Key Points

• SP500 trades at 6690.15, up +6.53 (+0.10%), but price remains below MA10 6783.72, MA20 6832.41, and MA30 6856.65.
• Traders are no longer fully pricing even one Fed rate cut this year, versus two rate cuts at the end of February.
• Brent surged more than 10% at one point to $101.59 per barrel, while the dollar has gained over 2% against six major rivals since the war began.

The S&P 500 is trying to stabilise, but the macro backdrop has turned more hostile. Markets are now adjusting to the prospect of a longer Middle East war, oil prices staying near the $100 per barrel area, and a more stubborn inflation outlook.

That mix has pushed traders toward a stagflation framework, where growth slows while price pressure stays high. Reuters reported that Wall Street fell sharply on Thursday as crude surged and traders reassessed the path for rates and growth.

That is a difficult setting for equities. Higher oil acts like a tax on consumers and businesses. It squeezes margins, weakens confidence, and pushes bond yields higher at the same time. If the shock lasts, traders may continue trimming exposure to broad equity indices rather than rushing back into dip-buying.

If oil holds near $100 and yields stay firm, the S&P 500 may struggle to build a lasting rebound and could remain vulnerable to rallies that fade.

Rate-Cut Hopes Have Reversed Fast

The biggest shift sits in rates. Traders are no longer fully pricing even one rate cut from the Federal Reserve this year, compared with pricing two rate cuts at the end of February. That is a major reset in a short period.

Fed funds futures have pushed easing expectations further out, with traders increasingly questioning whether the Fed can cut while energy-driven inflation risk remains elevated.

The pressure is not limited to the US. For the European Central Bank, money markets have fully priced a rate hike by July and a 70% chance of a second increase by December, compared with a roughly 40% chance to a rate cut before year-end in February.

Euro area Bund yields have risen to their highest level in almost 2-1/2 years, while the US two-year Treasury yield hit a six-month high.

For equities, this matters because it changes valuation support. If traders stop expecting cuts, the market loses one of its main cushions.

If central banks keep sounding wary on inflation next week, the S&P 500 may remain under pressure, especially in rate-sensitive sectors.

The Oil Shock Still Drives the Tape

Oil remains the central driver. Brent rose more than 10% at one point to $101.59 per barrel, and Reuters reported it was later up 7.9% at $99.21 in Asia trade even after the IEA agreed to release a record 400 million barrels from strategic stockpiles. The market response stayed muted because traders still doubt policy measures can fully offset the supply disruption.

Oil volatility also remains extreme. Reuters reported the Cboe oil volatility index, OVX, surged to 121.01, its highest level since the early stage of the COVID shock in 2020. That tells you traders still see wide daily ranges and poor visibility.

Even the better news has only softened the damage, not removed it. The US issued a 30-day waiver for countries to buy sanctioned Russian oil and petroleum products stranded at sea, but the reaction stayed limited because the broader bottleneck in Middle East energy flows has not been solved.

If oil volatility stays elevated and Hormuz traffic remains impaired, equities may keep trading with a heavy tone and higher downside sensitivity to headlines.

Dollar Strength Adds Another Headwind

The only clear safe haven through this stretch has been the US dollar. The dollar index has gained over 2% against six major rivals since the war began, according to Reuters. That matters for US equities because a stronger dollar can tighten financial conditions and pressure multinational earnings.

A firmer dollar also reflects global stress. Traders are buying dollars because they want liquidity and protection from the inflation shock. That tends to happen when risk appetite weakens across both bonds and stocks.

If the dollar keeps climbing, it may add another layer of pressure to the S&P 500, especially for globally exposed sectors such as tech and industrials.

Technical Analysis

The S&P 500 is trading near 6,690, edging up 0.10% on the session as the index attempts to stabilise after the recent decline from the 7,017 peak. The broader structure suggests the market has shifted from its earlier upward momentum into a short-term corrective phase, with price now testing lower support levels.

Technically, the index remains below several key short-term moving averages. The 5-day moving average (6,745) and 10-day (6,783) are positioned above the current price and trending lower, indicating continued pressure on the upside.

The 20-day moving average (6,832) and 30-day (6,856) also sit above the market, reinforcing the near-term bearish bias as the index trades beneath this cluster of resistance.

Immediate support is located around 6,650–6,670, an area that recently attracted buyers after the sharp drop. A break below this zone could expose further downside toward 6,550–6,600, where previous demand emerged earlier in the trend.

On the upside, initial resistance now sits around 6,740–6,780, followed by stronger resistance near 6,830, where the 20-day moving average is currently positioned.

