{"id":48240,"date":"2026-03-11T01:39:34","date_gmt":"2026-03-11T01:39:34","guid":{"rendered":"https:\/\/diyhaven858.wasmer.app\/index.php\/spiking-oil-prices-basically-end-any-chance-of-a-market-melt-up-says-this-wall-street-veteran\/"},"modified":"2026-03-11T01:39:34","modified_gmt":"2026-03-11T01:39:34","slug":"spiking-oil-prices-basically-end-any-chance-of-a-market-melt-up-says-this-wall-street-veteran","status":"publish","type":"post","link":"https:\/\/diyhaven858.wasmer.app\/index.php\/spiking-oil-prices-basically-end-any-chance-of-a-market-melt-up-says-this-wall-street-veteran\/","title":{"rendered":"Spiking oil prices basically end any chance of a market \u2018melt-up,\u2019 says this Wall Street veteran"},"content":{"rendered":"
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<\/div>\n<\/div>Traders are grabbing oil at much higher prices – Ezra Acayan\/Getty Images <\/figcaption><\/figure>\n
Hopes the Middle East conflagration will be brief have been dashed as the U.S.-Israel war with Iran goes into a second week.<\/p>\n
Oil prices right now are by far the dominant determinant of market sentiment \u2014 and the prospect of energy supplies from the region being severely constrained has pushed crude to multi-year highs and whacked investors\u2019 risk appetite.<\/p>\n
This makes sense. Surging oil prices are a tax on consumers \u2014 via the gas pumps, for example. Meanwhile, through higher production and transport costs, they bolster inflationary pressures more generally.<\/p>\n
When inflation rises but growth is constrained the economy can be blighted by stagflation, and that\u2019s a possibility that is currently being addressed by even the usually more upbeat market observers, such as Ed Yardeni.<\/p>\n
In a bulletin sent out late Sunday, the founder and president of Yardeni Research noted the spike in oil futures was accompanied by rising Treasury yields, a higher dollar, and lower gold prices.<\/p>\n
This oil shock won\u2019t end until ships can sail freely through the Strait of Hormuz, according to Yardeni. \u201cUntil then, the financial markets are likely to become increasingly concerned about a 1970s-style stagflation scenario; back then, the period of stagflation included two recessions,\u201d he says.<\/p>\n
Yardeni notes that on the Polymarket prediction site the prospect of a U.S. recession in 2026 has jumped in recent days. From 22% at the start of last week it is now 34%. (Polymarket has a data partnershp with Dow Jones, the publisher of MarketWatch.)<\/p>\n
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<\/div>\n<\/div>– Source: Yardeni Research <\/figcaption><\/figure>\n
Already by last week Yardeni was predicting trouble ahead and a 10% to 15% correction in the S&P 500 because of the Middle East war.<\/p>\n
The latest surge in energy costs makes him even more wary. \u201cNow we can\u2019t rule out a bear market and even a recession. It all depends on how long the Strait will be closed, obviously,\u201d he says. A bear market is considered to be a 20% fall in stocks from the recent highs.<\/p>\n
The S&P 500 and Nasdaq 100 already look \u201cprecarious\u201d to Yardeni, as it seems likely they may soon fall below their 200-day moving average \u2014 a long-term trend gauge that usually acts as technical support.<\/p>\n
And in the stagflation scenario, hiding out in bonds may not work either. Yardeni notes that 10-year Treasury yields, which move inversely to prices, have been \u201cremarkably subdued\u201d and stuck between 4.00% and 4.25% over the past year.<\/p>\n<\/p><\/div>\n