This weekly recap covers 23 to 29 March 2026. Last week ended with the S&P 500 at 6,506.48 and investors hoping the worst of the oil shock might be behind them. This week opened with a relief rally after Donald Trump postponed strikes on Iranian energy infrastructure, but it ended with the S&P 500 at 6,368.85, the Dow at 45,166.64 and the Nasdaq at 20,948.36. Brent settled Friday at $112.57, the U.S. 10-year Treasury yield was around 4.43%, and the VIX jumped to 31.05, its highest level since April 2023. By the weekend, the conflict had widened again, with Yemen's Houthis entering the war directly and Gulf markets slipping on Sunday.
Quick highlights
- Monday relief, quickly doubted: Trump said the U.S. would postpone strikes on Iranian power plants and energy infrastructure, oil dropped sharply, Brent fell as much as 13%, and the S&P 500 rose 1.1% to 6,581. Iran then denied direct talks, which set the tone for the rest of the week.
- Tuesday macro damage starts to show: the S&P 500 slipped 0.4%, Brent rebounded to $104.49, and S&P Global's flash U.S. Composite PMI fell to 51.4, an 11-month low, with price pressures rising.
- Wednesday hope, plus an AI detour: the U.S. delivered a 15-point plan to pause the war, the S&P 500 rose 0.5%, and Arm jumped 16.4% after unveiling its AGI CPU and naming Meta as the lead partner.
- Thursday reversal: Iran rejected the U.S. ceasefire offer, the S&P 500 fell 1.7%, the Nasdaq dropped 2.4% and formally entered correction territory. The same day, the OECD cut its 2026 global growth forecast to 2.9% and raised its G20 inflation projection to 4.0%.
- Friday confirmation: the Dow entered correction territory, consumer sentiment fell to 53.3, one-year inflation expectations rose to 3.8%, Brent settled at $112.57 and the VIX reached 31.05.
- Weekend escalation: the Houthis launched their first attacks on Israel in this war, the U.S. sent Marines to the region, and the Pentagon was reported to be preparing options for possible ground operations in Iran.
Numbers snapshot (23–29 Mar 2026)
- Mar 23 — S&P 500: 6,581.00 (+1.1%). Dow: 46,208.47 (+1.4%). Nasdaq: 21,946.76 (+1.4%). Trump postpones strikes on Iranian energy infrastructure; Brent falls as much as 13% and moves back below $100 during the relief move. Danone announces agreement to acquire Huel for approximately €1 billion ($1.15 billion).
- Mar 24 — S&P 500: 6,556.37 (-0.4%). Dow: 46,124.06 (-0.2%). Nasdaq: 21,761.89 (-0.8%). U.S. business activity slows to an 11-month low, while oil and yields rise again.
- Mar 25 — S&P 500: 6,591.90 (+0.5%). Dow: 46,429.49 (+0.7%). Nasdaq: 21,929.83 (+0.8%). Arm unveils AGI CPU, says the chip could generate about $15 billion in annual revenue in about five years, and the stock rallies 16.4%. Merck announces $6.7 billion acquisition of Terns Pharmaceuticals.
- Mar 26 — S&P 500: 6,477.16 (-1.7%). Dow: 45,960.11 (-1.0%). Nasdaq: 21,408.08 (-2.4%). Nasdaq enters correction. OECD cuts 2026 global growth to 2.9% and sees G20 inflation at 4.0%.
- Mar 27 — S&P 500: 6,368.85 (-1.7%). Dow: 45,166.64 (-1.7%). Nasdaq: 20,948.36 (-2.1%). Brent: $112.57. WTI: $99.64. 10-year yield: ~4.43%. VIX: 31.05. Bloomberg reports Citi is weighing acquisition of a major U.S. regional bank; Citi calls it "baseless speculation."
- Mar 27 — Weekly: S&P 500 down 137.63 points, or 2.1%. Nasdaq down 699.25 points, or 3.2%. Dow down 410.83 points. Fifth consecutive losing week for the main indexes.
- Mar 27 — Michigan sentiment: 53.3 in March, down from 56.6 in February. One-year inflation expectations: 3.8%, up from 3.4%.
- Mar 28–29 — Houthis confirm their first attack on Israel in the current war. Gulf markets ease on Sunday as investors price a broader regional conflict and more U.S. military deployments.
