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BUSINESS DAY Growth fears a snowball

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Item 1 of 2 A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, US, March 24, 2026. REUTERS/Jeenah Moon

[1/2]A trader works on the floor of the New York Stock Exchange (NYSE) in New York City, US, March 24, 2026. REUTERS/Jeenah Moon Purchase Licensing Rightsopens a new tab
ORLANDO, Florida, March 30 (Reuters) – The S&P 500 and Nasdaq fell to seven-month lows and bond yields fell on Monday as the war with Iran entered its fifth week, and investors continued to fret over fears of growing inflation despite oil prices rising above $100 a barrel.
In my column today I look at why the market-based borrowing costs since the outbreak of the Iran war could not have come at a worse time than “Big Tech”, which is turning to debt to finance its unprecedented investment in AI.

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If you have more time to read, here are a few articles I recommend to help you understand what happened in the markets today.

Today’s Key Market Movements

  • STOCKS: Asia falls – Japan -3% – but Europe rises, with STOXX 600 +1% and Britain’s FTSE 100 +1.6%. Wall Street is mostly down – Nasdaq and S&P 500 down since August.
  • SECTORS / SECTORS: Only three of the 11 sectors underperform the S&P 500, but their weight carries – tech -1.5%, industrials -1.6%, energy -0.9%. Sysco -15%, Micron ⁠Technology -10%.
  • FX: The dollar is climbing to its highest level since May last year. Euro slips on growth fears, yen backs intervention warnings.

  • BONDS: US yields down 7-9 bps. The 2s/10s curve steepens for the second day to 53 bps, the highest in two weeks.

  • MARKETS / FIGURES: Brent + 1% and WTI + 4%, gold + 0.5%, LME aluminum jumps 4%.
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Today’s Conversation Points

* No quarter given

The first quarter ends on Tuesday, and it’s been a wild ride. Brent crude oil is up 85%, its biggest increase since 1990; “Magnificent 7” US megacaps are down 17%, which means they’ve lost about 20% since the October high and are now close to a bear market; gold is still rising despite March being the second worst month in more than 40 years.

In some ways, the markets have been surprisingly quiet because of the damage done to global energy. 17% of Qatar’s gas capacity is idle; 20% of the world’s oil and gas flows are choked by the closure of the Strait of Hormuz; several Middle Eastern countries, including Saudi Arabia, have shut down energy production fields or refineries. Perhaps the markets have been too quiet.

* “A good place”?

Where is monetary policy, the economy, the labor market or bilateral trade relations if they are not in a “good place”? It seems to be a phrase that the authorities like very much, while the President of the Central Bank of Europe, Christine Lagarde almost changed it to a symbol of policy communication last year.

On Monday, Fed Chairman Jerome Powell said the US policy is “in a good place”, and the authorities can “wait and see” if the shock of energy and supply affects both sides of the two bank order. Powell was one of the first officials to coin the phrase in January last year, at a time when some would argue the economy was in a “good place”.

* The art of the deal

Despite rising borrowing costs, growing uncertainty and market uncertainty caused by the Iran war, the flow of multi-billion dollar deals and M&A activity has not stopped. On Monday, Sysco said it would buy food retailer Jetro Restaurant Depot in a $29 billion deal.

Unilever is in talks to sell its food business to McCormick & Company in a deal that could be worth more than $30 billion, and earlier this month a consortium led by BlackRock’s Global Infrastructure Partners and Sweden’s EQT ⁠AB bought US energy company AES Corp for $33.4 billion. Agreements are being made.

What could drive the markets tomorrow?

  • Developments in the Middle East

  • The energy market is moving

  • The Reserve Bank of Australia publishes the minutes of its March meeting

  • Japan retail sales (February)

  • Japan unemployment (February)

  • Japan’s Industrial Production (February)

  • Japan Tokyo CPI inflation (March)

  • China “government” PMIs (March)

  • India’s trade, current account (Q4)

  • German retail sales (February)

  • Germany unemployment (March)

  • Euro area inflation (March, flash estimate)

  • European Central Bank board member Patrick Montagner speaks

  • UK GDP (Q4)

  • US House Prices (January)

  • US Consumer Confidence (March)

  • US Chicago PMI (March)

  • US “JOLTS” job opportunities (February)

  • US Federal Reserve officials scheduled to speak include Chicago Fed President Austan Goolsbee, Kansas City Fed President Jeffrey Schmid, Governor Michael Barr, Vice Chair of the Treasury Michelle Bowman.

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The views expressed are those of the author. They do not reflect the views of Reuters News, which, under the Principles of Trustopens a new tabit aims to be honest, independent and impartial.

Reporting by Jamie McGeever; Edited by Nia Williams

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