The attacks on upstream oil/gas assets across the Middle East this week sparked turmoil across global energy markets. 

Israel set off the chain reaction with its attack on Iran’s South Pars gas field on Wednesday morning, followed by Iran’s retaliatory strikes on Qatar’s LNG plant, Saudi Arabia’s Red Sea export hub, and other targets across the surrounding Gulf states.

This week’s attacks on critical upstream energy facilities across the Middle East, by both Iran and Israel, suggest the risk of prolonged outages and tighter global gas markets.

Read: 

• WTI-Brent Spread Explodes As Trump Mulls Export Ban; Iran’s Attack On Qatar’s LNG “Worse Than Nord Stream”

That is bullish for U.S. LNG exporters along the Gulf of America, where waters remain calm and the risk of major conflict is low.

But as Criterion Research President, James Bevan, details below, these U.S. export hubs are already operating at or near full capacity.

The Strike

Iranian ballistic missiles struck Qatar’s Ras Laffan Industrial City in two waves over 12 hours on March 18-19, causing extensive damage to both the Shell-QatarEnergy Pearl GTL facility and the LNG complex. The Pearl GTL complex, the world’s largest gas-to-liquids facility processing approximately 1.6 Bcf/d of feed gas, was hit first on Wednesday evening. A second wave early Thursday struck LNG facilities directly. QatarEnergy confirmed sizeable fires and extensive further damage but did not specify which trains were affected.

QatarEnergy Statement on Missile Attacks on its LNG Facilities

In addition to the previous attack on Ras Laffan Industrial City on Wednesday 18 March 2026 that resulted in extensive damage to the Pearl GTL (Gas-to-Liquids) facility, QatarEnergy confirms that in the early hours…

— QatarEnergy (@qatarenergy) March 19, 2026

Qatar’s Ministry of Defence reported five ballistic missiles were fired at the complex; four were intercepted, and the fifth struck home. No casualties were reported, and all personnel had been evacuated hours earlier after the IRGC issued explicit warnings naming Ras Laffan among five energy complexes across Saudi Arabia, the UAE, and Qatar that it designated as targets. The fires have been showing up on NASA satellite flyovers, affirming the situation on-site.

The attacks were retaliation for Israeli strikes on Iran’s South Pars gas field. The IRGC named five energy complexes across Saudi Arabia, the UAE, and Qatar as targets. Key developments across the Gulf:

• Saudi Arabia intercepted missiles targeting Riyadh and the eastern region

• UAE shut its Habshan gas facility and Bab oil and gas field after falling debris from intercepts

• Brent crude briefly touched $119/bbl before settling around $114; TTF jumped 16%+ to 63.7 euros/MWh

• Strait of Hormuz remains effectively closed to tanker traffic

• Trump warned the U.S. would destroy the entirety of South Pars if Iran strikes Qatar’s LNG facilities again

What’s Offline

Ras Laffan houses roughly 77 MTPA of liquefaction capacity, approximately 20% of global LNG supply. That capacity had already been offline since March 2, when earlier Iranian drone strikes forced a halt and triggered force majeure. The market initially treated the shutdown as temporary. Confirmed physical damage from this week’s strikes changes the calculus:

• Prior restart estimates assumed 2 weeks to resume + 2 weeks to stabilize

• Structural damage to LNG trains, if confirmed, could push the timeline to months or years

• Pearl GTL alone may face a multi-year outage if reports of destroyed air separation units prove accurate

US LNG: Running Full Out Into the Gap

While roughly a fifth of global LNG supply sits offline and damaged in Qatar, US export terminals are running at or near maximum capacity.

Per Criterion Research, total US LNG feed gas flows surged to 19,982 MMcf/d on March 19, recovering sharply from a brief dip the prior day. The current weekly average of approximately 19,883 MMcf/d represents a step-up from last week’s 19,731 MMcf/d, and forward nominations suggest flows could climb toward 20,234 MMcf/d in the days ahead as commissioning activity progresses at multiple facilities.

The Math

Qatar’s 77 MTPA offline equates to roughly 10.2 Bcf/d removed from the global market. US terminals at ~20 Bcf/d cannot physically replace it. No combination of non-Qatari suppliers can.

Goldman Sachs estimated a one-month Hormuz halt could drive TTF toward 74 euros/MWh, the threshold that triggered demand destruction during the 2022 European energy crisis. We are now well past one month of disruption, with infrastructure damage escalating. European storage sits at ~29% full, down 20+ points YoY, with injection season starting in April. In Asia, Qatar supplied ~53% of India’s LNG imports, 72% of Bangladesh’s, and 99% of Pakistan’s.

Cheniere just kicked off the commissioning process for CCL Stage 3 Train 6, requesting FERC approval to introduce propane to the thermal oxidizer and hot oil furnace. Fuel gas and feedgas requests should follow in the coming weeks. Commercial ops expected by late May or early…

— Criterion Research (@PipelineFlows) March 18, 2026

Every incremental MTPA of new US capacity, whether from Golden Pass, Corpus Christi Stage 3, or Plaquemines, now carries outsized significance. The commissioning trajectory at these facilities is no longer a corporate milestone. It is a global supply security question. 

Unidentified drones were allegedly detected above the Washington Army base where Secretary of State Marco Rubio and Defense Secretary Pete Hegseth live, according to three insiders who leaked the information to the Washington Post. Officials were unable to determine where they originated, two of the leakers said. 

Multiple drones were allegedly spotted over Fort Lesley J. McNair on a single night over the last 10 days, prompting increased security measures and a White House discussion on how to respond, said senior admin official “who spoke on the condition of anonymity.”

The drones over Fort McNair prompted officials to weigh relocating Rubio and Hegseth, two of the people briefed said. The senior administration official said the secretaries haven’t moved. Their quarters on the base were publicly reported by multiple outlets in October.

Chief Pentagon spokesman Sean Parnell declined to discuss the drones. “The department cannot comment on the secretary’s movements for security reasons, and reporting on such movements is grossly irresponsible,” he said. -WaPo

And in leaks spanning both the Trump and Biden administrations, similar drone threats surfaced after Trump took out Iranian general Qasem Soleimani in 2020, according to the report. There were also unidentified drones spotted by Trump’s Secret Service detail during the 2024 presidential race (or they may have just been inebriated?) during a news conference in LA and a motorcade ride through rural western Pennsylvania, where a bunch of regular people own drones. 

The news comes after officials locked down facilities at MacDill AFB in Tampa, Florida – home to US Central Command, which is conducting US military operations in Iran – after a suspicious package resulted in the closure of the base’s visitors centers on Monday, while a second, unspecified security incident on Wednesday left the base under a shelter-in-place order for several hours. 

“To ensure the safety and security of our people and the mission, commanders adjust their installation’s security posture in accordance with local threat assessments,” a spokesperson said in a statement. 

The Post also reports that a leaked diplomatic cable from the State Department on Tuesday ordered all US diplomatic posts worldwide to “immediately” undertake security evaluations, citing “the ongoing and developing situation in the Middle East and the potential for spillover effects.” 

Fort McNair is home to the National Defense University as well as some of the Pentagon’s most senior military officials. While it has not traditionally housed political leaders, several Trump officials, including outgoing DHS Secretary Kristi Noem, have been calling area bases home. McNair is close to Capitol Hill and the White House. 

For those keeping track, that’s at least six leakers, leaking to the Post. That’s a lot of ‘trust us, bro.’

Also, and probably unrelated, remember all those weird ‘car-sized’ drones reported in Dec. 2024 that had zero explanation? Pepperidge Farm remembers.

* * * Top selling supplements (in stock)

Brain Rescue (on sale!)

Iodine Fortify (are you deficient?)

Resveratrol (potent antioxidant for healthy aging)

For the 16th month in a row, China bought gold into reserves in February even as bullion prices hovered near record highs.

The People’s Bank of China (PBOC) added another 30,000 troy ounces last month, lifting official reserves to approximately 2,309 metric tonnes (74.22 million ounces), valued at $388 billion.

This represents roughly 9-10% of China’s total foreign reserves.

At this pace, China is closing in on the top global holders (still behind US ~8,133t, Germany ~3,352t, but climbing fast).

Since November 2024, the PBOC has increased its gold holdings by a total of 1.4 million ounces.