1) The week that was supposed to be a pause
Monday looked like the market finally had something to work with. Trump said the U.S. had held productive conversations with Iran and would postpone strikes on Iranian energy infrastructure. Oil fell sharply, stock futures rallied, and Wall Street delivered its best session since the war began. The S&P 500 closed at 6,581, up 1.1%, and the Dow gained 631 points.
The problem was that the pause never turned into anything solid. Iran denied direct communication with Washington almost immediately. By Tuesday, oil was climbing again and equities were slipping. By Wednesday the market tried one more time to buy diplomacy after reports that the United States had sent a 15-point proposal to pause the war, but even that session was unstable, with Iran dismissing the offer and the fighting continuing.
Thursday ended the illusion. Iran rejected the U.S. ceasefire proposal, oil rose more than 4%, the S&P 500 had its worst session since the war began, and the Nasdaq formally entered correction territory. Friday made the message even clearer. Trump extended his deadline to Iran by 10 days, but markets treated it as delay rather than resolution. Stocks fell again, oil settled above $112, and by the weekend the Houthis had joined the war directly while the U.S. was moving more forces into the region.
2) Inflation came back into the conversation fast
What changed this week was not just the oil price. It was the realization that the oil shock is now filtering into actual economic data. On Tuesday, S&P Global's flash U.S. Composite PMI fell to 51.4, its lowest level in 11 months, while the prices-paid component climbed sharply. On Wednesday, U.S. import prices for February rose 1.3%, the biggest monthly increase since March 2022. On Friday, the University of Michigan survey showed sentiment at 53.3 and one-year inflation expectations at 3.8%. That is a clean line from energy shock to inflation anxiety to weaker confidence.
The Fed message also got more uncomfortable. Reuters' poll of economists still showed a median view for no move until September and at least one cut later this year, but markets had already priced out cuts for 2026 and were assigning nearly a 30% chance of a hike. Fed Vice Chair Philip Jefferson said sustained higher energy prices could worsen inflation while also slowing spending, while Philadelphia Fed President Anna Paulson warned that higher fuel and fertilizer costs could pass into inflation expectations more quickly than usual, precisely because inflation has been salient for years.
The bond market reflected that shift. The 10-year yield ended the week at about 4.43%, the highest close since last July. Mortgage rates followed immediately. The average 30-year fixed mortgage rate jumped to 6.43%, the highest since October, while applications dropped sharply. The market is no longer looking at this as a temporary oil spike that central banks can ignore.
3) Equities: fifth straight losing week, and this one felt worse
The headline number is simple enough. Friday's close left the S&P 500 down 8.7% from its January record high, the Dow in correction territory, and the Nasdaq down 9.9% for the year. But the shape of the week matters more than the totals. Monday's relief rally was followed by Tuesday hesitation, Wednesday hope, then a sharp Thursday-Friday breakdown. That kind of sequence usually means positioning is fragile and trust in policy signals is low.
The selloff was also broad enough to matter. Megacap tech and consumer discretionary shares dragged the market lower on Friday, making this Wall Street's worst week since the Iran war began. The VIX reaching 31.05 is not a catastrophe by itself, but it is a clear sign that investors are paying up for protection again. This was no longer a quiet drift lower. It was a repricing of macro risk.
Sector rotation continues to tell a clear story. Energy remains the only sector with meaningful positive returns since the conflict began. Tech, consumer discretionary, and financials have borne the worst of the selling. The Dow Transports extended their recent underperformance, now logging one of their worst monthly stretches since the 2022 bear market. That index is a useful proxy for how investors are repricing the real-economy impact of higher energy costs: when airlines, freight logistics, and shipping companies sell off together, the market is not just expressing macro fear — it is repricing the cost structure of the economy.
4) AI and tech still moved. They just could not carry the tape
The most important tech story of the week was Arm. On Tuesday it unveiled the AGI CPU, a data-center chip aimed at agentic AI, with Meta as lead partner and TSMC manufacturing on a 3-nanometer process. Arm said the chip could generate roughly $15 billion in annual revenue in about five years. The stock surged 16.4% on Wednesday after investors digested the revenue targets and the Meta partnership, while AMD and Intel both rose more than 7% and Nvidia added 2%. That is a real move, and it shows the AI infrastructure race is still very much alive.
At the same time, the legal pressure on platform companies kept building. A Los Angeles jury found Meta and Google negligent in a bellwether case over harmful social media design for young users, awarding $6 million in damages. In a separate New Mexico case, jurors ordered Meta to pay $375 million. Those verdicts were a direct hit to sentiment around Meta, one of the main drags on the Nasdaq's correction day.
