OPENING CALL

Oil prices were back up, and stock futures were falling early Tuesday.

Goldman Sachs said the war was causing the largest oil supply shock on record , with refined products rallying more sharply than crude.

Rising freight rates, higher natural gas costs, and trade restrictions could push prices even higher, it added.

According to Moody's a recession could become unavoidable if nothing changes within a few weeks.

Every recession since World War II-except for the brief COVID-19 pandemic recession-was preceded by a jump in oil prices, it said.

Even before the war, Moody's machine-learning-based leading indicators reflected a 49% chance of a recession beginning in the U.S. within the next 12 months.

Weak labor numbers had driven much of the worsening outlook, although Zandi noted that other economic indicators had turned lower in recent months.

The latest reading on fourth-quarter GDP showed growth of just 0.7% during the final three months of 2025.

And, while the S&P 500 SPX has been trading below its record high, most would agree that Wall Street wasn't pricing in a recession.

Meanwhile, investors will be looking ahead to the Federal Reserve's March decision on Wednesday.

Pictet Wealth Management said the Fed was likely to acknowledge risks to both sides of the mandate--maximum employment and stable prices--from the war.

RGA Investments said a potential delay to Kevin Warsh's confirmation as Chair was also significant.

Stocks to Watch

Kaltura plans to acquire PathFactor for $22 million to expand its AI capabilities. Shares gained 8% off market.

Lensar and Alcon agreed to terminate their merger agreement. Lensar sank after hours.

Nvidia rose premarket as Wall Street applauded news from the company's GTC developer event which kicked off Monday.

Rhythm Pharmaceuticals ' obesity treatment didn't meet primary endpoints in a recent trial. Shares fell off market.

TruBridge fell after it said it would delay its earnings report after finding errors in previous financial statements.

Watch For:

Pending home sales data for February are expected from the National Association of Realtors; Federal Open Market Committee meeting starts; earnings from Lululemon Athletica, Docusign

Today's Top Headlines/Must Reads:

--Why Defense-Contractor Stocks Aren't Rallying

--Iran Unleashes New Crackdown on Its People to Head Off Uprising

- -America Now Has More Spas and Gyms Than Stores Selling Actual Stuff

MARKET WRAPS

Forex:

The dollar rose as oil rebounded.

"The war has so far driven a terms-of-trade shock, real rate spread widening and tighter financial conditions, all benefiting the U.S. dollar, and we see little chance for a quick reversal," Danske Bank said.

The euro was at risk of falling unless there are positive developments in the Middle East, ING said, adding that the currency could drop below $1.1450 this week.

The euro's recovery against the dollar on Monday "may have short legs unless some headlines on ceasefire talks or NATO coordination on securing Hormuz start to appear."

Bonds:

Treasury yields rose across the curve as elevated oil prices-with Brent above $100 per barrel-continued to weigh on sentiment.

Yields were rising in a steepening manner, with more increases in long-dated Treasury yields than in short-dated ones.

"Concerns about supply of oil have this morning again lifted the oil price," SEB said.

TD Securities said the pricing out of Fed rate cuts in the wake of the oil price surge had helped push Treasury yields higher, but they were still expected to remain rangebound.

"We continue to expect the 4.0%-4.3% range to persist for now."

Energy:

Oil prices rose as U.S. allies rebuffed Trump's call to help unblock the Strait of Hormuz, which remains largely closed.

The benchmarks settled lower in the previous session on reports that some vessels were able to get through the strait.

"Continued tensions are keeping oil bulls well awake," Swissquote said.

"The geopolitical outlook remains fragile, making oil prices more prone to further upside than a sustained decline."

Prices were also supported by continued attacks against key energy infrastructure in the region, most recently at the Fujairah Oil Industry Zone in the UAE.

OCBC said the oil market was projected to face a daily shortfall of around 10 million barrels a day from a prolonged, near-total closure of the Strait of Hormuz, as it raised its Brent projection to $100 a barrel through midyear, from below $70.

Morningstar maintained its $65 a barrel midcycle forecast for Brent crude and assigned a low probability of raising it from the possible destruction of Iran's oil infrastructure.

It added that prolonged supply bottlenecks could lead to some demand destruction and that economic recession was a watch item.

Julius Baer said elevated oil prices were unlikely to last, with safe passage by "Iran-friendly" ships a development to watch.

"With major energy infrastructure damage absent, Iran's military threat softening, and activism towards safeguarding trade around Hormuz picking up, our base case is still that of a short-lived, intense energy price spike."

Metals:

Gold ticked higher.

"Although emergency oil stockpiles releases have helped temper price spikes, rising inflation risks have reduced expectations for a Fed rate cut, with higher interest rates typically weighing on non-yielding assets like gold," MUFG said.

Silver futures also rose.

Base Metals

Copper fell and aluminum was higher after electronic trading on the LME resumed on Monday following an outage of nearly three hours.