Central banks are not alone, as CoinTelegraph’s Martin Young reports, retail gold purchases have tripled over the last six months, while Wall Street selling has accelerated over the past four months, according to data from the Bank for International Settlements (BIS).

“Retail-driven exuberance,” increasingly channeled through exchange-traded funds (ETFs), “set the stage for outsize moves,” continuing the precious metal rally from 2025, reported the BIS in a quarterly review released on Monday. 

Since Q2 2025, retail investors have bought around $70 billion in gold ETFs, and these purchases have more than tripled over the last six months, observed the Kobeissi Letter, citing BIS data on Thursday.

“Retail investors are all-in on precious metals,” it noted. 

Gold has surged 60% over the past year, and some crypto proponents have speculated it has come at the expense of Bitcoin, which some argue competes with gold as a store-of-value asset.

BIS data shows cumulative retail inflows effectively tripled from around $20 billion to roughly $60 billion over the six months from late Q3 2025 to the end of Q1 2026.

However, institutional selling started around mid-November and accelerated after the precious metals market began to correct in January, according to the data. 

Bitcoin is not the only asset susceptible to high volatility from overleveraged positions. 

Prices of precious metals such as gold and silver reversed abruptly in late January and February 2026, while the “daily rebalancing of leveraged ETFs and margin‑triggered liquidations amplified the swings,” particularly in silver, BIS reported.

Smaller speculative derivatives traders, or “non-reportables,” had built up heavily leveraged long positions in silver heading into the crash, it added. 

Gold prices are in ‘correction’ currently, down over 16% from its record highs in January.

The abrupt price drop and the spike in precious metal volatility “point to the role of retail flows, and amplification of price moves due to forced sales by leveraged ETFs, trend-following investors such as commodity trading advisers, and margin dynamics,” BIS stated. 

Authored by Kimberley Hayek via The Epoch Times,

The U.S. Senate on Tuesday once again rejected a motion to discharge S.J. Res. 118, a joint resolution to withdraw American armed forces from military actions in Iran sans Congressional approval. The motion was shot down in a 47–53 vote.

The measure, introduced by Sen. Cory Booker (D-N.J.), is an attempt to invoke the War Powers Resolution of 1973 to require explicit congressional approval for ongoing U.S. military involvement in the region.

The motion was rejected mostly along party lines, with Sen. Rand Paul (R-Ky.) providing the lone Republican supporter and Sen. John Fetterman (D-Pa.) voting with Republicans.

“If there’s anything that is plain in that Constitution, it is that a president does not have the power to unilaterally bring a nation and its treasure, to bring a nation and its men and women into conflict without a say of Congress,” Booker said on the Senate floor.

“This is not a partisan issue. This is not a left or right issue. It is a right or wrong, do you stand with the Constitution of the United States of America?”

The U.S.-led military campaign against Iran entered its third week on Wednesday as Iran engages in retaliatory strikes across the region, disrupting global energy flows and driving up oil prices. Iran launched missiles and drones late Wednesday night a toward Israel and several Persian Gulf countries, continuing a trend of targeting its neighbors.

The Israel Defense Forces, as well as defense measures in the United Arab Emirates, Qatar, and Saudi Arabia, have responded to Iran’s attacks. Israel conducted strikes in Tehran Tuesday, killing Ali Larijani, a top Iranian security official, as well as Gen. Gholam Reza Soleimani, head of the Islamic Revolutionary Guard Corps Basij force.

Meanwhile, Brent crude prices have skyrocketed above $100 per barrel as Middle East oil exports have been halted. Strikes against Iranian gas fields have contributed to the increase in oil prices. Two Canadian cargo ships are stranded in the Persian Gulf, unable to pass through the waterway.

U.S. intelligence says Iran’s regime remains in power, but it’s deteriorated.

Director of National Intelligence Tulsi Gabbard has said it would likely dedicate years to rebuild drone, missile, and other capabilities if it does not fall as a result of the conflict.

Update (1226ET): President Donald Trump and Japanese Prime Minister Sanae Takaichi announced a roughly $40 billion collaboration to build advanced small modular nuclear reactors (SMRs) in the United States. The project, involving U.S.-based GE Vernova Inc. and Japan-based Hitachi Ltd., targets sites in Tennessee and Alabama. Officials described it as a step to stabilize electricity prices, expand power generation, and bolster energy security amid global tensions, including the ongoing Iran conflict. The deal builds on last year’s U.S.-Japan trade framework and investment commitments, with no major new military pacts emerging from the talks.

The joint press conference following the extended Oval Office meeting – long enough to cancel the planned working lunch – was overshadowed by a viral moment. When asked about the lack of prior coordination with allies on strikes against Iran, Trump turned to Takaichi and quipped: “We went in very hard and we didn’t tell anyone about it. Who knows better about surprise than Japan? Why didn’t you tell me about Pearl Harbor?” The remark elicited a mix of nervous laughter, groans, and stunned silence in the room, quickly dominating social media reactions.

HILARIOUS: President Trump to Japanese PM Sanae Takaichi after being asked why he didn’t coordinate with allies prior to attacking Iran: “We went in very hard and we didn’t tell anyone about. Who knows better about surprise than Japan? Why didn’t you tell me about Pearl Harbor,… pic.twitter.com/cEZPrl24ek

— RedWave Press (@RedWavePress) March 19, 2026

*  *  * Grab our top selling knife!

Trump praised Takaichi repeatedly, calling her “a very popular, powerful woman” and “a great woman” after her recent landslide election win. He expressed particular delight when she spoke English directly, noting it was “so nice that we don’t have to sit through that [translation].” Takaichi reciprocated warmly, addressing him as “Donald” and stating, “I firmly believe it is only you, Donald, who can achieve peace across the world,” while condemning Iran’s nuclear program and actions in the Strait of Hormuz, though urging de-escalation.

On the security front, Japan held firm on constitutional limits, with Takaichi explaining what her country “can and cannot do” militarily—no warships were committed to Hormuz despite Trump’s earlier pushes for allied naval support. Broader discussions covered trade implementation, critical minerals, Indo-Pacific stability, defense cooperation, and countering China.

As noted below on the nuclear deal – GE Vernova and Hitachi, under their existing joint venture GE Vernova Hitachi Nuclear Energy (GVH), will construct BWRX-300 small modular reactors (SMRs) in Tennessee and Alabama, with the projects valued at up to $40 billion. Specific timelines for operation remain under wraps, but the deal highlights accelerating momentum for advanced nuclear technology.

This announcement follows the first tranche of commitments under the fund, which we covered in detail last month. Those initial projects totaled $36 billion and focused on a massive natural gas facility in Ohio, a synthetic diamond plant in Georgia, and a Gulf Coast crude export terminal.

The BWRX-300 units, each roughly 300 MW, are designed for faster factory-built deployment than traditional gigawatt-scale plants. Sites in Tennessee tie into the Tennessee Valley Authority’s Clinch River development, while Alabama locations will partner with private developers. No SMRs currently operate on US grids, but the Trump administration has prioritized regulatory streamlining and federal support to shorten timelines that have historically stretched a decade or more.

We previously covered the US-Japan trade deal and the surrounding agreements back in October of last year when investments worth over $500 billion were pledged by Japan. At the time, the announced value of investments for GE Vernova reactors was $100 billion, so this barely represents even half of that previously announced commitment. It remains unknown where the other $60 billion will be directed to.

There are also outstanding commitments from Japan to support NuScale with up to $25 billion, and Westinghouse with an additional $100 billion. The $100 billion for Westinghouse will most likely be in the form of funding the $80 billion agreement between the US, Cameco, and Brookfield for 10 AP1000s. 

*  *  *

President Donald Trump is expected to use today’s White House meeting with Japanese Prime Minister Sanae Takaichi at 11:15 ET to press Tokyo for naval support in the U.S.-Israeli campaign against Iran – specifically requesting minesweepers and escorts to reopen the Strait of Hormuz, tapping their oil reserves, developing missiles, and in non-Iran news, are expected to announce a $40 billion nuclear power project in the southern US. 

WATCH:

Despite publicly declaring that the United States “does not need the help of anyone,” Trump has repeatedly lashed out at allies for their lukewarm response and continues to urge partners to clear mines and escort tankers through the critical waterway. The request places Takaichi in an awkward position: Japan relies on the Gulf for 95% of its crude oil imports, yet any deployment of the Maritime Self-Defense Force would clash with the country’s pacifist constitution and deeply unpopular domestic sentiment toward the war.

