The conflict with Iran remained the primary driver of market sentiment this week. Oil prices spiked as global supplies remained disrupted with the Strait of Hormuz remaining essentially closed. Against this geopolitical backdrop, a significant downward revision to fourth quarter gross domestic product (GDP), and firm inflation and employment data added to the complex set of factors facing the Federal Open Market Committee (FOMC) as it meets next week.
Key economic releases painted a mixed picture. Fourth quarter GDP growth was revised down to an annualized rate of 0.7% from the 1.4% advance estimate, reflecting downward revisions to exports, consumer spending, and investment, with the government shutdown cited as subtracting an estimated 1.0 percentage point from growth. The Consumer Price Index (CPI) for February rose 0.3% month-over-month and 2.4% year-over-year, in line with expectations, while core CPI, which excludes volatile food and energy prices, increased 0.2% and 2.5% respectively. Notably, the February data predates the Iran escalation and does not capture recent energy cost increases, which may lead to broader inflationary impacts. The January Personal Consumption Expenditures (PCE) Index rose 0.3% month-over-month and 2.8% year-over-year, while core PCE increased 0.4% and 3.1% respectively, underscoring that inflation remains above the Fed’s 2% target. As prices at the pump spiked, Consumer Confidence slipped to a three-month low. The preliminary March Sentiment Index fell to 55.5 from 56.6 according to the University of Michigan; however, longer term inflation expectations remained anchored.
Labor market data released this week continued to reflect tight conditions. The Job Openings and Labor Turnover Survey (JOLTS) report beat expectations with 6.9 million jobs created in January, reflecting 0.9 open jobs per unemployed person and fewer layoffs. Initial Jobless Claims remained steady with the 4-week moving average at 212,000. The FOMC faces growing challenges as they strive to balance a cooling labor market with rising inflationary pressures.
These crosscurrents shaped financial markets throughout the week. Treasury yields moved higher as oil-driven inflation expectations outweighed the softer GDP data, with the 2-year U.S. Treasury yield rising to approximately 3.73% and the 10-year to approximately 4.28% at the time of this writing. U.S. equities pulled back, with the S&P 500 declining approximately 1.5% on the week to close near 6,673, its lowest level since November and approximately 5% below the all-time high set in late January. West Texas Intermediate (WTI) crude oil rose to nearly $120 per barrel earlier in the week before settling back to approximately $96, and gold traded near $5,100 per ounce.
Looking ahead, next week’s FOMC meeting will be the focal point for investors, with the Committee widely expected to hold the federal funds rate at 3.50%–3.75%, but the updated Summary of Economic Projections and dot plot are likely to reveal how policymakers are weighing a weakening labor market against inflationary risks. The Chandler team expects the timing for Fed rate cuts to be pushed back due to the spike in inflationary risk, which may prove to be temporary or more broad-based. Portfolios remain positioned with an emphasis on safety, liquidity, and disciplined credit risk management.
Next Week: FOMC Rate Decision, Summary of Economic Projections, Leading Index, Pending Home Sales, Producer Price Index, Philadelphia Fed Business Outlook, Jobless Claims, Empire Manufacturing, Industrial Production, Capacity Utilization, NAHB Housing Market Index, ADP Weekly Employment Change, New York Fed Services Business Activity, MBA Mortgage Applications, Factory Orders, Durable Goods Orders, TIC Flows, New Home Sales, Building Permits, Wholesale Inventories.
© 2026 Chandler Asset Management, Inc. An SEC Registered Investment Adviser. Data source: Bloomberg, Federal Reserve, and ADP. This report is provided for informational purposes only and should not be construed as specific investment or legal advice. The information contained herein was obtained from sources believed to be reliable as of the date of publication, but may become outdated or superseded at any time without notice. Any opinions or views expressed are based on current market conditions and are subject to change. This report may contain forecasts and forward-looking statements which are inherently limited and should not be relied upon as an indicator of future results. Past performance is not indicative of future results. This report is not intended to constitute an offer, solicitation, recommendation, or advice regarding any securities or investment strategy and should not be regarded by recipients as a substitute for the exercise of their own judgment. Fixed income investments are subject to interest rate, credit, and market risk. Interest rate risk: The value of fixed income investments will decline as interest rates rise. Credit risk: the possibility that the borrower may not be able to repay interest and principal. Low-rated bonds generally have to pay higher interest rates to attract investors willing to take on greater risk. Market risk: the bond market, in general, could decline due to economic conditions, especially during periods of rising interest rates.