MW Epic Fury has already cancelled out Big Beautiful Bill's tax refunds - even if the Iran war ended today

By Steve Goldstein

Economists say increased gasoline costs will offset the impact of bigger tax refunds

Rising prices at the pump will offset the boost from bigger tax refunds, even under the most generous assumptions.

It's been quite a 24 hours, with Israel striking an Iranian gas field, Iran replying with an attack on the world's biggest liquefied natural gas facility in Qatar, and in between Federal Reserve Chair Jerome Powell ducking and weaving on what the war will mean to the economy.

But it sets up the backdrop for an analysis done by four economists at the Stanford Institute for Economic Policy Research on the impact of the war on the wallets of Americans.

They compare the tax refunds stemming from the One Big Beautiful Bill - that giant piece of tax legislation passed last year - with the surge in gasoline prices.

The Internal Revenue Service has data on tax refunds through Feb. 27. They're up, on average, by 11%, which is a benefit of $360 per filer compared to the same period of 2025. Outside estimates expect the average tax refund when all is said and done to be even higher - Morgan Stanley says to $534 and the Tax Foundation to $748.

Neale Mahoney, Jared Bernstein, Caleb Brobst and Ryan Cummings use the highest number - $748 - to compare to what is likely to happen at the pump over the course of the year. Bernstein was the former chair of the Council of Economic Advisers in the Biden administration, and Cummings was an economist at the White House between 2021 and 2023.

They use two estimates from Goldman Sachs on the direction of Brent oil futures, one taken before the war, and one taken after. The key thing here is that even the new Goldman Sachs estimate forecasts a three-week Strait of Hormuz closure. Given that Thursday marks the 20th day of the conflict, that means the war basically needs to end right now for even the newer Goldman forecast to hold true. The rest of the Goldman forecast is for prices to retreat halfway back to the pre-war baseline by April and 85% of the way back by June.

Using a simple model of the pass-through of crude oil to retail gasoline prices, the Stanford economists conclude that households will pay an extra $740 in gas costs this year.

Bernstein, in his own Substack post on the study, wonders how Americans will absorb this inflationary hit. "Given Trumpian-induced inflationary pressures, first from tariffs and now from the war, following on the heels of a very big pothole after a long, smooth drive (the pandemic inflation following years of low, steady price growth), I'm nervous that the energy price shock from the war might reverberate more than it should, making it harder for the Fed to look through it, and a potentially anchoring-damaging event," he said.

The market

U.S. stock futures (ES00) (NQ00) slipped as oil prices - the Brent contract (BRN00) in particular - surged. The yield on the 10-year Treasury BX:TMUBMUSD10Y edged up 2 basis points to 4.28%.

   Key asset performance                                                Last       5d      1m      YTD     1y 
   S&P 500                                                              6624.7     -2.23%  -3.73%  -3.23%  16.73% 
   Nasdaq Composite                                                     22,152.42  -2.48%  -2.64%  -4.69%  24.80% 
   10-year Treasury                                                     4.283      1.40    20.30   11.10   4.80 
   Gold                                                                 4710.6     -7.35%  -6.06%  8.73%   54.30% 
   Oil                                                                  96.78      0.39%   45.16%  68.58%  41.55% 
   Data: MarketWatch. Treasury yields change expressed in basis points 

The buzz

President Donald Trump threatened to hit the South Pars gas field again even as he distanced himself from the Israeli attack on the same field that prompted Iranian retaliation against a key Qatari facility.

Micron Technology $(MU)$ guided to a much stronger quarter than analysts expected as the company benefited from surging demand for memory computer chips.

Alibaba $(BABA)$ reported a 67% slide in adjusted earnings per share, with FedEx $(FDX)$ results coming after hours.

The economics calendar features weekly jobless claims, the Philadelphia Fed's manufacturing index and new-home sales.

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The chart

JPMorgan has produced this table on the sensitivity of S&P 500 company earnings, based on the typical impact to GDP from rising oil prices. Strategists led by Dubravko Lakos-Bujas say the market isn't worried enough about demand. "Much of the market's attention has been focused on the inflationary impact from higher oil prices, but in our view, the bigger and more consequential question is the potential negative transmission mechanism into demand if the Strait does not reopen," they say. If oil prices stay at $110 for the rest of the year, the hit to consensus earnings per share estimates could be as much as 5%, they say.

Top tickers

Here were the top performing stock-market tickers on MarketWatch as of 5 a.m. Eastern.

   Ticker  Security name 
   MU      Micron Technology 
   NVDA    Nvidia 
   TSLA    Tesla 
   TSM     Taiwan Semiconductor Manufacturing Co. 
   GME     GameStop 
   NIO     Nio 
   MSFT    Microsoft 
   AMD     Advanced Micro Devices 
   PLTR    Palantir Technologies 
   SNDK    Sandisk 

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March 19, 2026 06:38 ET (10:38 GMT)

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