“Japan gets 95 percent of its crude oil supplies from the Gulf,” US Treasury Secretary Scott Bessent told Fox Business on Thursday ahead of the meeting. “I would expect that they would want to ensure its supplies are safe.”

Japan’s Navy notably has some of the best minesweepers and mine detection capabilities in the world, according to Bessent, who said it puts Tokyo in a perfect position to assist – and that they should release their oil reserves to ease pressure on global oil markets.

“I think we’re going to have a very good discussion with the prime minister,” he said. “President Trump has an excellent relationship with her.”

Trump may also seek Japanese production or co-development of missiles to replenish U.S. stocks depleted by the Iran conflict and Ukraine war. Japan maintains ties with Tehran, potentially offering a diplomatic channel, though past mediation efforts failed, Reuters reports.

Unlike Washington, Tokyo has diplomatic relations with Tehran, creating a potential avenue for diplomacy in any moves to end the war, although past attempts ​by Japan to mediate with Tehran in 2019 were unsuccessful.

Takaichi will also tell Trump that Japan intends to join the “Golden Dome”, opens new tab missile defense initiative that ​is meant to detect, track ⁠and potentially counter incoming threats from orbit, two Japanese government sources said. –Reuters

Takaichi, Japan’s first female prime minister, has so far offered no concrete assistance. Speaking to parliament on Monday, she confirmed no official U.S. request had been received but said officials were “checking the scope of possible action within the limits of its constitution.” In public comments before departure, she described the trip as “very difficult” and stressed that her “top priority is the early de-escalation of the situation.”

The visit – Takaichi’s first to Washington since taking office – was originally designed to burnish the U.S.-Japan alliance, remind Trump of the China threat ahead of his now-postponed trip to Beijing, and announce a fresh wave of Japanese investment in the United States. Tokyo had already committed $550 billion in projects to win tariff relief; a second tranche of roughly $60-100 billion in critical minerals, energy, and other sectors was expected to be unveiled during the visit.

$40 Billion Reactor Project

Trump and Takaichi are also expected to unveil a major nuclear initiative at the White House today, channeling fresh capital from the US-Japan $550 billion investment fund created under their bilateral trade agreement.

Trump and Japanese PM Takaichi are set to announce a $40BN nuclear power project in the southern US, the latest initiative stemming from an investment fund the countries established as part of a trade pact.

— zerohedge (@zerohedge) March 19, 2026

GE Vernova and Hitachi, under their existing joint venture GE Vernova Hitachi Nuclear Energy (GVH), will construct BWRX-300 small modular reactors (SMRs) in Tennessee and Alabama, with the projects valued at up to $40 billion. Specific timelines for operation remain under wraps, but the deal highlights accelerating momentum for advanced nuclear technology.

This announcement follows the first tranche of commitments under the fund, which we covered in detail last month. Those initial projects totaled $36 billion and focused on a massive natural gas facility in Ohio, a synthetic diamond plant in Georgia, and a Gulf Coast crude export terminal.

The BWRX-300 units, each roughly 300 MW, are designed for faster factory-built deployment than traditional gigawatt-scale plants. Sites in Tennessee tie into the Tennessee Valley Authority’s Clinch River development, while Alabama locations will partner with private developers. No SMRs currently operate on US grids, but the Trump administration has prioritized regulatory streamlining and federal support to shorten timelines that have historically stretched a decade or more.

We previously covered the US-Japan trade deal and the surrounding agreements back in October of last year when investments worth over $500 billion were pledged by Japan. At the time, the announced value of investments for GE Vernova reactors was $100 billion, so this barely represents even half of that previously announced commitment. It remains unknown where the other $60 billion will be directed to.

There are also outstanding commitments from Japan to support NuScale with up to $25 billion, and Westinghouse with an additional $100 billion. The $100 billion for Westinghouse will most likely be in the form of funding the $80 billion agreement between the US, Cameco, and Brookfield for 10 AP1000s. 

Exact unit counts, financing splits, and commercial operation dates were not detailed ahead of the formal announcement. Additional energy, minerals, or defense deals could surface during the visit.

So – Iran, Oil, and Nuclear power are on the agenda, officially or not.

If the unstated intention of the Iran war was to give far more leverage to Russia, and – paradoxically – to Iran, by legitimizing their sanctioned oil exports in a world suddenly starved of energy, then mission accomplished.

Just days after the US “temporarily” lifted sanctions on Russian oil stored on sanctioned tankers, Secretary Scott Bessent said Thursday that the Trump administration may suspend sanctions on Iranian oil already at sea in a bid to clamp down on energy prices.

“In the coming days we may unsanction Iranian oil that’s on the water, about 140 million barrels,” he said on Fox Business, adding that “In essence, we will be using the Iranian barrels against the Iranians to keep the price down for the next 10 or 14 days, as we continue this campaign.”

U.S. Treasury Secretary Scott Bessent:

In the coming days, we may unsanction the Iranian oil that’s on the water. pic.twitter.com/7OJN7t1ZtT

— Clash Report (@clashreport) March 19, 2026

It’s the latest play weighed by the administration to stabilize the oil market against price shocks since the U.S. and Israel launched their joint operation in February. The maneuver could free up 140 million barrels of Iranian oil for global use, Bessent said.

It’s one of several “levers” Bessent said the administration has at its disposal, as Iranian attacks cripple the Strait of Hormuz, whose blockade has shuttered roughly 20% of the world’s oil supply. The administration could also make more oil from the Strategic Petroleum Reserve available, Bessent added. The administration already started making 172 million barrels from the SPR available.

“So we have lots of levers, we’ve got plenty more that we can do,” Bessent said. “Some countries are going to do more, the U.S. could unilaterally do another SPR release to keep the price down.” 

The White House has discussed adding up to 100 million more barrels to the administration’s pledge last week, Politico reported citing a person familiar with the plan. 

“Some military advisers are concerned [about] draining so much, and are pushing for more like 50 million barrels on the concern that further destruction of oil and gas infrastructure in the [Middle East] region could leave the country vulnerable from a reserve standpoint,” this person said. 

A spokesperson for the Department of Energy — which controls the SPR — said in a statement following Bessent’s interview there were currently no plans for another release.

“The United States has taken several actions thus far to mitigate disruptions to energy markets,” DOE spokesperson Ben Dietderich said. “While the U.S. continues to consider all options to keep markets supplied, there are currently no plans for an additional SPR release.”

Bessent comments come a day after the US Administration announced a 60-day waiver of the Jones Act shipping law, temporarily allowing foreign-flagged vessels to move fuel, fertilizer and other goods between US ports

Which leaves unsanctioning Iranian oil as the most likely next step. 

The plan is being floated at a time when a massive, nearly $70 gap has opened in price between oil delivered to Asia via Oman, which is now trading at $167/barrell and WTI which serves the US market at $97. Meanwhile Brent, last trading at $113, is rising and is increasingly disconnected with WTI on fears the US may ban oil exports, undoing Barack Obama’s 2015 decision, and landlocking US production. 

What is remarkable about the Bessent proposal is that it comes just as Iranian oil exports surged on March 17 to over 4 million barrels after being heavily depressed for the past few days. If Iran can sustain this level of exports, it would be more than double the pre-war daily average of just over $2 million barrels!

Oil and product flows through the strait have plummeted from roughly 20 million barrels a day to just “a trickle,” the International Energy Agency reported last week, marking the largest supply disruption in history. U.S. gas prices are up by more than 85 cents per gallon from the start of the war. Bessent called the blockade a “temporary chokepoint” and implored American allies to help secure the strait.

“They’re the ones who need this oil,” he said. “The U.S., we’re an oil exporter.”

Yet while China is especially reliant on Gulf oil, having been traditionally the biggest customer, China also has a strategic petroleum reserve that it quietly filled up in recent years, and which currently has ~1.5 billion barrels, or more than the entire 1.2 billion reserve across IEA member nations. The question then becomes is Beijing willing to dip into its reserve while Asian prices remain elevated (or perhaps stoop so low as to purchase US oil), or is it waiting for a more strategic moment, like the invasion of Taiwan before starting the SPR drain. 

