LIVE: Market Coverage Apr. 2, 2026 Stocks fall, oil surges after Trumps says war with Iran not over

WTI Inverts Above Brent

West Texas Intermediate crude hit $112 per barrel, overtaking Brent's $109 in an unusual inversion that signals acute domestic supply concerns.

War Timeline Extended

Trump indicated the conflict will last at least 2-3 more weeks, pushing potential oil flow normalization into May and extending the supply bottleneck.

Oil-Stock Correlation

With oil up 50% over six weeks, equities remain under pressure as the market cannot stabilize until energy prices stop climbing.

CPI Nowcast Spikes

The Cleveland Fed's inflation nowcast jumped from 2.4% to 3.2% in one month, while BofA economists warn headline inflation could reach 4%.

Growth Forecasts Cut

GDP expectations have fallen from 4% reacceleration hopes to just above 2%, reflecting the economic drag of sustained high energy prices.

Fed Expectations Reset

Markets have shifted from pricing 2-3 rate cuts to zero, effectively tightening financial conditions as investors digest a 'higher for longer' regime.

Extended Wars Pressure Multiples

Historical data shows major conflicts drive the S&P 500 down 2% over 12 months, particularly when accompanied by a Fed bias toward hiking rates.

Earnings Estimates Rise

Analysts are unusually raising earnings forecasts, suggesting the market decline reflects sentiment and multiple compression rather than deteriorating fundamentals.

Valuation Reset

The S&P 500's multiple has contracted from 24x to 20x earnings, potentially indicating a structural repricing of geopolitical risk or anticipation of future downgrades.