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20.03.202610:09 Forex Analysis & Reviews: Market spooked but resilient

Relevancia 03:00 2026-03-25 UTC--4

The United States and Israel continue to toss a lifeline to oil markets, which helps the S&P 500 find firmer footing. The broad index slid to the lowest levels since the November sell-off, when comments by Scott Bessent and Benjamin Netanyahu allowed bulls to buy the dip.

The US Treasury Secretary said the White House is considering lifting sanctions on Iran, which could free up roughly 140 million barrels of oil. Jerusalem is reportedly prepared to stop striking the enemy's energy infrastructure and to assist the United States in reopening the Strait of Hormuz. Officials claim that Iran no longer has operational uranium?enrichment capability and that the war will end sooner than commonly expected.

Winners and losers in the US equity market clearly indicate which scenario investors are leaning toward. Energy names are in the green. The main laggard is the materials sector, which will suffer from accelerating inflation and slowing growth. Indeed, Wall Street Journal experts forecast consumer prices to accelerate to 2.9% by the end of 2026 versus 2.6% in the January survey.

Winners/losers dynamics in US equity market

Exchange Rates 20.03.2026 analysis

JP Morgan warns that investors underestimate the economic damage from very high oil prices, preferring instead to talk about inflation acceleration. Since the 1970s, four out of five US recessions have been associated with spikes in Brent and WTI. The Wall Street Journal panel suggests a downturn for the US economy if oil stays above $138/bbl for 14 weeks. Survey ranges stretched from $90 to $200 per barrel and from 4 to 55 five-trading-day periods in duration.

S&P 500 traders are also concerned by the prospect that the Fed's intention to keep rates high could accelerate the slowdown in US GDP. After the ECB and the Bank of England signaled possible policy tightening, futures increased the odds that the fed funds rate would remain at its current level through the end of 2026 from 48% to 73%. Before the outbreak of hostilities in the Middle East, derivatives priced in that probability at a modest 4%.

S&P 500 and Brent performance

Exchange Rates 20.03.2026 analysis

Exchange Rates 20.03.2026 analysis

Despite a strong headwind, optimism has not disappeared from the equity market. Bank of America believes that the Fed will ultimately be forced to ease monetary policy. Therefore, a drop in the broad index to 6,600 would make an excellent buying opportunity, in the bank's view — suggesting the current correction may be nearing its end.

Technically, the S&P 500 index nearly reached the first of the previously announced short target levels at 6,510 and 6,390 on the daily chart. Quotes have returned to the prior pivot at 6,610. However, the market mood remains bearish. As long as the broad index trades below 6,665, it makes sense to keep focusing on short positions.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Marek Petkovich,
Analytical expert of InstaSpot
© 2007-2026
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