Alibaba ADRs suffered their sharpest drop in six months during the US cash session after quarterly results revealed a massive tumble in net income and sluggish top-line growth, overshadowing yet another quarter of triple-digit expansion across its cloud and AI businesses.

Third-quarter results showed that Alibaba’s core retail business remained sluggish, while its Cloud Intelligence Group posted 36% growth compared with the same period one year ago.

Revenue for the quarter rose by only 1.7% year-over-year to RMB 284.84 billion, missing the Bloomberg Consensus estimate of RMB 289.79 billion. Adjusted EPS, EBITDA, and net income all fell below analyst expectations, with adjusted net income plunging 67% year-over-year.

Here’s a snapshot of the earnings:

Revenue 284.84 billion yuan, +1.7% y/y, estimate 289.79 billion yuan (Bloomberg Consensus)

• Alibaba International Digital Commerce Group revenue 39.20 billion yuan, +3.8% y/y, estimate 41.67 billion yuan
• Cloud Intelligence Group revenue 43.28 billion yuan, +36% y/y, estimate 42.36 billion yuan
• China E-commerce Business Group revenue 159.35 billion yuan, +5.8% y/y, estimate 165.94 billion yuan

Adjusted earnings per American depositary receipts 7.09 yuan vs. 21.39 yuan y/y, estimate 12.34 yuan

Adjusted EBITDA 34.06 billion yuan, -45% y/y, estimate 39.62 billion yuan

Adjusted net income 16.71 billion yuan, -67% y/y, estimate 31.6 billion yuan

All Other revenue 67.34 billion yuan, -25% y/y, estimate 66.93 billion yuan

Alibaba’s dismal earnings report highlights the pressure to monetize its costly AI buildout. CEO Eddie Wu, on a call with analysts earlier, offered few details on execution, implying Alibaba would need to sustain 35% annual growth to reach that goal.

“The business goal of Alibaba’s AI strategy is very clear. Over the next five years, our goal is to surpass $100 billion in combined cloud and AI external revenue,” Wu told the analysts.

Bloomberg Intelligence analysts Robert Lea and Jasmine Lyu noted, “Alibaba’s push into agentic AI and creation of a “Token Hub” won’t alter the e-commerce giant’s AI profit outlook, which remains challenged. API (application programming interfaces) from companies including Tencent, MiniMax and Baidu is a loss-leading service despite recent price increases, reflecting high computational costs and low industry pricing. Rising cloud demand won’t offset pressure in Alibaba’s e-commerce and food-delivery businesses either, which remain the company’s primary earnings drivers.”

Alibaba is also pressing ahead with a full-stack AI strategy anchored by its proprietary T-Head chips, which management says have now entered scaled production. This signals a chip war with US tech firms and provides a tailwind for Alibaba’s hardware push, as both state-backed and private-sector customers seek to reduce reliance on foreign suppliers and boost domestically produced chips.

In the cash session in New York, BABA ADR fell 6.3%, the largest intraday decline since October 10, 2025, or about six months ago. Shares of BABA peaked in late fall last year and are down 14% year to date.

BABA’s big drop in net income is certainly overshadowing its AI progress.

Global stocks are in freefall after a fresh surge in oil and gas prices deepened concerns that the war in the Middle East will fuel inflation and hit growth. We saw clear escalation in Iran conflicts yesterday given the South Pars gas field strike and Qatar LNG facilities strike, both of which have effectively shut down all hope for a quick resumption of LNG flows from the Gulf. Bonds also tumbled amid a second day of major central bank meetings, and just to keep everyone on the same pace, gold and bitcoin also tumbled, despite some de-escalation effort (Trump said that Israel will not conduct further attacks on Iran’s main natural gas facility), but selloff pressure in global equities remains. Micron gave strong earnings and guidance yesterday after close (almost double the Street’s Q3 EPS guidance with companies noting strong AI demand), but the stock has been down 5% amid global risk-off moves overnight and high CapEx concerns. Only oil (and specifically Brent now that the market is pricing in a US oil export ban), LNG and various energy products are soaring, and threatening to send the world into a stagflationary spiral. As of 8:00 am ET, futures for the S&P 500 slipped 0.3% after the US benchmark wiped out gains for the week in the previous session. Nasdaq futures were down 0.5% while European equities were hit especially hard 2.1%, heading for the lowest level this year, as European energy prices exploded. A benchmark for Asian stocks dropped 2.8%.

In premarket trading, Mag 7 stocks are mostly lower (Alphabet -0.5%, Amazon -0.4%, Apple +0.3%, Nvidia -0.4%, Meta Platforms -0.2%, Microsoft +0.1%, Tesla -0.5%).

• Mining stocks underperform as copper gave up its gains for this year and gold declined for a seventh day. Newmont (NEM) falls 7% and Freeport-McMoRan (FCX) declines 4%.
• Accenture (ACN) falls 2% after the consulting company provided a third quarter revenue outlook that disappointed.
• Alibaba’s ADRs (BABA) fall 4% as earnings plunged while revenue barely grew, underscoring the urgency behind the Chinese e-commerce leader’s drive to wring more profits out of a swathe of costly AI endeavors.
• Canadian Solar (CSIQ) tumbles 19% after the company reported a wider than expected fourth-quarter loss and forecast first-quarter revenue that missed the average analyst estimate as global storage volumes declined.
• Dlocal (DLO) rises 7% after the emerging markets payment services provider’s fourth-quarter results beat expectations on key metrics. The company also announced buyback plans and gave an outlook that analysts are largely positive on.
• Five Below (FIVE) gains 7% after the retailer forecast net sales for the first quarter that beat the average analyst estimate. Analysts are positive about the company’s execution and note strong sales momentum.
• Micron Technology (MU) falls 6% after the chipmaker gave a forecast for capital spending that was higher than expected, the latest example of investors being wary of elevated spending.
• Rocket Lab (RKLB) inches 1% higher after the space company announced a $190 million hypersonic test flight contract.

In other corporate news, last week’s cyberattack against Stryker has delayed surgeries for some patients. Elliott Investment Management is said to have built a significant stake in Align Technology, the maker of Invisalign teeth-straightening products. And a study in The Lancet Psychiatry journal showed that Novo Nordisk’s Ozempic and Wegovy were linked to mental health benefits. In AI news, HSBC is said to be weighing deep job cuts, betting on AI to shrink its middle and back offices. And Tencent’s shares plunged after it failed to deliver a clearer vision of how it’ll profit off agentic AI, with investors disappointed by a lack of new targets or products.

Today’s latest selloff comes as Brent extended gains since the start of the conflict to nearly 60%, climbing above $114 a barrel after attacks on some of the Middle East’s most important energy facilities. The advance in West Texas Intermediate was more muted, rising 1.4% as the gap between US crude and the rest of the world widened on expectations that Trump may impose export controls which would landlock WTI and send it much lower as the US is energy self-sufficient. The same can not be said for Europe however, which faces hell. Oh, and to that point, European natural gas jumped as much as 35%.

Oil’s surge already has global central bankers fretting about price pressures. The Bank of Japan kept interest rates unchanged on Thursday, following a hold by the Federal Reserve the previous day, with both signaling the conflict had clouded the policy outlook. 

“The mood is clearly risk-off this morning, with markets still digesting a toxic mix of geopolitics and central bank messaging,” said Mathieu Racheter, head of equity strategy at Julius Baer. “The renewed escalation in the Middle East is reviving stagflation concerns just as investors were getting more comfortable on inflation up until March.”

Trump called for de-escalation after Iran unleashed waves of retaliatory strikes on energy facilities following Israeli fire on the South Pars gas field. The US wasn’t involved in that attack, Trump said, adding that any additional attacks by Iran on Qatar’s LNG facilities would prompt the US to “massively blow up the entirety” of the South Pars field.

For JPMorgan strategist Dubravko Lakos-Bujas, the market’s reaction to all this is too complacent. He notes that S&P 500 and oil correlations usually turn increasingly more negative after a 30% oil spike, and thinks not enough attention is being paid to the “bigger and more consequential question” of a negative impact on demand if the Strait of Hormuz does not reopen.

