Weekly Market Review - 23-03-2026

Mar 23
6 min read

Global markets faced a challenging week, with rising geopolitical tensions and renewed inflation concerns weighing on investor sentiment. Volatility increased across asset classes as developments in the Middle East introduced fresh uncertainty around energy prices and the broader economic outlook. Against this backdrop, investors have adopted a more cautious stance, with markets increasingly sensitive to both geopolitical developments and central bank signals.

Market Recap.

Global equity markets experienced a notably weaker week, with sharp declines across major indices as investor sentiment deteriorated amid ongoing geopolitical tensions and heightened market volatility.

UK equities saw the most significant fall, with the FTSE 100 ETF dropping 4.19%, reflecting broad-based weakness across large-cap stocks and continued sensitivity to rising energy prices and global uncertainty.

US markets also moved decisively lower. The Dow Jones Industrial Average ETF slipped 2.30%, while the S&P 500 ETF declined 2.00%, highlighting widespread pressure across the broader market. Technology stocks were not immune to the downturn, with the Nasdaq 100 ETF edging down 2.26%, indicating a more pronounced risk-off environment compared to recent weeks.

Overall, the week signalled a clear shift toward a more defensive market stance, with investors reacting to escalating geopolitical risks and increased uncertainty around the global economic outlook.

News.

The UK government has maintained a measured and cautious approach as the conflict involving Iran, Israel and the United States continues to evolve. While tensions remain elevated, UK officials have focused on supporting diplomatic efforts and regional stability rather than committing to direct military involvement.

Encouragingly, authorities are taking proactive steps to manage the domestic economic impact, particularly around rising energy and fuel costs. The Competition and Markets Authority has reiterated that it is closely monitoring fuel pricing and stands ready to act against any unfair practices, helping to protect consumers from excessive price increases.

In addition, ongoing dialogue between government and energy providers aims to ensure supply stability and minimise disruption, offering some reassurance to households and businesses during a period of heightened global uncertainty.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.

Inflation.

Inflation concerns have moved back into focus, in the United States, as rising energy prices linked to the Iran conflict begin to feed into the outlook.

The Federal Reserve held interest rates steady at 3.5%–3.75%, with policymakers adopting a cautious stance amid increasing uncertainty. The recent surge in oil prices has raised concerns that inflation could remain higher than previously expected.

Federal Reserve Chair Jerome Powell acknowledged the uncertainty surrounding the situation, stating that it is “too soon” to fully understand the economic impact of the conflict. He added, “we just don’t know what the effects of this will be and really no one does,” highlighting the unpredictable nature of current inflation pressures.

Updated forecasts show inflation is now expected to end the year at around 2.7%, up from previous estimates, largely driven by what Powell described as an “oil shock”.

Overall, the combination of rising energy prices and geopolitical instability is complicating the inflation outlook, reinforcing expectations that central banks will remain cautious in their policy decisions.

Central Banks.

European Central Bank policymaker Peter Kazimir warned that inflation risks remain skewed to the upside, signalling that policymakers should not rush into easing monetary policy. He stated that the ECB must remain vigilant, noting that “the job is not yet done” when it comes to bringing inflation fully under control.

Kazimir also highlighted the importance of a measured approach, adding that “we need to stay cautious” and ensure inflation is sustainably returning to target before considering rate cuts.

His comments reflect broader sentiment among central banks that, while inflation has moderated from its peak, underlying risks, particularly those linked to energy prices and geopolitical developments, mean policymakers are likely to maintain a higher-for-longer approach to interest rates.

Commodities.

Commodity markets have remained volatile this week, with precious metals holding elevated levels while oil prices continue to reflect geopolitical risk.

Gold is currently trading around $2,200 per ounce, while silver is near $25 per ounce, reflecting ongoing safe-haven demand from investors amid heightened uncertainty.

In energy markets, oil prices remain elevated following recent volatility. WTI crude is trading around $82 per barrel, while Brent crude is near $86 per barrel. Prices continue to be highly sensitive to developments in the Middle East, with markets closely monitoring the risk of disruption to key supply routes.

Overall, commodity markets continue to reflect a cautious investor outlook, with demand for defensive assets remaining firm while energy prices incorporate a persistent geopolitical risk premium.

ESG.

New EU sustainability rules are starting to have a clear impact, with early company reports showing a big improvement in how businesses share ESG information.

Under the Corporate Sustainability Reporting Directive (CSRD), companies are now required to provide more detailed and consistent data on areas such as environmental impact, governance, and risk. This is making it easier for investors to understand how companies are performing and to compare them more clearly.

Encouragingly, many businesses are beginning to take sustainability more seriously, building it into their overall strategy rather than treating it as a separate initiative.

Overall, while still in the early stages, these new rules are helping to improve transparency and could lead to better decision-making for both companies and investors over time.

Geopolitics.

Geopolitical risk remains elevated, with the situation in the Middle East continuing to evolve rapidly as the conflict involving Iran, Israel and the United States develops.

Recent reports highlight ongoing missile and drone strikes across the region, alongside increasing threats to critical energy infrastructure and key shipping routes such as the Strait of Hormuz. Iran has warned it could escalate further, including targeting energy assets across the Middle East, while the US has issued ultimatums and continues to consider additional military action.

At the same time, there are tentative signs of diplomatic movement, with reports suggesting potential discussions aimed at de-escalation, though the situation remains highly uncertain and subject to rapid change.

Overall, this remains a fast-moving and unpredictable situation. Developments are changing day by day, and markets are highly sensitive to any escalation or signs of de-escalation, particularly given the region’s critical role in global energy supply.

Week Ahead.

United States

In the United States, attention turns back to economic data following last week’s Federal Reserve decision, with markets looking for clearer direction on growth and inflation. The week begins on Monday 23 March with construction-related data, providing insight into the resilience of the housing sector in a higher interest rate environment. Focus then shifts to Tuesday 24 March, when S&P Global Flash PMI data will offer an early indication of business activity across both manufacturing and services. Later in the week, Thursday 26 March brings Initial Jobless Claims, which will be closely watched for any signs of softening in the labour market. The week concludes on Friday 27 March with the University of Michigan Consumer Sentiment Index (final reading), offering a key update on consumer confidence as rising energy prices continue to filter through the economy.

United Kingdom In the UK, the data calendar is relatively lighter following last week’s Bank of England rate decision, but markets will still be monitoring key indicators for signs of economic momentum. On Monday 23 March, public sector finance data provides an update on government borrowing and fiscal conditions. The main focus, however, comes on Tuesday 24 March, with the release of S&P Global Flash PMI data, offering a timely snapshot of business activity across both manufacturing and services sectors. Given the fragile growth backdrop and rising cost pressures, these figures will be closely watched for signs of either resilience or further weakness. In addition, markets will continue to monitor commentary from Bank of England officials throughout the week for further guidance on the outlook for interest rates.

Eurozone

Across the Eurozone, attention will centre on forward-looking indicators of economic activity and sentiment. On Monday 23 March, consumer confidence data will provide an early gauge of household sentiment. This is followed by Tuesday 24 March, when S&P Global Flash PMI data for the Eurozone, as well as key economies such as Germany and France, will offer insight into business conditions across the region. These releases will be particularly important in assessing whether rising energy prices and geopolitical tensions are beginning to weigh on growth. Alongside this, markets will continue to monitor commentary from European Central Bank policymakers throughout the week, especially following recent warnings that inflation risks may remain to the upside. It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.