The bottom line: Friday morning opens with oil back above $100 and practically no sign that the Strait of Hormuz will reopen anytime soon. Brent crude settled at $101.33 on Thursday, up 10.2% on the day — the biggest single-session percentage gain since March 2020. Hormuz shipping traffic is down more than 90%. Goldman Sachs estimates 15.4 million barrels per day have been removed from global supply. In response, Trump announced the suspension of the Jones Act to allow foreign-flagged tankers to move crude between U.S. ports, and the IEA has ordered its largest-ever emergency reserve release. Meanwhile, Adobe's CEO Shantanu Narayen is stepping down after 18 years despite beating Q1 earnings, the Fed is signaling looser capital rules for big banks, and private credit BDC assets are now trading at 78 cents on the dollar. If you only have 30 seconds: oil is running, the policy response is accelerating, but the market is still searching for a floor.
Previous Close (Thursday, March 12)
Thursday was a bloodbath outside of energy. The S&P 500 fell 1.52%, the Nasdaq shed 1.72%, and small caps took the hardest hit with the Russell 2000 plunging 2.15%. All three major indexes have now hit year-to-date lows. Energy was the only sector in the green, with XLE gaining 0.93% as Brent blew past $100 for the first time since 2022. Tesla dropped 3.14%, Apple lost 1.94%, and Nvidia fell 1.55% as the chip sector came under pressure from supply chain disruption fears tied to the broader conflict. The 10-year Treasury yield rose 6 basis points to 4.273%, reflecting inflation anxiety from surging crude prices. Gold pulled back 1.69% to $5,092 — a notable move given the geopolitical chaos, suggesting markets may believe the war is ultimately contained.
What Happened Overnight: Oil Tankers Hit, Hormuz at a Standstill, Jones Act Suspended
1. Two Oil Tankers Struck in Iraqi Waters
Overnight fighting escalated further as two oil tankers were struck by unknown projectiles in Iraqi territorial waters, the first maritime attacks to spill beyond the Strait of Hormuz itself. The strikes — which hit a Liberian-flagged crude carrier and a Maltese-registered products tanker — came roughly 45 nautical miles south of Basra, one of Iraq's primary crude export hubs. No crew casualties were reported, but both vessels sustained hull damage and are leaking fuel into the waterway. The Dow dropped more than 700 points in overnight futures as the news crossed wires.
This marks a dangerous escalation. Until now, maritime attacks had been concentrated in and around the Strait of Hormuz. The extension to Iraqi waters threatens to disrupt Iraqi crude exports — roughly 3.3 million barrels per day — and raises the specter of a wider regional shipping shutdown that extends well beyond the Hormuz chokepoint.
2. Hormuz Traffic Down 90%+, Goldman Estimates 15.4M bbl/day Removed
Shipping data from Thursday confirmed what markets feared: traffic through the Strait of Hormuz has collapsed by more than 90%. Goldman Sachs published a research note estimating that 15.4 million barrels per day have been effectively removed from global supply — the largest supply disruption in the history of oil markets. Brent crude settled at $101.33, up 10.17% on the day, while WTI surged to approximately $96.
The IEA responded by ordering its biggest-ever emergency oil reserve release, but analysts are deeply skeptical that reserves alone can bridge the gap. The U.S. component of the release could take four months to fully deliver, according to IEA logistics estimates. Meanwhile, Russia is raking in an estimated $150 million per day in extra oil revenue from the price surge — a geopolitical irony that has not gone unnoticed in Washington.
3. Trump Suspends the Jones Act
In a significant policy move, President Trump announced late Thursday that he is suspending the Jones Act — the 1920 maritime law that requires goods shipped between U.S. ports to be carried on American-built, American-crewed vessels. The suspension allows foreign-flagged tankers to transport crude oil and refined products between U.S. ports, a measure designed to improve domestic oil logistics and ease gasoline price pressure.
U.S. gas prices have already topped $3.50 per gallon and are climbing fast. The Jones Act waiver is expected to reduce transportation bottlenecks, particularly for moving crude from Gulf Coast refineries to East Coast markets. Previous Jones Act waivers have been granted during Hurricane Katrina, Hurricane Maria, and the Colonial Pipeline cyberattack. Industry groups have long argued the law increases domestic shipping costs by 3-5x compared to foreign-flagged alternatives.