There was also another sign that enterprise AI is becoming more financialized. OpenAI was reported to be offering private-equity firms preferred equity with a guaranteed minimum 17.5% return plus early access to newer models, as it tries to accelerate enterprise adoption and compete more aggressively. The common thread across Arm, OpenAI, and the rest is clear enough: AI capex and distribution are still expanding, but for one week at least that story was secondary to oil, inflation and rates.
5) M&A: two stories worth tracking
The macro backdrop kept most deal activity quiet. Leveraged buyouts need financing, and financing costs have moved materially with yields. Strategic mergers need boards willing to price transformational transactions against an economic outlook that nobody can forecast with confidence. Neither condition is particularly friendly right now.
Still, two stories stood out. The first was confirmed: Merck announced on Wednesday that it would acquire Terns Pharmaceuticals for $53 per share in cash, representing an equity value of approximately $6.7 billion. The deal centers on TERN-701, a leukemia drug candidate that analysts see as a potential multi-billion dollar product, and it is Merck's third multi-billion dollar acquisition in the past year as the company works to build out its oncology pipeline ahead of Keytruda's patent cliff in 2028. It is the kind of defensive strategic logic that does not pause for geopolitical noise.
The second story was unconfirmed, and more interesting for it. Bloomberg reported on Friday that Citigroup's senior leaders had held preliminary discussions about acquiring a major U.S. regional bank, a move that would have been considered inconceivable as recently as a year ago. The logic is straightforward: Citi has spent years restructuring and divesting, recently closing the sale of its Russian subsidiary and a 49% stake in Banamex, and now sits on significant capital with its consent orders nearing resolution. A deposit-rich regional franchise would dramatically close the gap with JPMorgan. Citi called the report "baseless speculation" and reiterated its focus on organic growth. Its shares fell 3% regardless, and the story was enough to keep bank M&A firmly in the conversation.
6) What the week tells you
The simplest conclusion is that the market now requires proof, not headlines. Monday's rally on the strike delay did not hold. Wednesday's optimism on a U.S. proposal did not hold. Friday's 10-day extension did not hold. And then the weekend made the regional picture worse, not better, with Houthi involvement and additional U.S. deployments. Investors are no longer treating diplomatic language as de-escalation unless something concrete changes on the ground.
The second conclusion is that this is no longer just an oil-market story. It is now showing up in PMIs, import prices, consumer sentiment, inflation expectations, Treasury yields and mortgage rates. That is what makes this week more serious than a typical geopolitical scare. The shock is moving through the system.
The third is that AI has not stopped mattering. Arm's rally, OpenAI's private-equity push, and Merck's willingness to pay $6.7 billion for a leukemia pipeline in the middle of all of this all say the same thing: capital is still moving toward the future, just more selectively. Until oil breaks lower or the war truly de-escalates, that selectivity is probably the hierarchy markets will keep trading.
Sources (primary / checkable)
- S&P Global, Flash U.S. Composite PMI, March 24, 2026: spglobal.com
- University of Michigan, Surveys of Consumers, March 2026: lsa.umich.edu/soc
- OECD, Interim Economic Outlook, March 26, 2026: oecd.org
- Reuters, Fed economists poll; comments by Jefferson and Paulson (Mar 24–26, 2026): reuters.com
- AP, S&P 500 weekly performance and Nasdaq correction (Mar 27, 2026): apnews.com
- CNBC, Iran ceasefire rejection and market selloff (Mar 26, 2026): cnbc.com
- Reuters, Arm AGI CPU unveiling and Meta partnership (Mar 25, 2026): reuters.com
- Reuters, Meta and Google negligence verdicts, Los Angeles and New Mexico (Mar 25, 2026): reuters.com
- Reuters, OpenAI preferred equity offer to private-equity firms (Mar 2026): reuters.com
- Merck & Co., Press release: Merck to acquire Terns Pharmaceuticals, March 25, 2026: merck.com
- Bloomberg, Citigroup weighs acquisition of U.S. regional bank (Mar 27, 2026): bloomberg.com
- Reuters, Citigroup calls Bloomberg report baseless speculation (Mar 27, 2026): reuters.com
- Danone, Press release: Danone agrees to acquire Huel, March 23, 2026: danone.com