   TODAY'S TOP HEADLINES 

OpenAI to Cut Back on Side Projects in Push to 'Nail' Core Business

OpenAI's top executives are finalizing plans for a major strategy shift to refocus the company around coding and business users, recognizing that a "do everything all at once" strategy has put them on the defensive.

Fidji Simo, OpenAI's CEO of applications, previewed the changes to employees in an all-hands meeting, telling them that top leaders including CEO Sam Altman and chief research officer Mark Chen were actively looking at which areas to deprioritize. They expect to notify staff about the changes in the coming weeks.

British Airways Extends Suspension of Flights to Middle East

British Airways said it would extend the suspension of flights to the Middle East amid the ongoing conflict.

The IAG-owned airline said Monday that flights to Amman, Bahrain, Dubai and Tel Aviv have been canceled until May 31, while flights to Doha are canceled until April 30. This was "due to the continuing uncertainty of the situation in the Middle East and airspace instability, and to provide more clarity to our customers," it said.

Tesla to Build $4.3 Billion Battery Plant in U.S. It Can Boost the Slumping Stock.

Tesla has signed a supply agreement to build a $4.3 billion battery cell manufacturing plant, according to the U.S. government.

The Elon Musk-led electric-vehicle maker and South Korea's LG Energy Solution will build a lithium iron phosphate (LFP) prismatic battery cell manufacturing facility in Lansing, Michigan, launching production in 2027, the Interior Department said in a statement on Monday.

The Fed Keeps Getting Hit With New Shocks in Its Yearslong Inflation Fight

It's happening again.

For the fifth year running, Federal Reserve officials find themselves expecting inflation to fall back to their 2% goal only to be confronted with another disruption that complicates the path. First it was the pandemic's aftershocks. Then, Russia's war in Ukraine. Last year, a sweeping tariff program.

The Blowup That Exposed How America's Banks Are Entangled in Private Credit

One lending blowup is showing how America's banks helped fuel the private-credit boom, and what could happen in its unraveling.

Traditional lenders, which have been losing market share to investment firms that make riskier loans in exchange for higher interest rates, have touted their efforts to get a slice of Wall Street's newest action. But the details of the exposure are murky, and investors have grown skittish about banks' connections to private credit this year.

Australia's RBA Raises Rates in Split Decision as Inflation Fears Intensify

SYDNEY-Australia's central bank raised interest rates on Tuesday as the conflict in Iran worsened existing concerns around an acceleration in inflation and the country's reliance on oil imports.

The Reserve Bank of Australia increased the official cash rate to 4.10% from 3.85%. That marked the second increase this year and investor bets have shifted toward another rate rise in May as officials battle to rein in price pressures.

Israel Invades Lebanon, Opening New Front Against Iran

Israel's ground invasion of Lebanon opens a new front in a widening Middle East war, expanding its campaign against Iran by moving against one of its most powerful regional allies, Hezbollah, and stretching its military across an unprecedented number of conflict zones.

Israel said on Monday that it launched a ground operation in a southern swath of Lebanon and was prepared for a prolonged campaign. Israel's defense minister said Lebanese residents will be unable to return to the area until Israel determines it has removed the threat posed by Hezbollah after it fired hundreds of rockets and drones at Israel last week, surprising some who believed the group was too weakened from previous rounds of fighting to launch a fresh attack.

U.S.-China Summit Could Be Delayed. Why It May Not Rattle Markets.

The Iran conflict could delay a much-anticipated summit between President Donald Trump and Chinese leader Xi Jinping, but analysts don't expect it to derail the continued detente they expect to emerge from their next meeting-even if it's postponed.

Treasury Secretary Scott Bessent on Monday told CNBC that if the summit is delayed, it isn't because Trump asked China to police the Strait of Hormuz. "If it is for some reason rescheduled, it would be because of logistics and the president wants to remain in DC with the war effort and traveling abroad at a time like this may not be optimal."

Write to clare.kinloch@wsj.com

TODAY IN CANADA

Earnings:

Alimentation Couche Tard Inc.

Telesat Corp.

Titanium Transportation Group Inc.

Economic Indicators $(ET)$:

Nothing major scheduled

Stocks to Watch:

AGT Food & Ingredients 2025 Loss/Shr C$1.71; 2025 Rev C$3B; 2025 Loss Reflects Additional Share-Based Compensation Related to IPO and Non-Recurring Litigation Charges

Northview Residential REIT 4Q Net C$24.3M

SL Green to Sell the Residential and Retail Components of 7 Dey Street for Total Consideration of $222.6M to GO Residential; SL Green to Retain Ownership of Three Office Floors

Expected Major Events for Tuesday

04:30/JPN: Jan Tertiary Industry Index

04:30/JPN: Jan Revised Retail Sales

09:00/ITA: Feb CPI

09:30/UK: Feb Monthly Insolvency statistics

09:30/UK: Dec Card Spending statistics

10:05/GER: Mar ZEW Indicator of Economic Sentiment

12:55/US: 03/14 Johnson Redbook Retail Sales Index

14:00/US: Feb Pending Home Sales Index

20:30/US: API Weekly Statistical Bulletin

23:50/JPN: Feb Provisional Trade Statistics for the Month

All times in GMT. Powered by Onclusive and Dow Jones.