Meanwhile, the Fed’s message that that further interest-rate cuts are far from guaranteed finally fully sunk in for bond traders, who will be watching updates from other central banks including the Bank of England and the ECB in the next few hours. The Bank of Japan kept policy rates unchanged but added the Middle East to its list of risk factors without altering its inflation outlook, suggesting it still sees a potential path to raise rates in coming months.

European stocks were hit by a surge in natural gas prices amid attacks on Middle East energy infrastructure. Stoxx 600 is down 2% with all sectors ex-energy lower.Here are some of the biggest movers on Thursday: 

• Aker Solutions shares jump as much as 10%, the most in about a year, after the Norwegian energy industry services company announced its board is proposing an extraordinary cash dividend of NOK5.00 per share.
• Nemetschek shares rise as much as 4.3% after the software company set a sales target suggesting the strong growth seen last year is set to continue.
• Gulf Keystone shares gain as much as 5.8%, briefly hitting a 2022-high, after the oil and gas company delivered 2025 results ahead of expectations.
• Inwit shares slump as much as 26% to a record low after customers Swisscom and Telecom Italia announced a joint venture to develop their own tower infrastructure.
• Vonovia shares slide as much as 11% to the lowest level since 2023 after the residential real estate firm reported a portfolio valuation lower than analysts had expected and as German bond remain elevated.
• Accor shares fall as much as 9.8% to its lowest in nearly a year after Grizzly Research LLC says it is short the hotelier’s stock.
• J. Martins shares drop as much as 3.8% after a fourth-quarter earnings beat was overshadowed by the retailer’s warning that geopolitical uncertainty weighed on consumer sentiment in the opening months of 2026.
• D’Amico International Shipping shares slump as much as 18% to the lowest in five weeks, after its biggest single investor sold shares at a significant discount.

Asian stocks declined, snapping a three-day advance, as surging energy prices and warnings from policymakers about a weakening economic outlook damped risk appetite across the region. The MSCI Asia Pacific Index fell as much as 2.2% Thursday, the most since Mar. 9, as Iran and Israel traded strikes on key energy facilities in the Middle East. All major markets in the region were in the red, led by losses in Japan and South Korea.  Several miners, including Australian gold producers Northern Star and Evolution, as well as Japan’s Sumitomo Metal, were the top decliners on the regional benchmark. Meantime, Tencent shares fell after China’s most valuable company said it plans to curtail buybacks and failed to deliver a convincing strategy on profiting from agentic AI. AIA shares also edged lower after earnings that were broadly in line with analyst expectations and planning a $1.7 billion buyback.

In FX, the yen is firmer after BOJ’s Ueda kept the prospect of an April rate hike alive. Yen gains are capping potential upside for the dollar in a risk-averse environment. Swiss franc lags after an unchanged SNB rate decision, which saw the Bank talk up the prospect of intervention.

In rates, yields on government debt surged. Treasuries have extended Wednesday’s steep curve-flattening selloff, leaving front-end yields about 4bp higher. US 10-year yield, about 4bp higher on the day near 4.30%, at session high and the highest since August. 2s10s curve breached 46bp for first time since early August while 5s30s is back near 100bp after reaching flattest level since Jan. 27. Bigger losses grip UK bond market, where front-end yields have risen about 31bps, the biggest jump since 2022, on a much more hawkish than expected BOE decision. Continued erosion in outlook for Fed rate cuts has swaps pricing in just 11bp of easing by end of year, while expectations for hawkish shifts by Bank of England and ECB continue to mount ahead of Thursday’s decisions

Traders cemented bets on two rate hikes by the European Central Bank this year and are now leaning toward a similar move by the Bank of England. Swiss and Swedish policymakers left rates unchanged. The increase in gas prices has prompted an acceleration in rate hike bets ahead of today’s BOE and ECB policy announcements. Year-end bets look for 55bps of ECB hikes and 36bps from the BOE.

In commodities, Brent crude is up more than 6% as escalating attacks in the Persian Gulf threaten energy infrastructure. WTI is flat on expectations of a US export halt. Spot gold and silver are posting respective losses of 2.7% and 5.2%. Bitcoin is lower by 1.4%. 

US economic data slate includes weekly jobless claims and March Philadelphia Fed business outlook (8:30am), February Leading Index, January new home sales and wholesale trade sales (10am) and 4Q household change in net worth (12pm)

Market Snapshot

• S&P 500 mini -0.6%
• Nasdaq 100 mini -0.6%
• Russell 2000 mini -0.8%
• Stoxx Europe 600 -2.1%,
• DAX -2.4%,
• CAC 40 -1.8%
• 10-year Treasury yield +4 basis points at 4.30%
• VIX +0.6 points at 25.69
• Bloomberg Dollar Index little changed at 1213.01
• euro +0.2% at $1.1474
• WTI crude +1.8% at $98.07/barrel

Top Overnight News

• Escalating attacks on Persian Gulf oil-and-gas infrastructure are sending the U.S.-Israeli war with Iran into a dangerous new phase that threatens to worsen the crisis over global energy supplies. WSJ
• The Pentagon has asked the White House to approve a more than $200 billion request to Congress to fund the war in Iran, according to a senior administration official, in an enormous new ask that is almost certain to run into resistance from lawmakers opposed to the conflict. WaPo
• Trump said an angry Israel had “violently lashed out” and attacked Iran’s major gas field, a significant escalation in the U.S.-Israeli war, but said Israel would not make further such attacks unless Iran retaliated. RTRS
• Trump’s administration is considering deploying thousands of U.S. troops to reinforce its operation in the Middle East, as the U.S. military prepares for possible next steps in its campaign against Iran, said a U.S. official and three people familiar with the matter. RTRS
• Global benchmark Brent’s premium over US-focused WTI jumped to a 12-year high, highlighting how the Middle East conflict is hitting Asia and Europe harder than the US. BBG
• Top Senate Democrats Schumer, Warren and Wyden plan to urge President Trump to end tariffs, issue refunds and stop the Iran war, arguing his policies are raising costs, Semafor reported.
• China’s rate markets are signaling reduced prospects for monetary easing. Meanwhile, the PBOC vowed to maintain stable financial markets while implementing moderately loose monetary policy. BBG
• The BoJ kept policy settings steady Thursday against a backdrop of conflict in the Middle East and volatile energy markets but stuck to its stance of continuing to seek rate hikes. The central bank maintained its policy rate at 0.75%, extending a pause stretching back to its last hike in December. WSJ
• UK unemployment held steady in February as payrolls rose, signaling labor market stabilization. Payrolls increased 20,000 and the jobless rate was unchanged at 5.2%, both beating expectations. BBG
• The ECB and BOE are both set to hold rates steady today, but the real focus is any guidance on the economic impact of the Iran conflict and what it may mean for policy. BBG
• Sen. Thom Tillis said Wednesday that lawmakers are “very close” to an agreement to resolve a lobbying spat between banks and digital asset firms that could clear a path forward for landmark cryptocurrency legislation to advance in the Senate. Politico
• Global benchmark Brent’s premium over US-focused WTI jumped to a 12-year high, highlighting how the Middle East conflict is hitting Asia and Europe harder than the US, MLIV said. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks declined as the region took its cue from the losses stateside, where the major indices suffered amid higher oil prices and yields, following energy infrastructure attacks in the Middle East and hawkish Powell comments. ASX 200 was dragged lower by losses in miners, materials and real estate, with sentiment not helped by mixed jobs data. Nikkei 225 suffered from the higher oil prices and as markets awaited the BoJ policy decision, which provided no major surprises, while the attention now turns to more central bank announcements, as well as the Trump-Takaichi summit later. Hang Seng and Shanghai Comp conformed to the broad risk-off mood with tech hit by weakness in semiconductors and following Tencent’s earnings, while miners and airlines were also pressured after a decline in metal prices and surge in oil.

Top Asian News

• China’s Industry Minister said China is to focus on advanced basic materials, key strategic materials, and frontier new materials; called for exploring AI application in materials research, testing, and production.
• China’s government releases list of policies to strengthen, benefit and enrich the agricultural sector during this year. said policies cover subsidies for soybean, corn planting and producing, also covers cultivated land facility protection subsidies. Policies cover subsidies for inter-provincial employment and transportation subsidies.
• Japan’s Finance Minister Katayama said decided on energy subsidy as an emergency step, adds FX movements have been driven partly by speculators. Speculators can move easily due to the Bank of Japan and the summit. There has been some speculative trading in oil markets and authorities will do their utmost to respond to currency moves at any time. The ministry is prepared to take necessary actions against market volatility and is watching financial markets with an extremely high level of vigilance.