Overall, the S&P 500 appears to be undergoing a short-term consolidation after failing to hold above 7,000. Unless the index can reclaim the 6,780–6,830 region, the near-term outlook may remain cautious, with the market vulnerable to additional downside pressure before a clearer directional move emerges.

What Traders Should Watch Next

Next week’s run of central bank meetings matters because policymakers now need to address inflation, rates, and slower growth at the same time. These meetings are a prime market focus, as the interest-rate outlook has been reshaped by the war and energy shock.

In the very near term, traders should watch three things: whether oil can stay below the recent panic highs, whether yields keep rising, and whether the S&P 500 can recover the first resistance band near 6745.50 and 6783.72. If those do not improve together, this bounce may stay shallow.

Learn more about trading Indices on VT Markets today.

FAQs

1. Why Are Stagflation Risks Being Discussed in Markets Again?
   Stagflation refers to a mix of slow economic growth and high inflation. Markets are raising this risk because oil prices surged above $100 per barrel, which can raise energy costs while also weakening global growth.
2. How Do High Oil Prices Affect Stock Markets?
   Higher oil prices increase production and transport costs for companies while also reducing consumer spending power. This combination can squeeze corporate profits and weigh on equity markets such as the S&P 500.
3. Why Are Investors Pulling Back Rate-Cut Expectations?
   Rising energy prices increase inflation risks, making central banks more cautious about cutting interest rates. Markets are now no longer fully pricing even one Fed rate cut this year, compared with two rate cuts priced at the end of February.
4. Why Are ECB Rate Expectations Moving Higher?
   Money markets now fully price a European Central Bank rate hike by July and a 70% probability of a second hike by December. In February, traders had attached roughly a 40% chance to a rate cut before year-end, showing how sharply expectations have shifted.
5. How Does a Stronger Dollar Affect the S&P 500?
   A stronger dollar can weigh on US equities because it tightens financial conditions and reduces overseas earnings for multinational companies when profits are converted back into dollars.
6. Did the Strategic Oil Reserve Release Calm Markets?
   The International Energy Agency agreed to release 400 million barrels from strategic reserves. While this helped stabilise prices slightly, markets remain cautious because supply disruptions linked to the Middle East conflict have not fully resolved.

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Key Points

• The US dollar index (USDX) trades around 99.136, up +0.144 (+0.15%), hovering near its strongest levels this year.
• Brent crude surged above $100 per barrel, intensifying inflation concerns and lifting expectations for tighter central bank policy.
• Markets are pushing back rate-cut expectations as oil-driven inflation risks grow, with traders increasingly pricing delayed easing from major central banks.

The US dollar extended its gains as oil prices surged, pushing the currency toward its strongest levels of the year. Traders have been moving back into the dollar as the global energy shock raises concerns about inflation and forces markets to rethink how quickly central banks can ease policy.

Rising oil prices increase energy costs across economies, which feeds into consumer prices and complicates the inflation outlook. This has strengthened the dollar as traders reduce bets on interest rate cuts and look for safety in the world’s reserve currency.

The move has been broad across the currency market. The euro, yen, sterling and commodity-linked currencies all weakened against the dollar as energy volatility weighed on global risk sentiment.

If oil prices remain elevated, the dollar may continue to find support as markets adjust to the possibility that central banks keep policy tighter for longer.

Energy Dependence Shapes Currency Moves

Currency moves have largely reflected each economy’s dependence on imported energy. Countries that rely heavily on foreign oil and gas face worsening trade balances when energy prices surge.

This dynamic has pressured European and Asian currencies. Europe in particular faces greater exposure to energy shocks because of its dependence on imported oil and gas, which has weighed on the euro despite rising expectations that the European Central Bank may tighten policy.

The Japanese yen also weakened toward the 159 per dollar level, approaching its weakest levels in nearly a year. Japan imports the vast majority of its energy needs, meaning higher oil prices quickly translate into economic pressure.

Commodity currencies have also felt the strain. The Australian and New Zealand dollars both slipped as traders reassessed global growth risks and rising inflation.

If energy prices remain volatile and supply disruptions persist, currencies tied to energy imports may continue to face pressure relative to the dollar.

Rate Expectations Shift Across Central Banks

The surge in oil prices has begun to ripple through interest-rate markets. Traders are increasingly questioning whether central banks can cut rates as quickly as previously expected if inflation pressures rise again.

Swaps markets now show expectations that some central banks could tighten sooner or delay easing cycles. The European Central Bank is increasingly expected to move earlier than anticipated, while the Reserve Bank of Australia may face renewed pressure to raise rates.

In the United States, traders have also scaled back expectations for rate cuts. Fed funds futures show markets pushing potential easing further into the year as inflation risks from energy prices rise.

