This week, stocks experienced losses amid rising oil prices due to the ongoing war between the U.S. and Israel against Iran. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite fell about 2% and over 1% respectively, on concerns of high inflation and decreased economic growth. Among the significant losers were private equity firm, Blackstone, and home builder, Lennar, both of which posted losses of over 3% and 6%.
Oil prices continued to surge with Brent and U.S. West Texas Intermediate increasing over 8% and 11% respectively. Consequently, stocks like energy materials maker, Dow, and chemical manufacturer, LyondellBasell, showed remarkable gains, with the former up by 10% on the week.
Market attention also gravitates towards AI titan, Nvidia, as analysts anticipate its upcoming GTC conference. Despite market volatility, Nvidia’s role in AI inferencing and rising performance rates make it a significant player to watch. The company generated revenue of up to $215 billion last year, leading to their shares soaring 1,300% over the past five years.
The Federal Reserve’s policy meeting is also eyed, as traders seek clues about potential rate cuts. Furthermore, amidst burgeoning oil prices due to the Iran conflict, the potential effects of inflation are a concern for investors.
Looking ahead, there are expectations of a robust fundraising quarter for Blackstone despite worries about the private credit market. Micron’s earnings release will also be closely observed. Notably, the closure of the strategic Strait of Hormuz due to the war has brought about significant increases in oil prices, raising concerns about long-term impacts on global energy supply. Stocks such as CF Industries, The Mosaic Company, and Nutrien have already received an uplift from this news.
Last week the stock market was impacted by the ongoing crisis in Iran, leading to a significant surge in oil prices and triggering a three-week losing streak for the S & P 500 – the first in nearly a year. The S & P 500 fell by 1.6% over the week. Energy and utilities sectors emerged as the winners, with the international benchmark Brent crude and the American standard West Texas Intermediate crude experiencing jumps of over 11% and 8% respectively.
Yet, the surge in oil prices has also caused concerns around inflation, leading to the specter of stagflation – higher prices with low economic growth. This worry has affected anticipations of future interest rate cuts by the Federal Reserve. Alongside these developments, cybersecurity company CrowdStrike advanced 3% for the week, benefitting from the increased threat of cyber attacks due to the conflict with Iran.
Despite the turbulence, it’s advised not to completely abandon the stock market. Instead, the advice is to invest, particularly in oversold conditions as indicated by the S & P Short Range Oscillator. Additionally, Alphabet shares were identified as a stock to possibly invest in moving forward.
Concerns over stagflation, alongside the ongoing Iran conflict, appear set to keep the market volatile in the near future. On the other hand, companies like CrowdStrike, specialized in cybersecurity, might benefit from the situation as the risk of cyber terrorism escalates. Despite a currently challenging market environment, investors are encouraged not to panic sell, but instead, to consider suitable investment opportunities.
Sources:
Oil and Nvidia are key for Wall Street next week amid Iran war volatility
Blackstone is one of this week’s most oversold stocks as investors grapple with market volatility- Why March 16 Could Be a Big Day for the Stock Market
- A critical Fed meeting, $100 oil, and Micron earnings: What to watch this week
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