (SLDB), SWK Holdings Corp (SWKH), Terns Pharmaceuticals Inc (TERN), Vox Royalty Corp (VOXR).