Closing Bell: Stocks Pull Back as Geopolitical Uncertainty Keeps Traders on Edge

Key Points

• Equity markets softened as uncertainty around the next phase of the Iran conflict intensified, pressuring large‑cap growth while small caps held up better.
• March PMI data point to weakening momentum, led by services, even as inflation pressures re‑accelerate due to higher energy costs and renewed supply‑chain stress.
• Liquidity strains and credit deterioration are emerging in private credit, highlighted by Apollo’s redemption gating and a Moody’s downgrade of FS KKR Capital to junk status.

Markets continued to drift lower as uncertainty surrounding the next phase of the Iran conflict intensified. The S&P 500 (SPX) fell 0.37% and the Nasdaq‑100 (NDX) declined 0.77%, while the Russell 2000 (RUT) bucked the broader trend, closing higher by 0.45%. Energy, Materials, and Utilities led the session, while Communication Services, Real Estate, and Information Technology lagged.

Flash PMI Flags Slowing Growth and Rising Stagflation Risk

The March 2026 S&P Global Flash U.S. PMI signals a slowing—but still expanding—economy, with the composite index falling to an 11‑month low as services activity weakened while manufacturing showed modest improvement. Inflation pressures are re‑accelerating, driven by higher energy costs and renewed supply‑chain disruptions, even as employment softened for the first time in over a year. Together, slower growth, rising prices, and cooling labor conditions point to increasing stagflation risk and a more complicated policy backdrop for the Fed.

Private Credit Faces Rising Pressure from Redemptions and Downgrades

Stress is beginning to surface across the private credit and BDC space, as liquidity pressures and credit deterioration converge. Apollo’s $25 billion Debt Solutions fund recently capped redemptions at 5% after withdrawal requests reached roughly 11%, highlighting a growing mismatch between illiquid loan assets and investor demand for cash. Meanwhile, Moody’s downgrade of FS KKR Capital to junk status underscores rising credit stress, pointing to increasing default risk, valuation pressure, and the potential for broader gating if outflows persist.

Market Events for Tomorrow (ET)

8:30am:

• Current Account
• Import Prices

10:30am:

• Crude Oil Inventories
• FOMC Member Miran Speaks

Notable Earnings for Tomorrow

• A.M: BZUN, CHWY, CTAS, CGNT, KC, PDD, PAYX, WGO
• P.M: BYND, FUL, JEF, MLKN, WS

This material is intended for informational purposes only and should not be considered a personalized recommendation or investment advice. Investors should review investment strategies for their own particular situations before making any decisions.

Schwab Network is brought to you by Charles Schwab Media Productions Company (“CSMPC”). CSMPC is a subsidiary of The Charles Schwab Corporation and is not a financial advisor, registered investment advisor, broker-dealer, or futures commission merchant.

Charles Schwab Media Productions Company and all third parties mentioned are separate and unaffiliated, and are not responsible for one another's policies, services or opinions.

Data contained herein is obtained from what are considered reliable sources. However, its accuracy, completeness, or reliability cannot be guaranteed. All events and times listed are subject to change without notice.