March 17th Market Overview

Happy Tuesday

We are closing slightly green across the indices but Iran's security chief got killed overnight, signaling things are not de-escalating.

I don't think the market fully appreciates what's happening yet. This isn't a two-week conflict that resolves cleanly… actual production facilities are offline. At some point the inflation math catches up. For now though, more AI chips cure everything.

Let’s dig in...

Today's Big Picture

The Energy Shock Is Deepening

Iranian drones took out the Shah gas field in the UAE, the Fujairah export hub, and Iraq's Majnoon field in the same stretch. These aren't symbolic strikes… they're the first time active Gulf production facilities have been physically knocked offline. The Strait of Hormuz is effectively closed still for Western tankers. A few India and China-bound vessels are slipping , that's about it. ING is already calling $120 Brent if this drags another two weeks. For context, the 2022 Russia shock was sanctions and logistics. This is actual supply destruction plus a closed chokepoint.

And diesel at $5 isn't just a headline. National trucking fleets are already warning of 15-20% rate hikes. That flows straight into freight, groceries, farming, and construction costs next month.

Powell's Real Problem

Two months ago markets were pricing roughly 75 basis points in 2026 cuts. That's now under 50 and falling. The FOMC holds tomorrow, nobody disputes that. What actually matters is whether Powell uses the words "not transitory" when describing the energy shock, or hides behind "we'll wait for more data." One of those sentences ends the rate cut story. Watch the press conference at 2:30.

AI Keeps Running

The war isn't registering on hyperscaler earnings calls. Nvidia's GTC keynote put $1 trillion in chip orders on the board through 2027 yesterday.

Today Andy Jassy told Amazon staff internally that AWS is tracking toward $600 billion in revenue over the next decade, double his prior target. Amazon is guiding roughly $200 billion in capex for 2026, mostly AI infrastructure. S&P and Nasdaq are mildly green while the rest of the world burns. The AI supercycle and the oil shock are moving in opposite directions, and right now the supercycle is still winning.

Market Overview

Index Performance

Stock Spotlight

Delta Air Lines $DAL ( ▲ 6.71% )  
raised its first-quarter revenue guidance to high-single-digit growth after CEO Ed Bastian said at the JPMorgan Industrials Conference that demand is strong across every market. American Airlines $AAL also raised its outlook, and JetBlue moved in the same direction. Airlines say travelers are rushing to lock in fares before jet fuel costs push ticket prices higher.

Amazon $AMZN ( ▲ 1.63% )  
hit session highs after Reuters reported CEO Adam Jassy told staff privately that AWS could reach $600 billion over the next decade, crediting AI entirely.

Mastercard $MA ( ▼ 0.14% )  
agreed to buy stablecoin infrastructure provider BVNK for roughly $1.8 billion. Mastercard is building a bridge between digital assets and traditional payment rails. Shares were roughly flat on the news.

Big Name Updates

SoFi Technologies $SOFI ( ▼ 2.07% )  
drew a short from Muddy Waters Research. The firm accused the digital bank of manipulating loan metrics and hiding at least $312 million in unrecorded debt, comparing its accounting to Enron-style off-balance-sheet structures. SoFi did not comment.

Warner Bros. Discovery $WBD ( ▲ 0.49% )  
CEO David Zaslav could walk away with nearly $887 million if the Paramount Skydance acquisition closes, according to regulatory filings. The deal values Warner Bros. at roughly $110 billion.

Lemonade $LMND ( ▲ 16.32% )  
got an upgrade to overweight from Morgan Stanley with an $85 price target. The call centers on Lemonade's autonomous car insurance partnership with Tesla $TSLA, which offers owners a discount per mile driven on Full Self-Driving.

Other Notable Company News

Eli Lilly $LLY ( ▼ 6.28% )  
took a downgrade from HSBC citing stiff pricing competition in the obesity drug market. The stock is down nearly 29% over the past year.

Oklo $OKLO ( ▲ 1.71% )  
reached a safety design agreement with the Department of Energy for its Aurora reactor at Idaho National Laboratory, clearing the next phase of construction.

Swarmer $SWMR ( 0.0% )  
debuted publicly on Tuesday, opening at $12.50 against a $5 IPO price. The company builds autonomous drone software currently used in Ukrainian combat missions.

Beyond Meat $BYND ( ▼ 7.55% )  
delayed its 2025 annual report after missing fourth-quarter revenue estimates. The stock is below $1 and faces a Nasdaq delisting deadline of August 31.

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Sector Watch

Bond Market

The 10-year yield barely moved today, which is notable given what oil is doing. The dollar gave back some ground after its war-driven run higher. Tomorrow: $22 billion 30-year auction right before the Fed decision. That's an interesting sequence —> bond buyers will be pricing duration risk without knowing yet what Powell says.

Policy Watch

Fed

Hold tomorrow is certain. Powell speaks at 2:30 — that's the only thing that matters. Worth noting: this is his first press conference since Trump nominated Kevin Warsh to replace him in May. Every word gets read through that lens.

• Does the statement drop language suggesting the next cut is coming?

• Does Powell call this energy shock "not transitory" or punt to "more data"?

International

About 1,100 ships remain trapped in the Persian Gulf. Crossings through the Strait of Hormuz are down to roughly two per day from over 100 in peacetime. Trump posted on Truth Social that U.S. forces have already "decimated Iran's military" and don't need NATO's help. Stocks faded off their highs on that post — the market was clearly hoping allies would show up.

Fiscal & Trade

The EU is restarting ratification of its July 2025 trade deal with Washington.

• Trade committee votes Thursday, full plenary in late March or April

• EU lawmakers added language requiring the U.S. to honor original terms before anything takes effect

Trump pushed his China trip back roughly a month due to the Iran conflict.

What to Watch

Fed Decision

Tomorrow at 2 PM ET. The hold is certain. Whether Powell signals the easing cycle is over is not.

Producer Price Index

February wholesale inflation data drops tomorrow morning. With diesel above $5 a gallon and energy costs moving through the supply chain, this number is worth watching closely.

Lululemon $LULU
reports after the close tonight. A clean read on whether high-end consumers are starting to pull back on discretionary spending.

Micron Technology 
reports Wednesday. The company recently announced a second chip fab in Taiwan. The question is whether AI memory demand is accelerating fast enough to justify it.

Oil Futures Curve

January 2027 WTI contracts moved from $68 to above $75 in a single week. Futures aren't price forecasts, but they reflect how traders are hedging long-duration Hormuz disruption risk. If those far-out contracts keep climbing, the market is quietly telling you this conflict has a long tail.

Thanks for reading - you are now the more informed 🙂

- John

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