European Bourses are broadly lower as renewed attacks on energy infrastructure weigh on risk sentiment. The DAX 40 underperforms, pressured by Vonovia despite its return to profitability and plans to sell around EUR 5bln in assets to reduce debt. Sectors are weak across the board. Basic Resources lag as precious metals decline, while Travel & Leisure also underperforms. Energy is the relative outperformer, supported by elevated prices and policy support in Italy, benefiting names such as Eni.

Top European News

• UK Unemployment Rate (Jan) 5.2% vs. Exp. 5.3% (Prev. 5.2%, Low. 5.2%, High. 5.3%).
• UK Employment Change (Jan) 84K vs. Exp. -4K (Prev. 52K).
• UK Average Earnings excl. Bonus (3Mo/Yr) (Jan) 3.8% vs. Exp. 4.0% (Prev. 4.2%, Low. 4.0%, High. 4.3%).

FX

• DXY is flat but off lows, holding above 100 in a 99.99–100.31 range as higher oil prices and a hawkish Fed backdrop support the dollar. Powell signalled policy remains restrictive with no imminent cuts, reinforcing inflation concerns tied to the Middle East energy shock.
• JPY is firmer post-BoJ, driven by hawkish signals from Governor Ueda highlighting improving wage momentum. USD/JPY trades towards the lower end of a 159.04–159.87 range.
• EUR is flat, with USD recovery capping upside while elevated energy prices limit downside ahead of the ECB. Focus is on whether the ECB shifts to a more hawkish tone amid rising inflation risks, though growth concerns remain. EUR/USD trades in a 1.1443–1.1491 range.
• GBP trades subdued, sitting near the bottom of a 1.3245–1.3298 range as USD strength offsets limited domestic drivers. BoE expected to hold, with potential dovish dissent, though the energy shock may anchor a unanimous decision.
• CHF is weaker post-SNB after explicit FX intervention language signals readiness to counter excessive strength. Initial CHF weakness pares as this stance was largely expected, with EUR/CHF moving up towards 0.9100.
• SEK trades largely unchanged following the Riksbank decision, which keeps policy steady and maintains flexibility amid uncertainty from the Middle East-driven energy shock.
• Antipodeans are firmer, recovering recent losses. NZD/USD shrugs off weak GDP, while AUD/USD remains choppy after mixed labour data, with gains supported by broader USD stabilisation.

Central Banks

• BoJ kept its short-term rates at 0.75%, as unanimously forecast, with the decision made by 8-1 vote, as board member Takata voted for a 25bps hike. BoJ refrained from any major surprises, reiterating that it will continue to raise policy rates if the economy and prices move in line with its forecasts and will conduct monetary policy as appropriate from the perspective of sustainably and stably achieving the 2% inflation target. Furthermore, it stated the economy is likely to continue growing moderately and inflation expectations have risen moderately, while consumer inflation is likely to briefly slow below 2% and re-accelerate due to the impact of rising oil prices, with the price trend is to be in line with the goal in the second half of the outlook.
• SNB maintains its Policy rate at 0.00% as expected; prepared to intervene in currency markets to country currency appreciation if needed; “willingness to intervene in the foreign exchange market has increased”. The statement points to heightened uncertainty given the Middle East conflict. The main point of the statement was the FX language, commentary that sparked immediate pressure in the CHF as the SNB stated explicitly that it would counter rapid and excessive appreciation.
• Riksbank leaves its policy rate unchanged at 1.75% as expected; rate is expected to remain at this level for some time to come. The Riksbank has kept its optionality open in whether the Middle East shock will lead to tighter or looser or monetary policy. A point evidenced by the scenario analysis that explores the avenues that could lead to either option. Additionally, the forecast adjustment for 2026 underscores this with the CPIF view increased while the growth view has been cut. But, pertinently, the policy path projection is unchanged vs the last MPR.
• Norges Bank Q1 Regional Network Survey: Expect minor changes in output growth in the period to summer. Contacts expect annual wage growth of 4.2% in 2026 and 3.9% in 2027.
• Brazilian Interest Rate Decision 14.75% vs. Exp. 14.75% (Prev. 15%), decision was unanimous. BCB reaffirms serenity and caution. Future interest rate decisions will incorporate new information on Middle East conflict depth and duration. Committee deemed it appropriate to begin the monetary policy calibration cycle.
• Taiwan Central Bank leaves rates unchanged at 2.00%, as expected.

Fixed Income

• UST are bearish following the hawkish tone from Powell and continued strength in energy prices. Futures drop around 15 ticks post-Fed, holding near session lows around 111-08 as higher oil and gas prices reinforce inflation concerns and keep yields elevated.
• Bund futures are weaker, down 40 ticks at most with a trough near 125.70 as surging Dutch TTF gas and elevated crude push ECB pricing more hawkish. Focus turns to the ECB, which is expected to hold rates but likely revise inflation higher and growth lower.
• Gilts underperform, gapping lower by 92 ticks and extending to an 88.32 low amid the global fixed income sell-off driven by energy and central bank hawkishness. Attention turns to the BoE, where rates are expected unchanged, with focus on the vote split and policy guidance.
• France sold EUR 12.399 vs exp. EUR 10.5-12.5bln 2.40% 2029, 2.50% 2030, 2.70% 2031 and 3.50% 2033 OAT.
• Spain sold EUR 5.546 vs exp. EUR 5.0-6.0bln 2.60% 2031, 2.55% 2032 and 3.30% 2036 Bono.

Commodities

• Crude futures surge on escalation in the Iran war, with attacks on Gulf energy infrastructure across Saudi Arabia, Qatar, and Kuwait driving a sharp risk premium. Brent approaches USD 119.5/bbl at peak, with WTI lagging and trading at a wide ~USD 12/bbl discount, the largest spread since 2015. The disruption is amplified by threats to alternative routes such as Saudi Arabia’s Yanbu, a key Red Sea export hub used to bypass Hormuz, although prices pull back slightly after reports loadings resume.
• Spot gold extends losses, breaking below USD 4,700/oz as a firmer USD and rising rate expectations (driven by energy-led inflation risk) outweigh safe-haven demand despite ongoing conflict.
• Base metals remain under pressure in a risk-off environment. Copper erases 2026 gains as higher oil prices weigh on global growth expectations and demand, with prices trading in a USD 12,041–12,326/t range.
• Saudi Arabia’s Yanbu port reportedly resumes oil loadings, sources say. This comes following reports that oil loading were stopped.
• Gazprom said Ukraine increased attacks on Turkstream and Bluestream pipelines on 17-19th March; said all attacks were foiled.
• Abu Dhabi government noted operations have been suspended at the Habshan gas facility, while authorities are dealing with two incidents of falling debris from successfully intercepted missiles that targeted that gas facility.

