War-on stances have market on the defensive

Briefing.com Summary:

*The equity futures market is on the defensive as the U.S. and Iran have retained a war-on footing.

*Oil prices are higher and Treasury yields are higher, which is leading to weaker stock prices.

*Jobless claims are looking good for the economy, but not for a rate cut.

Stock market action is often classified as being either “risk-on” or “risk-off.” These days, it is thought of more as being either “war-on” or “war-off.” This morning, it is back to being “war-on,” which is feeding into some “risk-off” behavior.

Currently, the S&P 500 futures are down 57 points and are trading 0.9% below fair value, the Nasdaq 100 futures are down 265 points and are trading 1.1% below fair value, and the Dow Jones Industrial Average futures are down 365 points and are trading 0.8% below fair value.

This negative orientation is flowing from several sources.

• President Trump asserted that Iran’s negotiators “better get serious soon, before it is too late.”
• There is an Axios report that the Pentagon is looking at options that will strike a “final blow” to Iran, including the possible deployment of ground troops.
• A gaggle of Middle East countries, including Saudi Arabia and the UAE, invoked their right to self-defense.
• The carryover from yesterday when Iran’s foreign minister declared there are no negotiations with the U.S.

Following form from this compendium of “war-on” stances, oil prices have headed higher again. WTI crude futures are up 4.5% to $94.40/bbl, and Brent crude futures are up 4.9% to $102.06/bbl. In turn, Treasury yields are up, adhering to an inflation trade as opposed to safe-haven flows.

The 2-yr note yield is up five basis points to 3.93%, and the 10-yr note yield is up five basis points to 4.38%. Those moves come ahead of the $44 billion 7-yr note auction results at 1:00 p.m. ET. Prior auctions this week for 2-yr notes and 5-yr notes have been quite weak, presumably because of concerns that rates may still be headed higher due to the energy price shock and rising inflation expectations.

Separately, the latest jobless claims report didn’t give the Fed any incentive to cut rates.

Initial jobless claims for the week ending March 21 rose by 5,000 to 210,000 (Briefing.com consensus: 210,000), while continuing jobless claims decreased by 32,000 to 1.819 million, which is the lowest level since May 25, 2024.

The key takeaway from the report is that it is not indicative of a weak labor market, particularly with initial jobless claims—a leading indicator—continuing to run at historically low levels.

There isn’t any market-moving corporate news this morning. The market’s fixation is on the macro scene and the concern that there is still a “war on” footing.

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Originally Posted March 26, 2026 – War-on stances have market on the defensive