Markets In Focus: The Week That Was and What’s On Tap Week-Ending 3/6/2026
THE WEEK THAT WAS
The US equity market faced meaningful headwinds over the last 5 trading days ending March 6, 2026, as geopolitical escalation, surging energy prices, and a disappointing labor report combined to drive risk aversion. Benchmarks closed broadly lower, with dispersion underscoring pressure on smaller and equal-weighted names. The S&P 500 declined 2.0%, the Nasdaq Composite fell 1.2%, the Russell 2000 posted the largest drop at 4.1%, and the Invesco S&P 500 Equal Weight ETF (RSP) retreated 3.3%. This pattern reflects a flight from cyclical and mid/small-cap exposure amid macro uncertainty.
Key Geopolitical and Macro Drivers
The primary catalyst was the intensification of Operation Epic Fury—the US-Israel joint military campaign against Iran, involving strikes on leadership, missile infrastructure, nuclear-related sites, and naval assets since late February 2026. Iranian retaliations and threats to the Strait of Hormuz triggered significant oil price surges, with WTI and Brent crude rallying sharply to multi-month (and in some cases multi-year) highs, fueling inflation concerns and supply disruption fears. Compounding this, the February non-farm payrolls report (released March 6) showed an unexpected decline of -92,000 jobs—well below expectations of +50-60K—while unemployment ticked up to ~4.4%, with softer prior revisions. These developments amplified stagflation and recession anxieties, contributing to elevated volatility and a broader pullback.
Sector and Earnings Highlights
Sector performance varied notably, with financials emerging as the weakest amid emerging private credit concerns. Rising defaults, liquidity strains, redemption pressures (including breaches of withdrawal limits at major funds), and scrutiny over illiquid exposures began to rear their head, pressuring credit-sensitive names and contributing to the sector’s underperformance. Energy showed relative resilience on the back of oil’s rally, while defense-related areas benefited selectively from the geopolitical backdrop. Tech faced mixed pressures but saw resilience in AI-themed software stocks, supported by strong earnings: Broadcom (AVGO) reported record Q1 FY2026 revenue of ~$19.3B (up 29% YoY) driven by AI demand and upbeat guidance; CrowdStrike (CRWD) surpassed $5B in ending ARR (up 24% YoY) with solid Q4 growth and net new ARR acceleration; and Marvell Technology (MRVL) delivered record Q4 revenue of ~$2.22B (up significantly YoY) on robust AI chip momentum and positive outlook.
Outlook
Heading into the weekend, markets appear poised for continued caution as investors digest the interplay of persistent geopolitical risks in the Middle East, elevated oil-driven inflation pressures, and signs of labor market softening. Near-term volatility is likely to remain elevated, with potential for further rotation away from riskier segments if energy costs stay firm or additional macro data disappoints. However, pockets of resilience in AI and cybersecurity—bolstered by fundamental strength in recent earnings—could provide selective support, particularly if broader selling exhausts. The week ahead will hinge on any de-escalation signals from the Iran conflict, follow-through on energy market dynamics, and incoming data on inflation or consumer sentiment.
THE WEEK AHEAD
This is an unusually data-dense week culminating Friday with a triple release delivering the Fed’s preferred inflation gauge, a key read on business investment, and a comprehensive look at consumer spending — all arriving one week before the March 18 FOMC decision.
Macroeconomic Data
The week opens with February CPI on Wednesday, March 11 (8:30 a.m. ET). January printed +0.2% MoM / +2.4% YoY. Consensus for February calls for +0.3% MoM headline and +0.3% MoM core, reflecting still-firm shelter inflation and early tariff pass-through in goods. The core figure will drive market reaction; a print above +0.3% MoM would complicate the expected rate path heading into the March FOMC and likely pressure the front end of the curve. Thursday brings weekly Markets In Focus: The Week That Was and What’s On Tap Week-Ending 03/06/2026 initial jobless claims, which have regained relevance as federal workforce reductions and softer private payroll trends begin to surface.
Friday morning delivers three simultaneous 8:30 a.m. releases. The January PCE Price Index, the Fed’s preferred inflation measure, arrives alongside the Personal Income and Outlays report (consensus: +0.4% income, +0.3% spending). Markets will focus on core PCE, expected at +0.3% MoM and roughly +2.8% YoY. The Durable Goods Orders advance report (consensus +1.0% headline) provides the first read on business investment momentum in 2026. Within the report, core capital goods orders ex-aircraft, often referred to as core capex, are expected around +0.2%, an important signal for corporate confidence amid tariff and policy uncertainty. Together, Friday’s releases provide a full macro snapshot just five trading days before the Fed meets.
Prominent Earnings
AI-linked earnings dominate. Oracle (Monday) and HPE (Monday) provide insight into cloud infrastructure and AI server demand. UiPath (Wednesday) gauges enterprise automation adoption, while Adobe (Thursday) highlights AI-driven monetization trends. On the consumer side, Dick’s Sporting Goods (Thursday) tests discretionary demand, and Casey’s General Stores offers a ground-level read on rural consumer conditions.
DISCLOSURES
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