Geopolitics

• Iran’s armed forces said Iran’s retaliation against attacks on its energy infrastructure is not yet complete, SNN reported.
• Iranian lawmaker said parliament is mulling passing a bill that would impose toll and tax on ships seeking safe passage in the Strait of Hormuz, ISNA reported.
• US embassy says Americans should leave Saudi Arabia immediately.
• US President Trump said Israel violently lashed out at Iran’s major facility and the US did not know about the attack, while he called for no more attacks by Israel on South Pars and threatens the US will retaliate if Qatar’s LNG is attacked again.
• US officials say President Trump wants no more energy strikes but supported the attack on South Pars, and could once again be open to targeting additional Iranian energy facilities depending on Iran’s actions in Strait of Hormuz, according to WSJ.
• US President Trump’s administration is considering deploying thousands of additional US troops to the Middle East as Trump weighs Iran next steps, according to sources cited by Reuters.
• US Pentagon seeks more than USD 200bln in budget requests for Iran war, according to Washington Post.
• Israeli official said war has moved into a new phase and may last several more weeks.
• Saudi Foreign Minister said Iran must review ‘misjudgements’, and attacks will bring no gains, demands Iran stop proxy support and protect maritime navigation immediately, adds Iran has dealt with neighbours not in a brotherhood but with a hostile view. Added that Saudi Arabia reserves the right to take military action against Iran.
• Saudi Arabia’s Defence Ministry said a drone has fallen on the Samref refinery, currently assessing the damage.
• Missile reportedly hit the Yanbu refinery in Saudi Arabia’s Red Sea coast, according to Iran’s semi official SNN.
• Kuwait Petroleum Corporation said one of the operational units at Mina Al-Ahmadi refinery was targeted on Thursday by a drone, resulting in limited fire, no casualties reported.
• QatarEnergy said natural gas and LNG facilities at were subjected to missile attacks causing fire and more severe damage.
• French President Macron said he spoke with the Emir of Qatar and President Trump following the strikes that hit gas production sites in Iran and Qatar. Said, “It is in the common interest to implement without delay a moratorium on strikes targeting civilian infrastructure, particularly energy and water infrastructure.”.
• Security sources say a drone attack targets Iraqi naval forces based near Umm Qasr Port, although no casualties or damage that were reported.
• Iraqi armed group Kataib Hezbollah announces suspension of attacks on the US embassy for five days, subject to conditions.
• The escalation on the Lebanon front may continue regardless of the Iran war, Al Arabiya reported citing an Israeli security source.
• Russia’s Kremlin said trilateral US-Russia-Ukraine negotiations are on pause, but investment talks are to continue

DB’s Jim Reid concludes the overnight wrap

Markets resumed their slide yesterday, with bonds and equities slumping amid an escalation in strikes against energy infrastructure across the Middle East, which led President Trump to call for a de-escalation of strikes against gas facilities overnight. Brent crude (+3.83%) reached its highest closing level since July 2022 at $107.38/bbl and has extended its advance to $111.78/bbl this morning. Together with a more watchful tone on inflation from Chair Powell after the Fed’s on hold decision last night, this sent investors pricing out the likelihood of rate cuts this year. And if that wasn’t enough, the US PPI surprised on the upside yesterday, so there was little respite anywhere on the inflation side. With the prospect of a stagflation shock back on the agenda, the S&P 500 (-1.36%) fell back to its lowest level since November, whilst the 10yr Treasury yield (+6.7bps) was back up to 4.27%.

The escalating tone out of the Middle East yesterday started after Tehran said airstrikes hit Iran’s South Pars natural gas field. That’s significant because it marked the first strike on their upstream facilities since the current war began. In turn, that led Iran to threaten retaliation, publishing a list of energy sites across the Gulf that they said were targets. And late in the US session we saw news that a missile strike against Qatar’s LNG export facilities resulted in “extensive damage”. We’ve since had some signs of the US seeking to contain the escalation. The Wall Street Journal reported that President Trump didn’t want any more strikes against Iran’s energy sites, and the President himself posted late last night that the US knew nothing of Israel’s attack against the South Pars gas field. President Trump added that “no more attacks will be made by Israel” against South Pars if Iran stops its own strikes, though he also threated to “blow up the entirety of the South Pars Gas Field” if Iran again attacked Qatar LNG.

Despite those comments, oil markets remain on edge in Asia this morning amid fears that energy infrastructure could be meaningfully damaged. Brent crude is up +4.10% to $111.78/bbl this morning after a slightly smaller gain through the European close yesterday. And with concern mounting about a more protracted conflict, the 6-month Brent future (+2.80%) moved up to a post-2023 high of $88.19/bbl yesterday. Interestingly, WTI crude has seen a more modest increase, trading at $96.92/bbl this morning. That’s less than a dollar above Tuesday’s close, leaving the Brent-WTI spread at its widest since WTI briefly traded in negative territory during the Covid pandemic in April 2020. This also comes as Trump administration officials are expected to meet oil sector executives today.

Against that backdrop, we had the Fed’s latest decision. As widely expected, the FOMC kept rates on hold at 3.50-3.75%, with Governor Miran the dissent in favour of a rate cut. The median SEP dot continued to pencil in one rate cut this year, though some of the more dovish members trimmed their expectations for rate cuts. Hawkish nuances were then more evident in Powell’s press conference. While the Chair unsurprisingly said that the uncertainty stemming from the events in the Middle East creates risks to both sides of the Fed’s dual mandate, it is the inflation outlook that drew more of his attention. Powell argued that the Fed needs to see “progress on inflation” to cut rates again later this year, noting that core goods disinflation was “really important” in this respect. Powell also removed a line on core services disinflation from his prepared remarks. All this left a sense of increased concern about the continued overshoot of the inflation target, though he did say that a “vast majority” of the FOMC did not anticipate rate hikes. In all, our US economists see Powell’s comments as suggesting that the case for rate cuts has weakened but remains stronger than the case for hikes. See their full reaction here.

Away from policy, Powell said that he plans to stay on the Fed board until the current DoJ investigation into him is “well and truly over”, also adding that he had not yet decided whether he would otherwise continue to serve his term as Governor which ends in January 2028. So while Powell’s term as Fed Chair is due to end in May, this leaves open the prospect of him remaining as chair pro-tempore beyond this if President Trump’s nominee Kevin Warsh isn’t confirmed by the Senate by then. Note that Senator Tom Tillis has said he won’t advance Warsh’s nomination until the investigation into Powell is resolved.

Powell’s press conference solidified the move higher in rates, which then further extended after the news of Iranian strikes damaging Qatar’s LNG plant. By the close, fed funds futures priced just 15bps of rate cuts by December (-10.9bps on the day), with the 2yr Treasury yield rising by +10.1bps to 3.78%, its highest since August last year. That’s despite policy rates being 75bps lower now than they were at the time. The sell-off was slightly more modest at the long-end, with 10yr yields up +6.7bps to 4.27%.

The backdrop of heightened geopolitical risks and higher rates weighed on risk assets, with the S&P 500 closing -1.36% lower. The decline was very broad-based with all 24 sector groups within the S&P 500 lower on the day as the index saw the most decliners (422) so far this year. Other asset classes also struggled, with gold (-3.74%) and bitcoin (-4.44%) slumping, while the dollar (+0.51%) advanced against all the G10 currencies as it benefited from safe haven flows.

The risk mood has remained cautious overnight. While US equity futures are little changed, Asian equities have continued the overnight losses on Wall Street. Across the region, the Nikkei (-3.25%) is the largest underperformer following the Bank of Japan’s on hold decision. In other markets, the S&P/ASX 200 (-1.62%), the Hang Seng (-1.66%), the KOSPI (-2.52%), the Shanghai Composite (-0.95%), and the CSI (-0.99%) are all also showing significant declines.

In terms of the details on the BoJ, the central bank maintained its overnight call rate at 0.75% in an 8-1 decision. Hajime Takata was the only dissenter, advocating for a 25bps hike for the second consecutive meeting due to rising inflation risks. The bank noted that while inflation is anticipated to temporarily slow below 2% in the short term due to a deceleration in rice price increases, the conflict in the Middle East is expected to exert “upward pressure, influenced by the recent increase in crude oil prices.” So a hawkish leaning take on the energy risks. Following the decision, 10yr JGB yield are up +4.6bps to 2.27%. The Japanese yen is a touch stronger against the dollar (+0.13%), though at 159.60 it remains within touching distance of its weakest level since mid-2024. We’ll be hearing from BoJ Governor Ueda at the post-meeting press conference shortly after we got to print. This may provide further policy guidance, with swaps currently pricing a 60% chance of a hike at the next BoJ meeting in April.

Turning back to yesterday’s moves, investors’ concerns about inflation weren’t helped by the US PPI print. That was for February, so doesn’t account for the impact of the recent energy spike, but it still came in above expectations. It showed monthly headline PPI at +0.7% (vs. +0.3% expected), which pushed the year-on-year reading up to +3.4% (vs. +3.0% expected). So that added to a pro-inflationary backdrop with the US 1yr inflation swap surging another +18.6bps yesterday to 3.32%, its highest level since September.

Looking forward, central banks will stay in the spotlight with both the ECB and Bank of England announcing their latest decisions today. For the ECB, it’s widely expected they’ll follow the Fed and the BoJ in keeping rates on hold. However, the Iran conflict has led to a big shift in pricing since the last meeting, with markets now pricing in an ECB rate hike by July and two hikes by the end of the year. So today the focus will be on how they communicate around that, and our European economists think they’ll acknowledge higher uncertainty and the upside risks to near-term inflation. They also think there’ll be a strong message that underlines the ECB’s commitment to price stability, and that they’re willing to act to avoid a repeat of the 2022-23 inflation shock. Indeed, they point out that saying this loudly and clearly might be the best way of ensuring inflation expectations stay well anchored. For more details, see their full preview here.

