Retirement Refined Weekly Retirement Report
Oil – Inflation – Economic Growth
Last week was another challenging week for both the stock and bond markets. Tanker traffic in the Strait of Hormuz remained effectively halted, forcing producers in the Persian Gulf to shut or reduce oil production pushing the price of oil higher.
With approximately 20% of the world’s oil market in turmoil and no current end in sight, the markets responded.
| Week ending 3/13/26 | Y-T-D | From Recent High | |
| Dow Jones | (1.77%) | (2.92%) | (7.80%) |
| S&P 500 | (1.28%) | (2.80%) | (5.28%) |
| Nasdaq | (1.13%) | (4.26%) | (7.96%) |
| Russell 2000 | (1.75%) | (.03%) | (9.32%) |
| Foreign Stocks | (1.66%) | .65% | (9.10%) |
| Emerging Markets | (.52%) | 4.22% | (9.32%) |
Bond yields rose for the week with the 10-Year U.S. Treasury finishing the week yielding 4.28%.
Investors want to know how soon oil can begin to flow again through the Strait of Hormuz and at what level production will return. Oil prices eventually influence the cost of many products and services, placing upward pressure on inflation and downward pressure on economic growth.
Because oil is currently driving much of the market discussion, it may be helpful to understand how oil prices actually rise and fall.
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How Oil Prices Actually Move
Oil is one of the most heavily traded commodities in the world. Millions of barrels are bought and sold every day through global markets.
Two benchmark prices dominate the market:
• Brent Crude – the primary international benchmark
• West Texas Intermediate (WTI) – the primary U.S. benchmark
When you hear that oil is trading at a certain price per barrel, it is usually referring to one of these benchmarks.
However, that number is not set by governments or oil companies. Instead, the price is determined through global trading markets, particularly through what are known as futures contracts.
A futures contract is simply an agreement to buy or sell oil at a specific price at a future date.
For example:
• Airlines may buy oil futures to lock in fuel prices months ahead.
• Oil producers may sell futures contracts to guarantee prices for future
production.
• Investors and traders may buy or sell contracts based on expectations
about where prices may go.
Every second, buyers place bids and sellers place offers. The balance between those bids and offers determines the market price.
This process is called price discovery.
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Supply and Demand Still Drive the Market
At its core, oil prices follow the same basic rule that governs almost every market.
If supply exceeds demand, prices fall.
If demand exceeds supply, prices rise.
Demand tends to increase when:
• the global economy grows
• travel increases
• manufacturing expands
Supply increases when:
• new oil fields come online
• production technologies improve
• oil-producing countries increase output
When supply and demand move out of balance, prices adjust quickly.
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Why the Current Conflict Matters
The conflict involving the United States, Israel, and Iran has created concerns about disruptions to oil supply.
A major reason is the Strait of Hormuz, a narrow shipping route between Iran and the Arabian Peninsula.
Roughly one-fifth of the world’s oil shipments pass through this corridor.
When shipping through the Strait slows or stops, global oil supply can be affected almost immediately. Even the possibility of disruption can cause oil prices to rise because markets anticipate future shortages. Markets do not wait for shortages to occur.
They react to the risk of shortages.
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Why Oil Prices Matter to Investors
Even investors who never buy energy stocks are affected by oil prices.
Energy costs influence:
• transportation costs
• manufacturing costs
• airline profitability
• food prices
• inflation
Because oil is embedded in so many parts of the economy, it often acts as a barometer for economic activity and inflation pressure.
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GDP Revised Downward
Last week we heard the second revision of fourth-quarter 2025 GDP, which was reduced from 1.4% to 0.7%. Inflation readings reported did little to reverse current sentiment.
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Will Markets Bounce Higher?
Markets historically bounce higher after percentage pullbacks in the indexes. With the major indexes all down over 5% from their highs earlier this year, investors are beginning to ask when buyers may return to the market.
Will it be at the current level, down 10%, or more?
If favorable news arrives sooner rather than later, a bounce higher may happen. If not, we should expect additional pressure for the time being.
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Investor Takeaway
Oil shocks and geopolitical events often create short-term volatility in both stock and bond markets. History shows these events can move markets quickly, but their long-term impact on diversified portfolios is usually temporary. Investors are often best served by focusing on fundamentals rather than reacting to headlines.
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The Week Ahead
Major news this week includes the Producer Price Index (PPI), which highlights costs to businesses, and the Federal Reserve interest-rate decision and commentary, both scheduled for Wednesday.
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Thank you for reading!
Paul Levin, CFP®, ChFC®, RICP®, TPCP®
Managing Principal
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
All market data sourced from The Wall Street Journal, March 13, 2026.