After Hours: Adobe CEO Steps Down, Dollar General Beats But Guides Weak
Adobe: Narayen Exits After 18 Years Despite Strong Q1
Adobe shocked the market Thursday evening by announcing that CEO Shantanu Narayen will step down after 18 years leading the company. The departure comes despite Adobe posting a strong first quarter: adjusted EPS of $6.06 versus $5.87 expected, and revenue of $6.40 billion versus $6.28 billion expected. AI revenue tripled year-over-year.
Shares fell 7% in after-hours trading, extending Adobe's year-to-date decline to roughly 23%. The timing is notable: Narayen's departure comes as generative AI tools are eating into Adobe's core creative software business faster than expected. Adobe Stock, the company's stock photography platform, is declining at an accelerating pace as AI-generated imagery replaces licensed content. The SaaSpocalypse narrative — the idea that AI is fundamentally disrupting traditional software business models — gains another powerful data point with this leadership change.
Dollar General: Beats Q4 But Weak Guidance Weighs
Dollar General reported Q4 results that beat estimates — adjusted EPS came in above consensus and same-store sales showed improvement. However, the stock fell in after-hours trading as management issued below-consensus guidance for fiscal 2027, citing headwinds from rising transportation costs driven by oil prices and continued pressure on low-income consumer spending. The company is navigating a difficult environment: its core customer base is disproportionately affected by rising gasoline and food prices.
Other Earnings and Corporate Highlights
- Dick's Sporting Goods (DKS) beat Q4: adj. EPS $3.45 vs $2.87 est., revenue $6.23B vs $6.07B, but issued weak forward guidance.
- Ulta Beauty missed on earnings, with margins compressed by promotional activity and increased competition from Sephora and Amazon.
- Revolut received its full UK banking license, a milestone for the $75 billion fintech. The license allows Revolut to offer insured deposits and expand lending products across the UK.
- PayPay (SoftBank's Japanese payments arm) jumped 14% in its U.S. IPO debut, pricing above range amid strong demand for fintech exposure.
- Airbnb raised $2.5 billion in its debut investment-grade bond offering, the largest IG issuance from a travel-tech company.
Fed Watch: Bowman Signals Looser Capital Rules for Big Banks
Fed Governor Michelle Bowman said Thursday that the central bank will loosen capital requirements for the largest U.S. banks, a move that had been signaled but not confirmed until now. The revised rules are expected to reduce the increase in required capital from the original Basel III Endgame proposal, which had called for a 19% hike. The final version is likely to settle around a 9-10% increase — still significant but far more palatable to the banking lobby.
The timing matters. With private credit under pressure and traditional banking capacity needed to absorb potential credit losses from the oil crisis, easing capital constraints gives big banks more room to lend and absorb market shocks. Bank stocks could get a modest tailwind from the announcement, though the broader macro environment remains hostile.
Meanwhile, the Treasury temporarily lifted sanctions on Russian oil at sea — a pragmatic move to prevent stranded cargoes from worsening the global supply crunch. The decision is politically controversial but economically necessary given the Hormuz shutdown.
Private Credit Update: BDC Assets at 78 Cents, Blue Owl Defends $1.4B Sale
The private credit unwind continues to accelerate. Business development company (BDC) assets are now trading at 78 cents on the dollar, down from 85 cents as recently as January. The decline reflects growing skepticism about the valuations of privately originated loans, particularly to software companies caught in the AI disruption wave.
Blue Owl Capital defended its $1.4 billion loan portfolio sale on Thursday, telling investors the transaction was a routine rebalancing rather than a forced liquidation. But the 6% discount to par value on the sale raised eyebrows — portfolio sales at par or above had been the norm just six months ago. Morgan Stanley and Cliffwater continued to restrict fund redemptions, with Cliffwater's flagship fund still facing 14% redemption requests against a 5% quarterly cap.
Global bonds have now erased their year-to-date gains entirely, with the German 10-year yield hitting 2.96% — its highest level since 2023. The convergence of oil-driven inflation fears and private credit stress is creating a rare environment where both equities and fixed income are under simultaneous pressure.
