Stocks recover after recent losses while oil near $100 keeps inflation concerns alive
MARKET INSIDER -U.S. stocks moved higher Friday as investors evaluated fresh economic data and the evolving war in the Middle East, which continues to drive volatility in global energy markets.
The Dow Jones Industrial Average rose about 0.4%, while the S&P 500 and the Nasdaq Composite gained roughly the same amount, recovering some ground after sharp losses in the previous session.
Economic data painted a mixed picture of the U.S. economy. A report from the U.S. Department of Commerce showed economic growth slowed more sharply than initially estimated in the fourth quarter due to weaker consumer spending and business investment. Meanwhile, separate data indicated consumer spending in January rose slightly more than expected.
Despite the mixed signals, expectations for monetary policy remain relatively stable. Traders now anticipate only one interest rate cut this year from the Federal Reserve, according to market data compiled by LSEG—down from expectations of two cuts before the Middle East conflict began on Feb. 28.
Analysts warn that rising energy prices could complicate the Fed’s policy path. With crude oil hovering near $100 per barrel amid the ongoing war involving United States, Israel, and Iran, inflation risks remain elevated.
“Inflation remains sticky, and energy prices could feed further into the pipeline,” said Peter Cardillo of Spartan Capital Securities, suggesting the central bank may keep interest rates unchanged for longer than investors previously expected.
Market sentiment also reflected growing caution among consumers. The University of Michigan reported that its consumer sentiment index slipped slightly in March, highlighting persistent economic uncertainty.
Energy markets remain the key variable for investors. Oil prices have surged since the conflict intensified around the Strait of Hormuz, which carries roughly one-fifth of global oil supply. Emergency measures—including a record reserve release by the International Energy Agency and a temporary U.S. waiver allowing some purchases of Russian oil stranded at sea—have so far failed to significantly reduce prices.
Meanwhile, financial markets are also facing stress in the private credit sector. Morgan Stanley halted redemptions from one of its private credit funds this week, following similar moves by BlackRock and Blue Owl Capital, raising concerns about liquidity across alternative lending markets.
In corporate news, Adobe shares fell more than 6% after the company announced that longtime CEO Shantanu Narayen will step down once a successor is named. Meanwhile, crypto-related stock Strategy jumped nearly 5% as Bitcoin prices rallied.
For the broader market, the outlook remains uncertain. While equities rebounded Friday, the S&P 500 and Dow Jones Industrial Average are still on track for a third consecutive week of losses—highlighting how the combination of geopolitical risk, high energy prices, and tightening financial conditions continues to weigh on investor confidence.
