Bracing for the worst
The stock market has clearly shifted into a wait-and-see mode. After more than three months of trading in a fairly narrow range – 6,800–7,000 points for the S&P 500 – the market has finally broken lower, pushed down by military action in the Middle East, and is now heading towards the next support level around 6,500. All attempts to hold prices at higher levels have so far failed. On several occasions a wave of optimism swept through the market and a rebound looked likely, but each time a fresh round of negative news from the front lines cut it short, and the market resumed its slide.
Fortunately, a full-blown sell-off has yet to materialise. Losses across the major U.S. indexes over the past week were limited to around two percent for the Dow Jones Industrial Average (DJIA), which was dragged lower by corporate heavyweights including Nike (NKE), down more than 6% on the week, Home Depot (HD), which fell 5.18%, and Boeing (BA), which closed the week down more than 4%. The heaviest blow to America's oldest index was arguably dealt by Goldman Sachs (GS), the most heavily weighted component by share price among all 30 members. Goldman, like Boeing, shed more than 4% over the week.
That said, the Dow was clearly the weakest of the major U.S. indexes: losses for the broad-market S&P 500 (-1.26%) and the tech-heavy NASDAQ Composite (-1.60%) were considerably smaller.
By contrast, the ITS family of indexes demonstrated far greater resilience amid external turbulence. Their weekly declines were negligible: the ITS Shariah index (ITSS) slipped just 0.69%, while the ITS World index (ITSW) fell by just over 1%.
At the stock level, investors continue to focus most closely on artificial intelligence. Last week brought several negative signals suggesting that market participants are still in the process of reassessing valuations across the entire AI space.
One notably sharp reaction followed news that software company Adobe (ADBE) plans to replace its chief executive: long-serving CEO Shantanu Narayen will step down once a successor is named. This rekindled concerns about potential disruption in the AI sector and sent Adobe shares down 7.6%.
Meta Platforms (META) also disappointed, falling 3.8% after the social media giant said it was pushing back the release of its Avocado AI model to at least May.
Even so, neither of these stories is setting the tone for the broader market right now. Geopolitics and oil are the primary drivers of market direction. Most participants are watching Trump's statements closely and tracking the movement of warships in the Strait of Hormuz.
Market outlook for March 16
Despite the absence of positive news from the front lines, investors are pushing back against the negativity and trying to keep the market from sliding further.
This is clearly visible on Monday morning: despite oil climbing above $100 a barrel, global equity markets look reasonably stable. There is no across-the-board rally, but green shoots are emerging in Asia (Hong Kong), Europe (London) and, most importantly, in U.S. index futures, which were up as much as 0.5% by midday European time. Whether this modest positivity will hold through the close of the main session is anyone's guess.
Still, there is reason for cautious optimism. This week's calendar is packed with events that could potentially lift sentiment.
Nvidia's GTC conference kicks off today, Monday March 16, giving CEO Jensen Huang a platform to lay out the company's AI roadmap at a moment when the entire sector is watching for signals about data centre demand.
The week's main event, however, is the FOMC meeting, where U.S. Federal Reserve policymakers will weigh rate cuts for the second time this year. No change is expected, but the Fed's statement and Jerome Powell's press conference will be parsed closely for any shift in language around inflation, growth and the economic fallout from the war.
There is also plenty of interest at the corporate level. The Q4 2025 earnings season is drawing to a close, while a handful of companies are already reporting results for early 2026. First up is Micron Technology (MU), whose earnings drop on Wednesday after the close. Micron's results will be a key read on the health of the chip sector – the backbone of the AI industry – and expectations are high: the stock was one of the top 10 performers in the S&P 500 last week.
Beyond Micron, results worth watching include discount retailer Dollar Tree (DLTR), sportswear brand Lululemon (LULU) and logistics group FedEx (FDX).
In short, there is no shortage of catalysts this week. The main wildcard, as ever, is geopolitics. The economy investors can handle – it is the headlines from the front lines that are harder to price in.