U.S. Markets Close Mixed as Powell Calms Rate Hike Fears, Oil Tops $100
U.S. equities ended mostly lower Monday with the S&P 500 falling ~0.4% and extending its decline to roughly 9.3% from its recent peak, while the Dow edged higher as Fed Chair Powell's comments tempered rate hike fears.
Primary Catalyst: Powell Speaks, Oil Surges Past $100
Fed Chair Jerome Powell said at a Harvard University event that policymakers should "look past rising energy prices" from the Iran war and that there is "no need to hike interest rates now," providing temporary relief to markets. However, oil surged back above $100 per barrel as cease-fire prospects continued to dim, with analysts warning the Hormuz closure is drawing parallels to the 1973 OPEC oil embargo. Rate hike odds topped 50% for the first time this cycle before Powell's comments pushed them back down. Markets have grown "thicker-skinned" to Trump's peace signals, with the S&P 500 now down 7.7% since the Iran conflict began—worse than the median 6.1% decline during previous geopolitical shocks.
Macro Context: Higher-for-Longer Scenario Builds
New York Fed President John Williams said the Iran war will "likely push inflation higher in coming months" but signaled the Fed's current rate setting gives it room to wait and see. Bill Ackman called U.S. stocks "extremely cheap," while Strategas Research's Jason Trennert warned market pressure could continue "even if the war were to end tomorrow." The VIX ended last week at 31%—its highest level since last year's April sell-off—signaling elevated fear.
Sector Performance (NASDAQ)
NASDAQ Sector Performance - March 30, 2026
View data table
| Label | Value |
|---|---|
| Consumer Defensive | 0.7 |
| Basic Materials | 0.6 |
| Financial Services | 0.2 |
| Healthcare | -0.1 |
| Consumer Cyclical | -0.4 |
| Communication Services | -0.5 |
| Real Estate | -0.8 |
| Utilities | -1.3 |
| Industrials | -1.8 |
| Technology | -2.8 |
| Energy | -3.1 |
Investor Takeaway
Energy's sharp -3.1% decline despite oil above $100 signals profit-taking after a 30%+ YTD run, while Technology's -2.8% drop reflects continued valuation compression. Powell's "look past energy prices" stance provides a near-term floor for equities, but the S&P 500 approaching correction territory (down 9.3% from peak) and the Magnificent Seven hitting fresh lows suggest the selloff isn't over. Friday's jobs report and any Iran cease-fire developments will be the key catalysts this week.