March 26th Market Overview

Happy Thursday

Markets got hit from every direction today. A jury cracked open Big Tech's legal shield, oil pushed back above $100.

I think today was the first real session where the market started pricing in a longer conflict. Four weeks in and we're talking about seizing islands, not shaking hands. We need a deal from all sides before this thing gets dragged into oblivion and takes the market with it.

Let’s dig in...

Today's Big Picture

1. Social Media's Legal Shield Just Cracked 
A jury found Meta and YouTube liable for harming a young user, and the ruling targets addictive product design rather than content. That sidesteps Section 230, the law that has protected social media companies from liability for decades. Meta lost $119 billion in market cap today alone. Thousands of similar cases are already filed and waiting.

2. Peace Talks Stall as Oil Climbs 
Trump warned Iran to "get serious" before it is "too late." Tehran says it is reviewing the US proposal but refuses direct talks. The Pentagon is reportedly preparing options to seize Kharg Island, which handles 90 percent of Iran's crude exports, if diplomacy fails. Brent closed above $101 and I doubt shipping through the Strait restarts anytime soon despite what the Treasury is saying.

3. Global Economic Forecast Blows Up the Inflation Outlook 
The OECD, a group of 38 major economies, now projects US inflation at 4.2 percent this year. That is way above the Fed's own 2.7 percent estimate from last week. The group sees zero Fed rate cuts in 2026. BlackRock's $BLK Rob Kapito warned that crude could hit $150 even if a ceasefire happens tomorrow because supply chains do not snap back overnight.

Market Overview

Index Performance

Stock Spotlight

Micron $MU ( ▼ 6.93% )  
is down heavily since closing at an all-time high last Wednesday. BTIG noted the stock has not dropped this fast off a peak since the late nineties.

Alphabet $GOOG ( ▼ 3.03% )  
unveiled TurboQuant, a compression algorithm that cuts AI memory usage by at least six times. The entire memory and storage sector sold off hard on the news.

Sandisk $SNDK ( ▼ 11.05% )  
and Western Digital $WDC both took heavy losses as investors priced in lower hardware demand. The bull case here is Jevons Paradox, where efficiency gains actually increase total usage. The bear case is this becomes DeepSeek 2.0 for memory stocks.

Brown-Forman $BFAM ( ▲ 1.69% )  
caught a massive bid after Bloomberg reported Pernod Ricard $PRNDY is in talks for a potential buyout. Alcohol consumption is at a 90-year low per Gallup, making spirits consolidation the logical next step.

Big Name Updates

Apple $AAPL ( ▲ 0.17% )  
was the only Mag 7 name in the green today on reports it plans to open Siri to external AI assistants. A meaningful strategic shift if they actually follow through.

Nvidia $NVDA ( ▼ 4.05% )
traded lower as the entire tech sector caught a downgrade in sentiment. Every Mag 7 stock is now down double digits from its 52-week high.

Robinhood $HOOD ( ▼ 2.9% )  
landed a Buy initiation at Jefferies with an $88 target. The firm sees the brokerage as a primary beneficiary of the roughly $100 trillion generational wealth transfer.

Other Notable Company News

JetBlue $JBLU ( ▼ 3.16% )  
is reportedly exploring a sale and evaluating how regulators might view an acquisition by United $UAL, Alaska $AAL, or Southwest $LUV.

Better Home & Finance $BETR ( ▲ 5.41% )  
partnered with Coinbase $COIN to launch a product letting buyers use crypto as collateral for traditional mortgages. Fannie Mae $FNMA will accept them, bringing crypto into the mainstream mortgage system.

Super Micro Computer $SMCI ( ▼ 8.23% )  
traded lower after shareholders filed a class action over undisclosed sales to China that allegedly violated export laws.

MARA Holdings $MARA ( ▲ 3.68% )  
sold over a billion dollars in bitcoin to retire convertible debt at a steep discount, cutting total convertible obligations by about 30 percent.

Joby Aviation $JOBY ( ▼ 5.85% )  
plans to demonstrate its electric flying taxi in New York City on April 27 or 28.

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Sector Watch

Bond Market

The 10-year yield climbed to 4.42 percent as investors sold bonds on inflation fears. A $44 billion seven-year note auction drew soft demand this afternoon.

Policy Watch

The Fed 
Fed Governor Miran said he is more worried about the job market than inflation. He thinks the central bank can look through the oil shock because it is unlikely to cause lasting effects a year from now. I think that is overly optimistic given the OECD just put their inflation call at 4.2 percent. Markets are pricing the Fed funds rate unchanged through the rest of 2026.

The War 
The Pentagon is reportedly preparing final options if diplomacy fails:

• Seizing Kharg Island, Larak, or Abu Musa

• Blocking Iranian oil exports

• Ground operations

Iran is reinforcing Kharg with mines, troops, and extra air defenses. Gulf countries condemned Iran's strikes from Iraqi territory on their energy infrastructure. Iran is also drafting legislation to impose tolls on ships passing through the Strait of Hormuz.

Bessent said the oil market is "well supplied" and predicted shipping traffic will increase even before the Strait is formally secured. He also said the public is prepared for "short-term volatility" in exchange for "50 years of safety." That framing tells me the administration is preparing people for a drawn-out conflict.

Trade 
Trump's EU deal cleared a key hurdle when European lawmakers voted to support mutual tariff cuts. The deal caps US tariffs on most EU goods at 15 percent. Still needs final negotiations.

International

• OECD raised US growth forecast to 2 percent from 1.7 percent on the AI boom

• Eurozone cut to 0.8 percent from 1.2 percent

• China left unchanged at 4.4 percent

• Norway's central bank signaled a rate hike

• Germany's defense minister called the Iran war an "economic catastrophe"

What to Watch

Trump's Miami Speech 
The President speaks at a Saudi-backed investment conference Friday after the close. Any comments on the Middle East or oil could move markets over the weekend.

Fed Speakers 
Heavy rotation of central bank officials to close the week. Watch for any cracks in the "look through the oil spike" consensus. If even one governor hints at a hike, bonds will react.

Consumer Sentiment Friday 
Gas prices ticked down for the first time since the war started, but are still up about 99 cents per gallon since the conflict began. I want to see if $4 gas is finally starting to dent confidence.

Trump's Iran Deadline 
Wolfe Research flagged that the ambiguity between US and Iranian positions cannot last much longer. If Trump's implied five-day deadline passes without progress, expect escalation and another leg higher in oil.

Market Positioning
Deutsche Bank surveyed global investors this week. 54 percent expect a ceasefire by end of April. 76 percent by end of May. 55 percent do not see Brent topping $130. The market is overwhelmingly betting on a quick resolution. If that consensus breaks, the repricing will be ugly.

Thanks for reading - you are now the more informed 🙂

- John

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