Global Markets: Asia Mixed, Europe Opens Lower
Asia-Pacific (Closed)
| Index | Close | Change |
|---|---|---|
| Nikkei 225 | 54,120 | -0.61% |
| Topix | 3,621 | -0.77% |
| Hang Seng | 24,380 | +0.42% |
| CSI 300 | 4,705 | +0.38% |
| S&P/ASX 200 | 8,542 | -1.01% |
| Kospi | 5,562 | -0.38% |
Asian markets were mixed overnight. Japan's Nikkei 225 fell 0.61%, weighed down by export stocks as the yen strengthened on safe-haven flows. Foreign investors sold the most Japanese stocks since November, according to exchange data. Australia's ASX 200 dropped 1.01%, dragged lower by financials. China continued to outperform relatively — the Hang Seng gained 0.42% and the CSI 300 rose 0.38%, with some analysts continuing to call Chinese equities an "unlikely haven" given China's diversified energy supply and reduced direct Hormuz exposure.
Europe (Live)
European markets opened broadly lower. The Stoxx 600 is down approximately 0.6% in early trading. The German DAX fell 0.8%, dragged by auto stocks — BMW flagged that tariff-related costs could reduce automotive EBIT margins by 1.25 percentage points this year. The French CAC 40 slipped 0.5%. Energy stocks are the clear outperformers again, with TotalEnergies and Shell both up over 2%.
The bipartisan ROAD Act housing bill passed the U.S. Senate 89-10 late Thursday, which could provide a modest boost to European construction materials stocks with U.S. exposure if signed into law.
U.S. Pre-Market: Futures Point to Weak Open
U.S. stock futures are trading modestly lower Friday morning. S&P 500 futures are off 0.4%, Nasdaq futures down 0.5%, and Dow futures off 0.3%. The selling pressure has eased somewhat compared to Thursday's rout, as the Jones Act suspension and IEA reserve release are being digested as positive marginal signals — even if insufficient to fully offset the supply crisis.
The 10-year Treasury yield is holding at 4.28%. The dollar is near a two-month high. Energy names are mixed in premarket, with some profit-taking after Thursday's surge. Tech continues to trade heavy, with AI and chip stocks under pressure from supply disruption concerns and the SaaSpocalypse narrative gaining steam after Adobe's CEO departure.
Premarket Movers
| Stock | Premarket Move | Catalyst |
|---|---|---|
| Adobe (ADBE) | -7% | CEO Narayen stepping down after 18 years; strong Q1 overshadowed |
| Dollar General (DG) | -4% | Q4 beat but weak FY2027 guidance citing oil-driven transportation costs |
| PayPay | +14% | Strong U.S. IPO debut; SoftBank-backed Japanese payments platform |
| Chevron (CVX) | +2.5% | Oil at $101; continued tailwind from Hormuz shutdown |
| Exxon Mobil (XOM) | +2.1% | Oil at $101; beneficiary of elevated crude prices |
| Tesla (TSLA) | -1.2% | Continuation of Thursday's 3.14% decline; sentiment weak |
| Blue Owl (OWL) | -2.8% | Private credit stress; $1.4B loan sale at 6% discount to par |
Policy and Politics: Government Shutdown Bites, Section 301 Probes Expand
The partial government shutdown is taking a visible toll. The TSA has lost 305 employees who have left the agency as paychecks have stopped arriving. Airport security lines are lengthening across major hubs. While air travel has not been formally disrupted, the workforce attrition is creating vulnerability — and Friday of a shutdown week historically sees accelerated departures as workers seek paying employment elsewhere.
On trade, the new Section 301 probes into 16 countries — including the EU, China, Mexico, and India — are expected to dominate diplomatic discussions this week. The investigations provide a new legal pathway for tariffs after the Supreme Court struck down the administration's use of the International Emergency Economic Powers Act for trade actions. No retaliatory statements from targeted nations have been issued yet, but the EU Trade Commissioner is expected to respond at a press conference later today.
What to Watch Today
- Oil trajectory above $100: Brent above $101 is uncharted territory for this cycle. Watch whether profit-taking creates a pullback toward $95-98 or whether the Iraqi waters escalation pushes crude toward $105. The IEA reserve release timeline — which could take four months for full delivery — means supply-side relief is distant.
- Adobe reaction after CEO departure: The after-hours move was -7%, but the full market session will determine whether the selloff deepens or if the strong Q1 results (AI revenue tripled) attract dip buyers. Watch for analyst downgrades and commentary on the CEO succession plan.
- Private credit contagion: BDC assets at 78 cents signal growing stress. Watch for additional fund managers restricting redemptions or marking down portfolios. If the stress moves from BDCs to larger PE-backed credit funds, the selling pressure on financials intensifies materially.
