Morning Bid: March is the cruellest month

By Mike Dolan

March 31 –

What matters in U.S. and global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

The turbulent first quarter of 2026 ends with a dull thud, as the Iran war continues to rumble and the energy price shock hits homes with average U.S. gas pump prices crossing $4 per gallon for the first time in more than three years.

The war’s expected timeline shifts from headline to headline. For those betting the conflict will end soon, the Wall Street Journal provided some ammunition, reporting on Monday that President Trump was prepared to end the war without opening the Strait of Hormuz – an encouraging thought that’s lifted U.S. stock futures on the last day of a bruising March.

I’ll get into that and more below.

But first, check out my latest column on how markets are giving central banks room to pause amid the energy shock.

And listen to today’s Morning Bid podcast, where I take stock of the first quarter’s major market moves. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.

MARCH IS THE CRUELLEST MONTH

While the WSJ report indicates that Trump is looking for an immediate offramp, those pessimistic about the duration of the war may focus more on the Iranian attack on an oil tanker in the Gulf that took place early Tuesday – as well as further reports of U.S. troops arriving in the region, this time 2,500 Marines.

Crude prices were choppy on Tuesday morning, ebbing slightly before climbing again to leave Brent hovering around $115 per barrel and U.S. crude around $104.

Stocks were mixed, meantime, with Wall Street futures in the green before the bell. And while European shares edged up on de-escalation hopes, the pan-European STOXX 600 still remains on track for its sharpest monthly fall since 2020.

Elsewhere, Asian trading had another painful session as major indexes closed lower – with South Korea’s KOSPI suffering its steepest monthly fall since 2008.

U.S. Treasury yields eased on Monday, though they remain on track for a steep monthly rise, with eurozone bond yields dipping as well. Fed Chair Jerome Powell helped the recovery in Treasuries yesterday when he noted that long-term inflation expectations remained “well anchored” – though he otherwise said the Fed would “wait and see” how the war ultimately impacts inflation.

But as the IMF pointed out on Monday, “all roads lead to higher inflation and slower growth”. In that vein, eurozone inflation leapt to 2.5% in March from 1.9% previously, while on Monday fresh German inflation data showed a jump to 2.8% from 2.0%.

Elsewhere, China business surveys showed some resilience this month, with factory activity growing at the fastest pace in a year, mirroring readings elsewhere.

Stateside, a big labor market week – culminating in the March jobs report on Good Friday – will kick off today with the release of February’s job openings data. And traders will also get a read on how U.S. consumers are weathering the energy shock so far with the release of the Conference Board’s latest consumer confidence index.

Chart of the day

Much like March manufacturing readings from Europe and America, China’s factory activity grew at the fastest pace in a year this month, an official survey showed on Tuesday.

It remains to be seen whether this was a spurt of activity before March’s oil price shock or simply occurred despite it given China’s large energy stockpiles. The reboot after the Lunar New Year holiday in February may also have been a factor.

Today’s events to watch

* U.S. March consumer confidence (10:00 AM EDT), JOLTS job openings (10:00 AM EDT)

* Fed’s Michael Barr and Michelle Bowman, Chicago Fed’s Austan Goolsbee and Kansas Fed’s Jeffrey Schmid all speak

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Mike Dolan)