Oil, investors, and nerves

March 7, 2026 Investors are nervous: oil has surged the most since 1983!

The past week on Wall Street was heavily influenced by geopolitics. Investors are closely watching the development of the conflict around Iran and the possible consequences for the global energy market. The conflict in the Middle East and the sharp rise in energy prices have brought investors to a state close to panic. In an interview with CNN, Bob McNally, head of the American consulting company Rapidan Energy Group, said: “Investors have moved from complacency to the brink of panic. The moment of panic is about to arrive.”

Particular concern is focused on the situation around the Strait of Hormuz – one of the most strategically important oil supply routes in the world. About one fifth of global oil exports pass through this narrow maritime corridor, so any threats to shipping immediately affect prices and investor sentiment.

Pressure on the stock market

Amid growing uncertainty, the main U.S. stock indices ended the week lower:

• Dow Jones Industrial Average – −3%
• S&P 500 – −2%
• Nasdaq Composite – −1.2%

The technical picture has also become more cautious. All three indices fell below their 50-day moving average – a level that many traders consider an important boundary between a rising and a weakening market. When indices consolidate below this line, it often signals a loss of upward momentum and a higher probability of volatility.

In addition, some institutional investors began reducing positions in riskier assets, locking in profits after the strong growth of recent months.

Oil became the main driver

The main event of the week was the energy market. Oil prices rose by about 35% in just a few days – the strongest weekly jump since 1983. Such movements are extremely rare for such a large and liquid market.

Reasons for the rise include:

• risk of supply disruptions from the Persian Gulf region
• possible restrictions on shipping through the Strait of Hormuz
• production cuts by several countries in the region
• increased speculative demand from traders and hedge funds

Some tanker companies have already begun avoiding passage through the Strait of Hormuz, which has further increased fears of a supply shortage. If oil transportation is restricted even for several weeks, the global economy may face a serious energy shock.

The key question for the market now is whether this surge is a short-term reaction to geopolitical risks or the beginning of a new energy crisis.

Reaction of different sectors

A sharp rise in energy prices traditionally redistributes capital between sectors of the economy.

The sectors most affected were:

• airlines, since the cost of aviation fuel directly depends on oil prices
• the construction sector due to rising costs of materials and energy
• cyclical companies sensitive to the overall state of the economy

Sectors performing better than the market include:

• energy companies benefiting from higher commodity prices
• the defense sector amid growing international tensions
• selected companies from the software sector

Stocks closely watched by the market

Investors are paying particular attention to several companies:

• Palantir Technologies – growth amid military contracts and demand for analytical platforms
• General Dynamics – one of the beneficiaries of increased interest in the defense sector
• Broadcom – recovery in share prices after the release of its financial report
• Vertiv Holdings – additional interest after the company was included in the S&P 500 index

Such stocks often become leaders of a new cycle if a stable upward trend is forming in the market.

Shift within the technology sector

The technology sector has shown noticeable divergence in recent days. Under pressure are manufacturers of chips for artificial intelligence and some semiconductor companies.

Relative strength is shown by companies from the software segment as well as developers of corporate platforms and analytical systems.

One of the reasons was the news that Oracle and OpenAI temporarily suspended plans to expand one of their data centers. This increased investors’ concerns that the pace of development of artificial intelligence infrastructure may temporarily slow down.

What will determine the market next week

Investors are currently closely watching several factors.

The first is the further movement of oil prices. If the growth continues, pressure on inflation and economic growth may increase.

The second is the development of the situation in the Middle East. Any news about de-escalation or, on the contrary, escalation of the conflict may sharply change market sentiment.

The third is Oracle’s financial report, which may provide insight into the state of demand for artificial intelligence infrastructure and cloud services.

Main conclusion

Financial markets have moved into a mode of increased caution. Geopolitics has again become a key factor capable of causing strong price movements. In such conditions many investors prefer a more cautious capital management strategy: reducing risk, closely monitoring leading stocks, and waiting for confirmation of a new market trend.

History shows that periods of high uncertainty often become precursors to larger market movements – the only question is in which direction they will unfold.