NEW YORK (AP) — Financial markets muddled through the first two months of the year. Then came the war.
The price of a barrel of Brent crude oil is above $100 for the first time since the summer of 2022 and gasoline prices have soared. That followed an extended period where the price of oil largely stayed between $60 and $70.
The biggest concern for global stock markets early in 2026 was artificial intelligence — whether some companies were spending too much on it and whether others would be rendered obsolete by the technology. Now, investors’ attention is squarely on how long the Iran war will last, how much inflation could jump and what that could mean for the economy. Dramatic intraday swings in indexes like the S&P 500 have been common.
The uncertainty brought on by the war complicates interest-rate decisions for the Federal Reserve, which has kept rates steady this year after reducing them three times at the end of last year. Cutting rates further would help the economy, but it could also put upward pressure on inflation. Keeping them high would help fight inflation, but also put pressure on economic growth.
Here’s a look at the swings in the markets in March:
Oil prices have been dictating the U.S. stock market’s sharp swings since the Iran war began. Brent crude, the benchmark for about three-quarters of global crude oil, has shot from roughly $70 per barrel to as high as $119 at times. Investors have flipped back and forth between hopes for a fairly quick end to the war and worries that a prolonged conflict will keep oil and natural gas from the Persian Gulf out of global markets, which could create a brutal blast of inflation.
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As February came to a close, drivers in many parts of the U.S. were paying under $3 for a gallon of gas. As of Tuesday, the nationwide average had topped $4 for the first time since 2022.
The jump in diesel, used in many freight and delivery trucks, is more pronounced, with the average for a gallon now $5.45, up from about $3.76 a gallon before the war began, according to AAA.
“Americans (are) spending hundreds of millions of dollars more on gasoline every day,” said Patrick De Haan, the head of petroleum analysis at fuel-tracking service GasBuddy.
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The U.S. stock market came into 2026 coming off three straight years of strong gains. Many international markets outpaced it in 2025 after trailing behind for a few years.
With a drop of nearly 4.6%, the S&P 500 had its worst quarterly performance since 2022. The Nasdaq composite, with a heavy allotment of technology stocks, on Thursday closed down more than 10% from the all-time high it set in October, a steep-enough fall that professional investors call it a “correction.”