Expected Earnings for Tuesday

Abeona Therapeutics Inc (ABEO) is expected to report $-0.35 for 4Q.

Academy Sports & Outdoors Inc $(ASO)$ is expected to report $1.97 for 4Q.

Achieve Life Sciences Inc (ACHV) is expected to report $-0.27 for 4Q.

Alimentation Couche Tard Inc (ATD.T) is expected to report for 3Q.

Aterian Inc $(ATER)$ is expected to report for 4Q.

Cibus Inc $(CBUS)$ is expected to report for 4Q.

Citi Trends Inc (CTRN) is expected to report $0.80 for 4Q.

ClearPoint Neuro Inc (CLPT) is expected to report for 4Q.

Coda Octopus Group Inc (CODA) is expected to report for 1Q.

Colabor Group Inc (COLFF) is expected to report for 4Q.

ComScore Inc $(SCOR)$ is expected to report for 4Q.

Crescita Therapeutics Inc (CTX.T) is expected to report for 4Q.

Docusign Inc (DOCU) is expected to report $0.26 for 4Q.

ECA Marcellus Trust I (ECTM) is expected to report for 4Q.

HealthEquity Inc (HQY) is expected to report $0.45 for 4Q.

Instil Bio Inc (TIL) is expected to report for 4Q.

Lifeway Foods Inc $(LWAY)$ is expected to report $0.29 for 4Q.

Lithium Americas Corp (LAC,LAC.T) is expected to report $-0.07 for 4Q.

Neuronetics Inc $(STIM)$ is expected to report $-0.10 for 4Q.

NextNav Inc $(NN)$ is expected to report $-0.15 for 4Q.

Ocean Power Technologies Inc (OPTT) is expected to report $-0.04 for 3Q.

Oklo Inc $(OKLO)$ is expected to report $-0.17 for 4Q.

Ovid Therapeutics Inc $(OVID)$ is expected to report $-0.13 for 4Q.

Permianville Royalty Trust $(PVL)$ is expected to report for 4Q.

Pyxis Oncology Inc (PYXS) is expected to report $-0.33 for 4Q.

Qfin Holdings Inc - ADR $(QFIN)$ is expected to report for 4Q.

Rallybio Corp $(RLYB)$ is expected to report for 4Q.

Security National Financial Corp - Class A (SNFCA) is expected to report for 4Q.

Silvercrest Asset Management Group Inc $(SAMG)$ is expected to report $0.10 for 4Q.

Southland Holdings Inc (SLND) is expected to report $-0.21 for 4Q.

Star Equity Holdings Inc (STRR) is expected to report $-0.06 for 4Q.

Stoke Therapeutics Inc $(STOK)$ is expected to report $-0.70 for 4Q.

Table Trac Inc (TBTC) is expected to report for 4Q.

Telesat Corp $(TSAT)$ is expected to report $-1.05 for 4Q.

Tencent Music Entertainment Group - ADR $(TME)$ is expected to report $0.79 for 4Q.

Titan America SA (TTAM) is expected to report for 4Q.

Trevi Therapeutics Inc $(TRVI)$ is expected to report $-0.10 for 4Q.

Werewolf Therapeutics Inc $(HOWL)$ is expected to report $-0.35 for 4Q.

Zynex Inc $(ZYXIQ)$ is expected to report for 4Q.

lululemon athletica inc (LULU) is expected to report $4.77 for 4Q.

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ANALYST RATINGS ACTIONS

Adobe Cut to Hold From Buy by Argus Research

Alnylam Pharmaceuticals Cut to Hold From Buy by Jefferies

Circle Internet Group Raised to Buy From Hold by Clear Street

Customers Bancorp Raised to Equal-Weight From Underweight by Stephens & Co.

CytomX Therapeutics Raised to Overweight From Neutral by JP Morgan

Hain Celestial Cut to Underweight From Equal-Weight by Barclays

Incyte Cut to Hold From Buy by Jefferies

KinderCare Learning Cut to Underweight From Equal-Weight by Barclays

LifeMD Raised to Outperform From Neutral by Mizuho

NewLake Capital Partners Cut to Neutral From Buy by Compass Point

PennyMac Fincl Services Raised to Outperform From Market Perform by Keefe, Bruyette & Woods

Qualcomm Cut to Sell From Neutral by Seaport Global

Rocket Cos. Raised to Outperform From Market Perform by Keefe, Bruyette & Woods

Simply Good Foods Raised to Buy From Hold by Jefferies

Summit Therapeutics Cut to Hold From Buy by Jefferies

Upstart Holdings Raised to Buy From Neutral by BTIG

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 17, 2026 05:59 ET (09:59 GMT)

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