Weekly Market Review: March 23 – March 27, 2026

The global markets endured their most challenging week since 2023, driven by a chain reaction of "Surging Energy Prices → Rising Inflation Expectations → Tightening Liquidity" sparked by the ongoing conflict in the Middle East.

10 Key Market Highlights and Data Points:

1. U.S. Equities Enter Correction Territory The S&P 500 fell 3.94% this week. On Friday (March 27), it closed at 6,366.96, dropping approximately 10% from its all-time high. Technically, it dipped below its 200-day moving average for the first time since May 2025. The Nasdaq Composite plummeted 2.4% on Friday alone.
2. Safe-Haven Assets: Gold Rebounds After Volatility Spot Gold surged 2.63% on Friday, closing at approximately $4,495.05 per ounce. Despite earlier pullbacks due to liquidity squeezes, safe-haven demand pushed prices higher as Iran rejected the proposed ceasefire agreement.
3. Japan’s Bond Market: Yields Hit 27-Year High The 10-year Japanese Government Bond (JGB) yield closed near 2.38% on Friday, its highest level since 1999. Markets are now re-pricing for a potential 25-basis-point hike (to 1.0%) by the Bank of Japan (BoJ) on April 28.
4. Oil Prices: War Premium Remains Firm Brent crude briefly approached $120 per barrel this week before closing above $108. Despite the U.S. announcing a release of 400 million barrels from its reserves, the 95% drop in traffic through the Strait of Hormuz kept supply shortage fears at the forefront.
5. U.S. Inflation Data: PCE Remains Stubborn The revised January PCE data released this week showed Headline PCE grew by 2.83% YoY and Core PCE grew by 3.06% YoY—both significantly above the Federal Reserve’s 2% target. This reinforced the "Higher for Longer" interest rate outlook.
6. Chip Stocks Lead Global Tech Sell-off Concerns over high energy costs squeezing economic growth and geopolitical risks hammered the semiconductor sector. NVIDIA dropped 4.2% on Friday, while AMD crashed 7.5%, dragging the Nasdaq lower.
7. Fear Index (VIX) Spikes The VIX, which measures market volatility and fear, broke above 31 this week. This reflects extreme investor anxiety regarding an escalation in the Middle East and global recession risks.
8. Currency Markets: Extreme Yen Weakness Despite rising JGB yields, the Yen remained under pressure due to Japan’s heavy reliance on imported energy. USD/JPY touched the 152-155 range, triggering verbal intervention warnings from the Japanese Ministry of Finance.
9. Poor Performance in European Markets The STOXX Europe 600 index fell 1.1% this week to 580.84. Surging energy prices are further straining Europe’s fragile manufacturing sector, with PMI data from Germany and France showing signs of contraction.
10. Indian Rupee Hits Record Low As a net energy importer, the Indian Rupee fell to a record low near 84.8 against the USD, reflecting the vulnerability of emerging markets to energy-driven inflation.

Coming Up Next Week: Focus will shift to the U.S. Non-Farm Payrolls (NFP) report on April 1. Continued strength in employment may give the Federal Reserve more reason to keep rates high, potentially further pressuring equity valuations.