Shortly beforehand, we’ll also get the BoE decision, where they’re widely expected to keep rates on hold as well. As with the ECB, market pricing has seen a significant hawkish shift, having gone from pricing further cuts before the Iran strikes, to an 85% chance of a hike by December. For today, our UK economist thinks there’ll be a 7-2 vote, with the minority still preferring a 25bp rate cut. And looking forward, he expects them to message that there’s little need to adjust policy to a more restrictive stance right now. However, he also thinks they’ll signal that the assumed disinflation path to 2% looks less likely. See his full preview here for more.

Ahead of those decisions, European markets struggled yesterday, with the latest oil spike driving losses across the continent, particularly as investors priced in more rate hikes. So the STOXX 600 (-0.75%) and the DAX (-0.96%) saw their biggest decline in the last week. Moreover, sovereign bonds lost ground across the continent, with yields on 10yr bunds (+3.4bps), OATs (+4.0bps) and BTPs (+7.1bps) all moving back up again. Those moves came as the 1yr EUR inflation swap spiked by 32bps to 3.49%, its highest since April 2023.

Looking at the day ahead, and the main highlights will be the policy decisions from the ECB and the Bank of England. Otherwise, data releases include UK unemployment for January, the US weekly initial jobless claims, and US new home sales for January. Today also marks the start of a two-day EU leaders’ summit. Higher energy prices will be a big topic, though our economists expect that for now the policy response will be focused on country-level energy tax cuts 

Summary

• Trump dials up threat, seeking leverage, denies approving Israeli Pars strikes: however, reports from The Wall Street Journal and Axios say the White House was aware.

• Energy war hits breaking point: tit-for-tat strikes are now directly targeting Gulf energy infrastructure, with Qatar’s Ras Laffan damaged, KSA, Kuwait, Bahrain sites attacked; Saudi trust in Iran “completely shattered.”

• Europe pushes off-ramp, refuses entry into conflict: Macron urges direct talks  “reckless escalation,” while Friedrich Merz signals support for de-escalation—Brussels’ stance: “This is not our war.”

• Iran signals not done exacting revenge: IRGC warns retaliation “not yet finished,” vowing escalating strikes across region as Gulf states, Iraq, and shipping lanes absorb widening fallout.

• Strait of Hormuz a de facto war zone as prices rise at the pump with oil spiraling higher: Iran’s parliament is floating tolls on shipping – weaponizing control.

*  *  *

Trump Threatens To “Massively Blow Up” South Pars, Tries To Distance US & Israel Ops

In a late-night Truth Social post, President Trump has once again cranked the rhetoric to eleven, warning he’ll “massively blow up” Iran’s crown jewel gas field if Tehran dares hit Qatar’s LNG infrastructure again. Trump insisted the US “knew nothing” about Wednesday’s Israeli strike on the shared South Pars field, claiming neither did Qatar, while simultaneously declaring “no more attacks will be made by Israel” there – unless Iran escalates.

Then came the kicker: “In which instance the United States of America, with or without the help or consent of Israel, will massively blow up the entirety of the South Pars Gas Field at an amount of strength and power that Iran has never seen or witnessed before,” he wrote.

However, US media reports have been quick to say otherwise – that the US did actually know about it and greenlit the risky escalation. The Wall Street Journal reports the White House was aware – and also Axios’ Barak Ravid insists so too, and he’s seen as very close to the Israeli government.

Heavy Air War Ongoing Amid Potential Energy Point of No Return

Meanwhile, the Gulf is still being lit up by tit-for-tat major attacks on energy, as Western populations brace for severe impact at the gas pumps. Iran’s retaliation is already hitting energy nodes across the region after Israel’s Wednesday South Pars strike, pushing tensions with neighbors past a potential point of no return. Qatar quickly expelled Iranian military attaches after missiles caused “extensive damage” at Ras Laffan – its main LNG export hub, while Saudi officials say “the little trust that remained in Iran has been completely shattered.”

The air war is continuing against Iran, with retaliatory strikes still raining down on Israel, but reportedly at slower pace when compared to the opening days of the war. A strike in western Iran’s Dorud county reportedly killed at least a dozen civilians, Al Jazeera has reported.

Macron Urges Direct Talks: ‘Return to Reason’

At a moment Gulf shipping lanes are freezing up with tankers idling in the Gulf of Oman waiting for a greenlight through what’s been for most a no-go zone, Iranian lawmakers have proposed a plan to impose tolls and taxes on ships passing through the strategic Strait of Hormuz – which of course would not include passage of US and Israeli ships, or others deemed participants of Operation Epic Fury.

Europe is watching nervously from the sidelines, itching for some kind of presentable offramp, also after NATO allies this week snubbed joining Trump’s coalition to seek to militarily open the strait back up to global shipping. Germany’s Friedrich Merz welcomed signals that Trump might dial things back, saying “I am particularly grateful that the US president sent a signal last night that he prepared to bring the fighting to an end” – while France’s Emmanuel Macron warned of a “reckless escalation” as energy infrastructure becomes the primary battlefield, and so has called for direct talks between Washington and Tehran. Here’s what he said in part before an EU leaders’ summit in Brussels on Thursday:

“We will obviously defend a de-escalation, a return to stability in the Middle East,” Macron said, adding that he spoke to Qatari emir Tamim bin Hamad Al Thani and Donald Trump about the war on Wednesday night.

“I think that everyone should calm down and the fighting should stop at least for a few days to try to give negotiations a chance again,” the French leader added. “I hope that, in any case, everyone will return to reason.”

⚡️ The US military has released documentation of the destruction of Iranian naval ships pic.twitter.com/tWeyUWoPFb

— War Monitor (@WarMonitors) March 19, 2026

Brussels’ bottom line has consistently been over the last days: “This is not our war.”

Iran Signals No Signs Of Stopping Revenge Attacks

Tehran, however, is signaling the opposite of de-escalation, perhaps seeing Trump’s latest Truth Social post claiming no foreknowledge of the Israeli attack on Pars as a sign of weakness. A spokesman for the IRGC Khatam has newly warned retaliation is “not yet finished,” adding:

“We warn the enemy that you made a major mistake by attacking the energy infrastructure of … Iran… the next attacks on your energy infrastructure and that of your allies will not stop until their complete destruction.”

Kuwait: Iranian drones attacked one of the largest oil refineries, Al-Ahmadi Refinery.

⚡️#BREAKING Kuwait: Iranian drones attacked one of the largest oil refineries, Al-Ahmadi Refinery. pic.twitter.com/g6MTtLUpcR

— War Monitor (@WarMonitors) March 19, 2026

The last 24 hours saw unprecedented destruction on key Gulf energy sites, summarized in the following:

• Separately, UAE authorities said they were responding to incidents at the Habshan gas facilities and at the Bab oilfield caused by falling debris from intercepted missiles. The Abu Dhabi Media Office said the facilities were shut down and no injuries were reported.
• Saudi Arabia said it intercepted and destroyed four ballistic missiles launched towards Riyadh on Wednesday and an attempted drone attack on a gas facility in its east. On Thursday, Iran targeted the Saudi capital, Riyadh.
• Attacks on Kuwait and Bahrain were also reported.

Elsewhere, Iraq has shut its airspace, vessels are taking hits in the Gulf, with on Wednesday Trade Winds having reported: “A ship is on fire after being hit by an unknown projectile near the United Arab Emirates deepwater port of Khor Fakkan.”

The number of Americans filing for jobless benefits for the first time fell to just 205k last week (well below the 215k expected and down from 213k prior). This is back near the lowest reading for initial claims ever having gone nowhere for five years…

Continuing jobless claims also remain below the 1.9 million Maginot Line, showing no sign of increasing layoffs…

Finally, as a reminder, sentiment surveys suggest the labor market is bifurcated with ‘jobs hard to get’ but joblessness not surging…

That chart reinforces the ‘no hire, no fire’ economy remains the status quo – no worse, no better.