- Jones Act impact on gasoline prices: The suspension takes effect immediately, but the logistics of rerouting tanker traffic will take days to weeks. Watch wholesale gasoline futures for early signals of relief. The political narrative around gas prices is becoming a central issue.
- Fed speakers and rate expectations: With the 10-year at 4.28% and oil-driven inflation building, any Fed commentary on rate path will be parsed closely. Seven major central bank decisions land next week (Fed, BOE, BOJ among them). Today sets the stage.
- End-of-week positioning: Friday sessions during volatile weeks tend to see either aggressive de-risking or short-covering rallies. The S&P 500's biggest three-day decline in a month means there is substantial short interest to squeeze if any positive catalyst materializes. Conversely, weekend risk — the possibility of further escalation while markets are closed — could accelerate selling into the close.
The AlphaEdge Take: What to Expect Today
Friday arrives with the market caught between two forces: an escalating supply crisis that shows no sign of resolution, and an accelerating policy response that is meaningful but insufficient. The Jones Act suspension, the IEA reserve release, and the temporary Russian oil sanctions lift are all significant moves — they demonstrate that policymakers understand the severity of the situation. But none of them address the core problem: the Strait of Hormuz remains effectively closed, and the conflict is now spreading to Iraqi waters.
Scenario 1: Stabilization and modest losses. Oil pulls back from $101 toward $97-99 on profit-taking and the cumulative effect of policy announcements. The S&P 500 opens 0.3-0.5% lower but stabilizes as investors digest the week. Energy stocks consolidate after Thursday's run. Adobe finds support after the initial after-hours selloff. This is the "ugly but manageable" outcome — possible if no new geopolitical shocks hit during the session.
Scenario 2: Continued deterioration. Oil pushes toward $105 as the Iraqi waters escalation triggers fear of a wider shipping shutdown. Private credit headlines intensify. Adobe drags the software sector lower. The S&P 500 drops 1.0-1.5%, extending its weekly decline to nearly 4%. Weekend risk premium builds into the close, with traders unwilling to hold positions through two days of potential escalation. This is the higher-probability scenario given the trajectory of recent sessions.
Scenario 3: A geopolitical surprise reverses sentiment. Any credible ceasefire signal, U.S. Navy escort announcement, or diplomatic breakthrough could reverse oil prices violently — we saw a 30% oil crash on March 9 from a single Trump comment. In this scenario, the market rallies hard and short-covering amplifies the move. But nothing in the current diplomatic landscape suggests this is imminent. Mojtaba Khamenei's hardline rhetoric from Thursday and the expanding geography of attacks point in the opposite direction.
Our base case leans toward Scenario 2 — a difficult end to a brutal week. The S&P 500's pullback from its January highs remains surprisingly modest at roughly 4-5% given the magnitude of the oil disruption. That gap between price action and fundamental stress continues to close, and Friday could be another step in that process.
For longer-term investors: Energy remains the clearest winner. Chevron and Exxon are generating extraordinary free cash flow at $96+ WTI. On the defensive side, the Fed's capital rule easing is modestly positive for big bank stocks, though the private credit overhang limits the upside. If you have been waiting to add high-quality names at a discount, the current correction is creating opportunities — but patience is warranted given the unresolved geopolitical situation. The market has not yet found its floor.
For active traders: It is a Friday at the end of a volatile week, which means positioning will be choppy and unpredictable. The overnight futures session has already priced in the worst of the tanker attack news. If oil pulls back from $101 in early trading, watch for a reflexive equity bounce — but be prepared for the selling to resume if new headline risks emerge. Energy longs remain the highest-conviction trade in this environment, but position sizes should be smaller than usual given the risk of a weekend geopolitical surprise in either direction. Protect capital heading into the weekend.
We will publish an end-of-day wrap once the session closes. Stay sharp — the war's fifth trading week is ending with more questions than answers.
This article is for informational purposes only and does not constitute financial advice. AlphaEdge does not provide personalized investment recommendations. Always conduct your own research and consult with a licensed financial advisor before making investment decisions. Market data as of pre-market, March 13, 2026. Sources include CNBC, MarketWatch, Bloomberg, Reuters, Seeking Alpha, Morning Brew, Axios, Finimize, The Daily Upside, and Exec Sum.