A Not So Friendly FOMC Day – North American Session Market Wrap for March 18, 2026

Market Overview

The North American session on March 18 was dominated by the much-anticipated Federal Open Market Committee (FOMC) meeting, which left participants with mixed feelings. The Federal Reserve decided to maintain interest rates at 3.50% to 3.75% for the third consecutive meeting, disappointing market expectations for a more hawkish stance.

Energy Commodities Surge

Prior to the FOMC press conference, energy commodities experienced significant volatility, primarily due to escalating attacks on energy infrastructure in the Middle East. WTI Oil prices surged from $92 to $99, while Brent crude saw a notable increase, consistently trading above $105. This spike was exacerbated by geopolitical tensions, particularly President Trump's threats regarding the Strait of Hormuz, a critical shipping lane.

Crude oil prices initially eased before the FOMC meeting but rebounded sharply as Iran retaliated against attacks on its gas infrastructure, leading to a turbulent trading environment.

Federal Reserve's Stance

During the press conference, Fed Chair Jerome Powell highlighted ongoing inflationary pressures and supply shocks stemming from the post-COVID era. Although the initial tone was not overtly hawkish, the market reacted negatively to the lack of positive news, resulting in a significant bounce in the US dollar. This further pressured stocks and metals, leading to a challenging trading session.

Stock Market Performance

The stock market opened poorly and worsened as the day progressed, particularly following the FOMC press conference and rising crude prices. The Dow Jones Industrial Average fell below 47,000, with technical indicators suggesting a bearish outlook. Despite some individual stocks in the producer manufacturing, energy, and tech sectors performing well, the overall market sentiment remained negative.

Cross-Asset Performance

Energy commodities surged, while metals and cryptocurrencies faced declines. The performance of major currencies was influenced by the rate decisions from the Federal Reserve and the Bank of Canada, with both central banks maintaining a hawkish pause. The rise in oil prices also played a significant role in currency movements, particularly affecting European currencies and the Antipodeans.

Looking Ahead

Traders are advised to remain vigilant as economic data releases are expected to impact market sentiment. Key upcoming events include the Bank of Japan's rate decision and various central bank meetings, including those of the Swiss National Bank, Bank of England, and the European Central Bank. The geopolitical situation in the Middle East will also be crucial to monitor as it may influence inflation expectations and market dynamics.