New York, 12 March 2026 – U.S. stock markets traded cautiously as investors navigated volatile oil prices, geopolitical tensions in the Middle East and fresh inflation data that could shape the path of monetary policy in the months ahead.
The Dow Jones Industrial Average slipped about 0.6%, while the S&P 500 finished largely flat and the Nasdaq Composite edged slightly higher as technology shares helped offset broader market weakness.
Market sentiment has been dominated by sharp movements in energy prices following escalating tensions involving the United States, Israel and Iran, which have raised concerns about disruptions to global oil supply routes. Brent crude rose close to US$92 per barrel while U.S. crude traded near US$87, reflecting fears of shipping disruptions around the Strait of Hormuz, a critical corridor for global energy trade.
Inflation Data Meets Expectations
Investors also closely watched the latest U.S. consumer price index (CPI) report, which showed inflation rising 0.3% month-on-month and 2.4% year-on-year in February, largely in line with market expectations. Core inflation, excluding food and energy, increased 0.2% on the month and 2.5% annually.
Although the figures matched forecasts, analysts noted that the data does not yet fully reflect the recent surge in energy prices triggered by geopolitical tensions, meaning inflation pressures could intensify in coming months if oil prices remain elevated.
Tech Stocks Provide Market Support
Despite broader uncertainty, technology and artificial-intelligence-related stocks helped stabilise the market.
Shares of Oracle surged more than 8% after the company reported stronger-than-expected earnings, highlighting continued investor enthusiasm for AI infrastructure and cloud-computing investments.
Semiconductor and AI-related companies also attracted buying interest, with Nvidia advancing after announcing a US$2 billion investment in cloud provider Nebius, further strengthening optimism around the AI ecosystem.
Energy stocks, meanwhile, benefited from rising crude prices, while sectors more sensitive to consumer spending faced pressure amid concerns about higher fuel costs.
Bond Yields Climb as Markets Reprice Risks
At the same time, the 10-year U.S. Treasury yield climbed above 4.2%, reflecting investor concerns that persistent inflation or energy shocks could keep interest rates elevated for longer.
Higher yields can weigh on equity valuations, particularly for growth stocks, making bond markets a key indicator for equity investors.
Markets Caught Between Geopolitics and Policy
The broader market outlook remains uncertain as investors assess how geopolitical developments could influence inflation, growth and monetary policy.
If energy prices continue to rise due to supply disruptions in the Middle East, economists warn that the global economy could face renewed inflation pressures just as central banks were hoping for price stability.
For now, global markets appear to be caught between two powerful forces: strong technological investment momentum driven by artificial intelligence, and geopolitical risks that threaten to disrupt energy markets and economic stability.
