Joining me now is NYSE market strategist Eric Criscuolo. Eric, big day. Why are we seeing so much green across the board?
Yeah, once again, it's all about the headlines we're seeing from Iran. So maybe a potential way for the for the hostilities to maybe deescalate a little bit, maybe an off ramp. That's what the market is looking for. They want to see that this conflict does not go any further than it has to go. So, you know, anything that stops this earlier rather than later is going to be taken as a positive for the market.
Also, when that post came out, we saw ice front crude oil retreat more than 7.5%. As of this afternoon, it was under $100 a barrel. We haven't seen that number for a few weeks. Why are the markets so reactive to oil?
Oil, so much of the world's economy flows from or through oil. It's not just what gets you around in your car, but it's also what plastics are made out of. So much of the economy, the input prices, get derived from oil. If the oil prices are going higher, That's just going to take everything else up higher as well. And we've already gone through so much inflation. There's a concern that another bout of inflation is just really going to be hard for the economy to handle globally.
What have we seen historically during geopolitical tensions? I understand a lot of my experts are saying we see short-term volatility and then the markets even out. Do you think that is going to be true for this conflict in the Middle East?
Yeah, generally speaking, markets tend to kind of look past geopolitical events, you know, whether they're wars, conflicts, etc. So we've seen that in the especially in the recent past, markets have reacted initially, sold off a little bit, and then but have been quick to recover. So that's kind of been how things have happened over the past, you know, five or 10 years, everyone's kind of thinking this will still happen again, I should say everyone, but that's still kind of the consensus thinking. But as we said, as this Iran conflict keeps going longer, that's causing a problem for people kind of questioning that line of thinking.
And the Fed met last week. There was, of course, no March rate cut as expected. How do you think the conflict in the Middle East is going to affect Fed policy moving forward? Do you think that we're going to see a rate cut or perhaps a rate hike in 2026?
Well, that's what spooked everybody, was how hawkish everything seemed coming out of that meeting. And so everything got repriced. All the interest rates got repriced. Everything moved higher, not only in the U.S., but also globally. All the other central banks that met, they also kind of came out hawkishly and said, we're not going to let inflation get ahead of us. And so all the interest rates just went up. We saw that happen last week, this week again. As if oil comes down, if prices come down, that's going to help with kind of the inflation scare. That's going to help push yields back down. And when yields come down from the heights that they were at, that generally helps equities move higher.
Tomorrow, we're going to be getting to change topics a little bit. A flash PMI data. What is that? Why does it matter? And what are you expecting?
So the PMIs are their surveys. Basically, they're sent out to business leaders across the globe. And they basically are sent out to manufacturing leaders, and service leaders, companies in those two areas. And they basically just ask questions like, from last month, are things better or worse? Are prices higher or lower? Is your outlook better or worse? And they just basically take all those yes and nos, or higher and lowers, and then they come out with nice, easy ways to just kind of measure, are things improving, or are things not improving? And those PMIs, they're looked at as almost leading indicators, because they're survey-based. They were just collected recently. So they usually tend to kind of show what business leaders are thinking right now, the ones that are actually purchasing the products, that are making the business decisions of what to expand it. So that's why they're one of the more widely read indicators that we have.
All right. Eric Coscuolo, market strategist for the New York Stock Exchange. Thank you so much for joining us on Taking Stock.
