Stock Daily — March 31, 2026

Dow eked out +0.11% to 45216, S&P fell 0.39% to 6343.72, Nasdaq dropped 0.73% to 20794.64. VIX pulled back from Friday’s 31.05 to 30.61, still firmly in fear territory. The 10-year yield fell about 10bp to 4.34%, driven by safe-haven buying.

All three indexes gapped up at the open — no black swans over the weekend, and the oversold bounce arrived on schedule. But the rally bled out fast. S&P and Nasdaq gave back all gains and turned negative by the afternoon; Dow barely held on thanks to financials. This “gap up, fade to flat or red” pattern has now happened three times.

WTI settled at $106.35/barrel, an explosive 6.73% single-day surge. Brent closed above $109. Yemen’s Houthi rebels formally joined the offensive against Israel, putting both the Red Sea and the Strait of Hormuz under simultaneous threat. A Kuwaiti tanker, the Al-Salmi, was hit near Dubai and caught fire — all 24 crew were rescued, but physical oil market panic hit instantly. Per the FT, physical tanker rates and Dubai spot crude are trading well above paper Brent futures, meaning the supply chain is genuinely tightening, not just futures speculation. Brent’s monthly gain is now the largest since 1990.

Trump continues his dual “threaten and reassure” strategy. He warned Tehran: reopen the Strait or we strike energy facilities and power plants. Then he called Iran’s leaders “very rational” and said negotiations are “going well.” Iran’s response: the proposals are unrealistic. Polymarket has “U.S. forces enter Iran by April 30” at 70%, “U.S.-Iran ceasefire by March 31” at 1%.

Powell spoke and said rates are in a “good place” to handle the energy shock, leaning toward “looking through” supply-side oil price increases, with long-term inflation expectations still anchored. The 10-year yield dropped sharply — but not because inflation expectations improved. Recession pricing is kicking in. Oil above $100, Michigan consumer sentiment at 53.3 last week (three-month low), and the Fed saying “look through it” — the market is trading the idea that the Fed won’t pivot because of oil, and the economy has to absorb the blow on its own.

Chips led losses for the session. The Philadelphia Semiconductor Index dropped over 4%, with memory and optical networking hit hardest. Per Goldman’s trading desk, Korean retail dip-buying flows that had been a consistent bid since mid-March are drying up. Sector divergence: Financials XLF +1.15%, Communication Services XLC +0.86%, Utilities XLU +0.72% held up. Tech XLK -1.86%, Industrials XLI -1.63%, Energy XLE -0.96% got hit. Energy stocks falling on a day when oil surged 6.73% is telling — the market isn’t trading “higher oil is good for energy companies” anymore, it’s trading “oil this high destroys demand.”

S&P’s drawdown from the cycle high is approaching 10%. The 6300 area corresponds to the mid-March consolidation zone — that’s the first line of support. Below that, the next stop is near 6150, around the 2025 all-time high. Q1 earnings season starts mid-April; whether corporate profits can withstand oil above $100 determines the next leg. As long as the Hormuz Strait risk premium doesn’t come off, price action will likely remain driven by geopolitical headlines, with earnings and economic data having diminished marginal impact.