Markets ended the week with a real sense of whiplash

30 March 2026

Markets ended the week with a real sense of whiplash, what started off looking like a potential stabilization quickly turned into a much more volatile and uneasy setup as developments in the Middle East kept shifting between negotiation headlines and renewed escalation. Early in the week there was a genuine bid across risk assets after Trump delayed strikes and talked up progress in talks with Iran, oil pulled back, equities bounced and yields eased as markets leaned into the idea that things might cool off. That optimism didn’t hold, and as the week progressed it became clearer that there was very little alignment between both sides, deadlines kept getting extended without anything concrete, and by the end of the week the tone had flipped back toward escalation risk. That constant back and forth drove the “see-saw” price action, but more importantly left markets leaning defensive into the close.

Global equities ended lower overall, with the MSCI ACWI down 1.5%, as the early-week rebound faded and selling picked up into the latter part of the week. By Friday, the shift in positioning was clear across asset classes, gold jumped 2.7% to $4,494 an ounce, Brent crude rose 4.2% to $112.6 per barrel, US 10-year yields pushed up to 4.43% and the dollar edged higher, all pointing to a market that is no longer comfortable with the near-term outlook. The way energy is being priced is really what is tying all of this together, because oil holding above $100 is no longer being treated as a temporary spike that fades on headlines, it is being absorbed as a level that reflects ongoing disruption to supply and shipping. Constraints around the Strait of Hormuz have not meaningfully improved, LNG flows are being disrupted, Qatar supply is under pressure and alternative sources are being stretched at the same time, which means even when prices pull back slightly the underlying balance remains tight. That tightening is already feeding into real costs across freight, insurance and industrial inputs, and once it starts moving through supply chains it becomes much harder to reverse quickly. As that pressure builds, it naturally feeds into rates and policy expectations, with the move higher in yields being driven much more by inflation concerns than any improvement in growth. The US 10-year at 4.43% reflects that shift, and central banks are starting to acknowledge it more openly, with Federal Reserve officials pointing out that sustained energy prices could push inflation higher again and make it harder to justify easing. That leaves markets adjusting to a scenario where policy stays restrictive for longer, even as growth shows signs of softening, which is not something equities tend to handle smoothly.

You can see that adjustment happening quite clearly in equity markets themselves, where the weakness is no longer isolated. The Nasdaq 100 has now moved into correction territory, the S&P 500 has extended its losing streak and is edging closer to similar levels, and volatility has picked up meaningfully with the VIX moving above 30, its highest level in months. The move is also becoming more broad-based, with consumer discretionary and other growth-sensitive sectors under pressure as higher fuel costs begin to weigh on spending expectations. There are also early signs that this is starting to show up in the real economy, particularly in the US where consumer sentiment dropped to a three-month low and inflation expectations moved higher, largely driven by rising gasoline prices. Nearly half of consumers are now pointing to prices as a key pressure on their finances, which is the kind of shift that tends to feed through into weaker discretionary demand if it persists.

Technology added another layer to the story because one of the market’s strongest themes became less straightforward during the week. A breakthrough from Google on AI efficiency triggered a sharp selloff in flash and storage-related memory names that had rallied aggressively, as the market started to recognize that efficiency gains can reduce demand in certain parts of the supply chain even while overall AI investment remains strong. Core areas like high-bandwidth memory are still supported, but the idea that all AI-linked stocks move in the same direction is starting to break down. At the same time, capital continues to flow into the space, with Anthropic now considering an IPO as soon as October after being valued around $380 billion, which highlights how strong the underlying investment cycle still is even as the market becomes more selective.

Across regions, the picture is becoming more uneven. In Europe, MSCI Europe finished the week up 0.6%, though that headline number masks what is happening underneath, with the Stoxx 600 tracking its worst month since the pandemic as growth expectations are revised lower and energy-sensitive sectors start to feel the squeeze. Japan held up better in equity terms with TOPIX up 1.1%, though rising yields and currency moves are beginning to complicate the policy backdrop. China moved in the opposite direction with MSCI China down 1.2%, showing some resilience through stronger industrial profits but also facing renewed pressure as trade tensions re-emerge, with Beijing launching new probes into US practices ahead of a potential summit. In Dubai, the week followed a similar pattern to global markets, with a technical rebound early on as sentiment improved briefly, before performance faded alongside the broader shift in tone, leaving the DFM down 0.7% by the end of the week.

Markets this morning:

Today morning, markets are picking up right where last week left off, with the tone still clearly defensive as the situation in the Middle East continues to broaden rather than stabilize. Asian equities moved lower across the board, with regional indices falling to their lowest levels this year, dragged down by technology weakness and concerns that higher oil prices will start to weigh more heavily on growth. Brent crude pushed further higher, trading above $115 per barrel and bringing year-to-date gains close to 90%, while metals such as aluminum also jumped after attacks on production facilities added another layer of supply risk. The entry of additional forces into the conflict and the expansion of US military presence are adding to fears that this could evolve into a longer and more complex confrontation, which is starting to shift market behavior away from short-term positioning toward something closer to capital preservation.

Upcoming key events/data:

Looking ahead, the focus shifts back to data, though it will all be interpreted through this more fragile backdrop. Monday brings eurozone economic and consumer confidence alongside Germany CPI, with Powell and Williams speaking and the Bank of Japan releasing its summary of opinions. Tuesday picks up with eurozone inflation, China PMIs and Japan Tokyo CPI, alongside US consumer confidence, Chicago PMI and JOLTS job openings. Wednesday brings US ISM manufacturing, ADP employment and retail sales, together with China and eurozone manufacturing data and Japan’s Tankan survey. Thursday moves to US jobless claims and trade data, Japan monetary base and South Korea inflation, while the ECB publishes its economic bulletin. Friday rounds things off with the US jobs report, where payroll growth around 55,000 is expected, alongside unemployment and services activity, as well as China services PMIs and French industrial production, which should give a clearer read on how growth is holding up as energy pressures build.

Written by:

CIO Office

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