March 13, 2026
Theme Signal
The tape is still being driven by oil, rates, and Iran-war uncertainty, but beneath the surface the market is starting to separate resilient secular themes like AI infrastructure and software from balance-sheet and private-credit stress.
Investment Digest
U.S. equities finished sharply lower on Thursday, with stocks ending near session lows as another leg higher in crude and Treasury yields overwhelmed support from software and select AI names.
| Index | Return |
| Dow | -1.56% |
| S&P 500 | -1.52% |
| Nasdaq | -1.78% |
| Russell 2000 | -2.12% |
The macro pressure point remained the same: higher oil, higher yields, fewer expected Fed cuts. WTI settled up 9.7% to $96.42, Brent moved back above $100, and the market pushed year-end easing expectations down to roughly 17 bp, versus 53 bp at the start of March. Treasury yields backed up again, led by the front end, with the 2-year up 10 bp to 3.73% and the 10-year up 4 bp to 4.26%. The dollar also strengthened, up 0.5% on the day.
The key narrative driver was continued skepticism around any near-term Iran off-ramp. New supreme leader Mojtaba Khamenei said the Strait of Hormuz should remain closed, while President Trump signaled that destroying the Iranian regime mattered more than energy prices. The market also processed the reality that even announced mitigation measures — a coordinated reserve release and a Jones Act waiver — are unlikely to solve the near-term shipping problem. The message from the tape is that the market believes inflation pressure is immediate, while policy relief is still hypothetical.
On the data front, Thursday’s releases were mixed but not market-moving enough to offset the geopolitical shock. Initial claims held at 213K, continuing claims eased slightly, housing starts surprised to the upside at +7.2% m/m, and the trade deficit narrowed more than expected to -$54.5B. But the market’s focus has already shifted to the bigger Friday macro bundle: durable goods, January PCE, second-read Q4 GDP, JOLTS, and preliminary Michigan sentiment/inflation expectations.
This morning, S&P futures are up 0.1%, off overnight lows. Crude is modestly lower but still elevated, the dollar remains firm, and the market is still trading as though de-escalation would matter a lot, but no one has enough confidence to front-run it aggressively.
Thematic Tail of the Tape
For thematic investors, Thursday reinforced that the market is no longer treating every risk asset the same way. Instead, it is splitting the universe into three buckets.
The first bucket is energy scarcity and supply security. This is still the dominant macro theme. Fertilizer, chemicals, and selective North American energy names outperformed because the market increasingly sees them as relative beneficiaries of Middle East dislocation. Thursday’s winners included CF, Nutrien, Dow, and Occidental, which fits the broader thesis that commodity-linked and regionally insulated supply chains can outperform when shipping routes and global feedstock pricing are under pressure.
The second bucket is AI infrastructure and software durability. Despite the weak market, Oracle’s earnings were taken well, largely because management paired stronger AI and advanced-compute demand with a message of funding discipline. That mattered. Investors are still willing to reward AI exposure when it comes with better visibility and less balance-sheet anxiety. At the same time, the broader software complex remains in a fragile but improving phase. There is still concern about agentic AI disruption, but the market is increasingly differentiating between speculative application-layer risk and mission-critical enterprise platforms.
The third bucket is private-credit and financial-structure stress, which is becoming a real overhang on parts of the market. Morgan Stanley’s move to limit redemptions at a private-income fund added to earlier restrictions from Cliffwater and tighter lending terms from JPMorgan. This matters thematically because it hits private equity, software-linked credit, and balance-sheet-sensitive growth. In other words, even where the secular story is intact, the funding backdrop is getting harder.
The upshot is that thematic leadership is no longer simply “AI vs. energy.” The more useful framework now is:
- Energy / hard-asset scarcity winners
- AI infrastructure names with credible demand visibility
- Balance-sheet-sensitive growth and private-credit-linked losers
That distinction should keep mattering until either oil clearly breaks lower or the market gains confidence that the private-credit issues are contained.
Thematic ETF Performance — Leaders (1D)
| ETF | Strategy | 1D | 1W | 1M |
| HYDR | Alt Energy | +0.52% | +4.41% | +7.81% |
| GNR | Natural Resources | +0.04% | -2.51% | +1.84% |
| NANR | Natural Resources | +0.00% | +1.15% | +2.86% |
| EMLP | MLP | +0.00% | -0.37% | +3.54% |
| TPYP | MLP | -0.13% | -0.56% | +5.03% |
Thematic ETF Performance — Laggards (1D)
| ETF | Strategy | 1D | 1W | 1M |
| FLYU | Travel | -9.46% | -3.63% | -22.83% |
| LABU | Biotechnology | -6.11% | +0.72% | -3.54% |
| ARKG | Biotechnology | -5.29% | -4.52% | -6.03% |
| KRBN | Climate/Carbon | -4.46% | -6.11% | -7.48% |
| YOLO | Cannabis | -4.42% | -1.00% | -0.70% |
ETF Fund Flows — Largest Inflows (1M)
| ETF | Strategy | 1M Flows | 1M Return | 1D |
| VTI | Total Market | $4.67B | -2.41% | -1.60% |
| VTV | Value | $2.92B | -4.72% | -1.20% |
| IGV | Software | $2.58B | +3.02% | -0.87% |
| SCHD | Dividend Equity | $1.65B | -2.02% | -0.58% |
| EEM | Emerging Markets | $1.48B | -6.42% | -3.20% |
ETF Fund Flows — Largest Outflows (1M)
| ETF | Strategy | 1M Flows | 1M Return | 1D |
| SPY | S&P 500 | -$14.90B | -2.23% | -1.52% |
| IWM | Small Caps | -$2.42B | -4.67% | -2.15% |
| QQQ | Nasdaq 100 | -$2.02B | -1.55% | -1.72% |
| SLV | Silver | -$1.81B | +1.76% | -1.84% |
| FDN | Internet | -$1.04B | +1.95% | -1.83% |
ETF Fund Flows — Largest Inflows (YTD)
| ETF | Strategy | YTD Flows | 1M Return | 1D |
| VTI | Total Market | $11.97B | -2.41% | -1.60% |
| AGG | Core Bonds | $4.26B | -1.06% | -0.37% |
| EEM | Emerging Markets | $4.14B | -6.42% | -3.20% |
| SMH | Semiconductors | $3.59B | -4.43% | -3.22% |
| SCHD | Dividend Equity | $3.28B | -2.02% | -0.58% |
ETF Fund Flows — Largest Outflows (YTD)
| ETF | Strategy | YTD Flows | 1M Return | 1D |
| SPY | S&P 500 | -$31.11B | -2.23% | -1.52% |
| QQQ | Nasdaq 100 | -$10.87B | -1.55% | -1.72% |
| IWM | Small Caps | -$4.81B | -4.67% | -2.15% |
| SLV | Silver | -$2.08B | +1.76% | -1.84% |
| FDN | Internet | -$1.06B | +1.95% | -1.83% |
