Weekly Market Commentary: Escalating Conflict in Middle East Hits Stocks, Oil

Sunflower Bank Weekly Market Commentary: March 9, 2026

Each week, our Wealth Management team analyzes the U.S. stock market and bond market activity and news of the previous week, summarizing their findings into a weekly market update report. The key points of this week's commentary, "Escalating Conflict in Middle East Hits Stocks, Oil," include:

• Equities across the globe declined last week. Catalysts included the escalating conflict in Iran and labor market data that showed the US economy lost jobs in February. Major domestic equity benchmarks declined broadly: the S&P 500 fell -2.0%, the Nasdaq 100 declined -1.2%, and the Russell 2000 dropped -4.0% last week. International benchmarks fared even worse. The MSCI EAFE Index – a measure of developed markets – fell almost -7%, and the MSCI Emerging Markets Index declined more than -8%.
• With the onset of conflict in Iran, risk assets sold off and oil prices rose sharply. The price of WTI crude oil closed at $91 per barrel last Friday, a 35% increase from $67 per barrel prior to the initial strikes. WTI futures reached as high as $119 per barrel over the weekend, reflecting expectations for further escalation following the appointment of US-opposed Mojtaba Khamenei as Supreme Leader.
• The situation in the Middle East risks creating a prolonged oil shock. Closure of the Strait of Hormuz will reduce oil supply by 20 million barrels per day, equivalent to 20% of global demand. Oil is a key input across the supply chain, and higher prices may lead to a jump in inflation and a reduction in economic activity.

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