Stocks Extend Downward Streak as Oil Prices, Yields Climb

Wall Street faces volatility amid inflation fears and geopolitical tensions

Mar. 21, 2026 at 2:22pm

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Stocks declined for a fourth consecutive week as rising oil prices and higher Treasury yields weighed on investor sentiment and reduced appetite for risky assets. The downturn came as continued disruptions to Middle East energy supplies pushed oil prices higher, fueling inflation fears. At the same time, signs of a weakening labor market and the ongoing U.S.–Israel conflict with Iran complicated the Federal Reserve's ability to provide clear guidance on monetary policy, adding further pressure on equities.

Why it matters

The connection between stocks and oil prices is likely to be temporary, but it highlights the challenges facing the Federal Reserve as it tries to balance its dual mandate of achieving price stability and maximum employment amid conflicting economic signals and geopolitical uncertainty.

The details

For the week, the Dow Jones Industrial Average fell by 2.11 percent, the S&P 500 dropped by 1.9 percent, the Nasdaq Composite declined by 2.07 percent, and the Russell 2000 fell by 1.68 percent. Market volatility eased earlier in the week but picked up toward the end, driven in part by the 'triple witching,' the simultaneous expiration of stock options, stock index options, and stock index futures.

  • On March 16, West Texas Intermediate crude oil futures approached the $100 mark in early trading.
  • On March 18, wholesale inflation price data came in above expectations ahead of the Federal Reserve's rate decision announcement.
  • On March 20, selling resumed, amplified by the 'triple witching' and escalating geopolitical tensions, which pushed oil prices and bond yields higher.

The players

Richard Saperstein

Chief investment officer at Treasury Partners.

Bret Kenwell

U.S. investment analyst at eToro.

Heather Long

Chief economist at Navy Federal Credit Union.

David Russell

Global head of market strategy at TradeStation.

Dennis Follmer

Chief investment officer at Montis Financial.

David Laut

Chief investment officer at Kerux Financial.

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What they’re saying

“Due to fears of oil-induced inflation and a potential global slowdown, stocks are currently inversely correlated with oil prices.”

— Richard Saperstein, Chief investment officer at Treasury Partners

“The Fed is in a bind. Slower growth and a softer labor market would normally argue for easing monetary policy. But inflation remains sticky, while surging oil prices add another layer of uncertainty to the outlook. Complicating matters further, the next Fed chair will face continued pressure from the White House to lower interest rates.”

— Bret Kenwell, U.S. investment analyst at eToro

“The Federal Reserve left rates unchanged and signaled the fog of war is making it harder to know what's next for the U.S. economy.”

— Heather Long, Chief economist at Navy Federal Credit Union

“The Fed isn't panicking about the Iran war yet, but the higher inflation estimate shows they're ready to get more hawkish if needed. Policymakers are watching both sides of the mandate, but price stability is getting more important.”

— David Russell, Global head of market strategy at TradeStation

“Wednesday's [Federal Open Market Committee] meeting provided little comfort to an already jittery market, as it's clear that the oil-driven spike, which is likely a temporary shock, is causing the central bank to delay any rate cut plans. That's a disappointment for a market that earlier this year was pricing in a much more dovish central bank.”

— Dennis Follmer, Chief investment officer at Montis Financial

What’s next

The market may not have reached its bottom and is still in the process of pricing in the Middle East conflict and the oil price outlook, as stocks have remained in negative territory year to date and hit new 2026 lows this week. Friday's quadruple witching tends to bring about increased intra-day volatility, which may be exacerbated this time around as this stock market has already been on edge for weeks heading into Friday, given uncertainty from the Middle East conflict and what higher oil prices may mean for consumer spending and earnings.

The takeaway

The connection between stocks and oil prices highlights the challenges facing the Federal Reserve as it tries to balance its dual mandate of achieving price stability and maximum employment amid conflicting economic signals and geopolitical uncertainty. Investors will be closely watching for any signs of a resolution to the U.S.–Israel conflict with Iran, which could help ease pressure on oil prices and provide some relief for the stock market.