US equity indices closed sharply lower on Friday, as escalating Middle East tensions and surging energy costs intensified a broad market sell-off. The Dow Jones tumbled 1.4% to fall over 10% below its recent high while the Nasdaq extended its own correction after sliding 1.9% and the S&P 500 lost 1.4%. Tech heavyweights remained under significant pressure with Nvidia dropping 2.2%, Microsoft falling 2.5%, and Alphabet shedding 2.5%, while Meta saw steeper declines of 4% amid shifting risk sentiment. Financial and credit sensitive stocks also struggled as JPMorgan fell 3% and Visa lost 3.3% while energy giants like Exxon Mobil bucked the trend by gaining 3.5% as WTI crude futures topped $99 per barrel. Although President Trump extended the strike deadline on Iranian infrastructure to April 6th the closure of the Strait of Hormuz continues to fuel global stagflation fears and cement expectations of a fifth straight weekly loss.

Markets will continue to watch for signs of de-escalation in the Middle East as the US delayed its attacks past the end of this upcoming week, as the halt in exports from the Persian Gulf threatens global growth. Economic data in the US, which will see a shortened week due to Easter, will be headlined by the jobs report. Also, the ISM Manufacturing survey will also offer insights on how higher energy costs impact goods producers. The impact of expensive energy will also be the focus in Europe with the Eurozone's first inflation print since the start of the war. Likewise, both official and the broader Chinese PMIs will be featured for the first batch of data in the world's second-largest economy and largest energy importer. Regarding monetary policy, meeting details are due from the BoJ, RBA, and BoC.

The University of Michigan’s Consumer Sentiment Index fell sharply to 53.3 in March 2026, down from the preliminary estimate of 55.5 and below February’s 56.6. This places sentiment near record lows observed at the end of 2025, with declines spanning all age groups and political affiliations. Households with middle and higher incomes, as well as those with stock wealth, experienced the steepest drops in confidence. The downturn reflects the impact of rising gas prices and financial market volatility, both exacerbated by the ongoing Iran conflict. The short-term economic outlook plunged 14%, while expectations for personal finances over the next year dropped 10%. However, long-term expectations saw only modest declines, hinting that consumers may not anticipate the current challenges to persist indefinitely. Year-ahead inflation expectations rose to 3.8%, the largest monthly increase since April 2025, while long-term expectations edged down to 3.2%.

The yield on the US 10-year Treasury note rose to as high as 4.48% on Friday, its highest level since July 2025, before retreating to 4.42%. Traders remain concerned about the impact of the war with Iran on both inflation and economic growth, as prospects for de-escalation remain uncertain and oil prices continue to surge. Oil is trading close to its 2022 highs, with markets bracing for the conflict to extend into April as attacks persist across the Middle East. This comes despite US President Trump’s announcement of a 10-day pause on attacks targeting Iran’s energy infrastructure, through April 6, aimed at allowing more time for negotiations. However, some investors fear this window could also be used by the US to build up additional forces in the region. Meanwhile, traders have scaled back expectations for Fed rate cuts this year, although the central bank still sees one 25bps cut in 2026.

The unemployment rate in Brazil averaged 5.8% in the moving quarter to February of 2026, slightly higher than market expectations of 5.7% but still marking the lowest for the period on record. The figure compared to the 6.8% rate in the corresponding period of the previous year and the 5.2% in the moving quarter ending November of last year, which seasonally sees lower unemployment.

Mexico’s trade balance swung to a $0.46 billion deficit in February 2026, reversing last year’s $1.65 billion surplus and defying analysts’ expectation of a $1.2 billion surplus. Imports soared 20.8% year-on-year to $57.31 billion, as 22.6% jump in purchases of non-oil goods more than offset a 1.4% decline in oil imports. In particular, increases were seen for intermediate goods (29.5%) and consumer goods (5.5%). Meanwhile, exports climbed 15.8% to $56.85 billion, buoyed by a 17.5% rise in non-oil shipments, led by mining products, which soared 107.6%, and manufactured goods, up 17.1%. On the other hand, agricultural exports fell 12.8%, while automotive shipments declined 3.4%, led by an 8.7% drop to the United States. Meanwhile, overseas sales of oil products plunged 24.2%. Overall, non-oil exports continued to perform well, rising 15.9% to the United States and 26.4% to other international markets.