If inflation expectations continue climbing alongside energy prices, central banks may adopt a more cautious policy stance, which would likely support the dollar and maintain volatility in global currency markets.

USDX Technical Outlook

The US Dollar Index (USDX) is trading near 99.14, up around 0.15%, as the dollar continues to hold its recent gains following the rebound from the 95.34 low earlier this year.

The index has been trending gradually higher over the past few weeks, reflecting renewed demand for the dollar amid heightened global uncertainty and shifting macro expectations.

From a technical standpoint, the index is currently trading above its key short-term moving averages. The 5-day moving average (98.83) and 10-day (98.70) are both trending upward and sitting just below the current price level, while the 20-day (98.07) and 30-day (97.76) remain further beneath the market.

This alignment indicates strengthening bullish momentum in the near term as the dollar attempts to extend its recovery.

Immediate resistance is located near 99.30–99.50, where recent rallies have stalled. A sustained break above this region could bring the index back toward the 100.00 psychological level, followed by the 100.32 area, which previously capped the broader advance.

On the downside, initial support is seen around 98.70–98.80, with stronger structural support near 98.00, where the 20-day moving average is currently positioned.

Overall, the short-term bias for the dollar remains moderately bullish, with the index consolidating near recent highs. A move above 99.50 would likely strengthen upward momentum toward the 100 handle, while failure to hold above the 98.70–98.80 support zone could trigger a deeper consolidation.

What Traders Should Watch Next

• Oil price volatility and any renewed disruptions to shipping through the Strait of Hormuz.
• Central bank messaging as inflation expectations rise alongside energy costs.
• Currency reactions in energy-importing economies, particularly the euro and yen.
• Whether USDX retests resistance near 100.321 as safe-haven demand strengthens.

Learn more about trading Indices on VT Markets today.

FAQs

1. Why is the US Dollar Strengthening Right Now?
   The US dollar is gaining support as oil prices surge and raise inflation concerns. Higher energy costs can delay interest rate cuts, which tends to strengthen the dollar because traders seek higher-yielding and safer assets.
2. What is the US Dollar Index (USDX)?
   The US Dollar Index (USDX) measures the strength of the dollar against a basket of six major currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.
3. Why Do Rising Oil Prices Support the Dollar?
   Higher oil prices increase inflation risks and push central banks to maintain tighter monetary policy. Since the United States is a net energy exporter, rising oil prices often benefit the dollar relative to currencies of energy-importing economies.
4. How Does the Strait of Hormuz Affect Currency Markets?
   The Strait of Hormuz is one of the world’s most important energy shipping routes. Disruptions there can push oil prices higher, increase inflation expectations and shift global capital flows toward safe-haven currencies like the dollar.
5. Why Are Interest Rate Expectations Changing?
   Surging energy prices increase inflation risks, making central banks more cautious about cutting interest rates. Markets are now pushing potential easing further into the year as policymakers monitor inflation pressures.

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Key Pointers of CLARITY Act Status

• Status: Passed House (July 17, 2025); Stalled in Senate (March 2026).
• Primary Impact: Reclassifies “Digital Commodities” under CFTC jurisdiction, separating them from SEC “Investment Contracts.”
• Key Bottleneck: Senate disagreements over stablecoin rewards and anti-money laundering (AML) provisions.
• Market Sentiment: Highly sensitive for altcoins (SOL, ADA, BNB) than the broader crypto market.
• Impact on Crypto CFDs: With US spot regulation delayed, traders might increasingly turn to crypto CFDs to trade volatility without the legal complexity of direct asset ownership.

The CLARITY Act (2025) is a US federal bill designed to reclassify digital commodities under CFTC jurisdiction and provide a regulatory framework for crypto exchanges. The House passed the CLARITY ACT on July 17, 2025, but it remains stalled in the Senate as of March 2026.

A supportive bill, but not a simple one

The CLARITY Act appears supportive for crypto because it proposes clearer rules for digital assets, exchanges, brokers, and token issuers. However, it remains a proposal, and the final Senate version could differ significantly from the House bill.

Back in July, GENIUS has already created a legal lane for stablecoins.

GENIUS focused on stablecoins, while CLARITY aims to organise the broader crypto market structure, including token trading, exchange registration, and disclosures.

One of the bill’s more important ideas is the term ‘mature blockchain system‘ that distinguishesbetween networks that still look heavily controlled by a central group and networks that operate more independently.

That matters because not all crypto projects and blockchain technology are at the same stage of development. CLARITY tries to reflect that reality, rather than treating every token and blockchain network the same way.

For years, the US digital-asset market has operated with blurred definitions, overlapping oversight, and repeated disputes over which regulator should govern which part of the ecosystem. CLARITY is designed to reduce that confusion by drawing firmer lines around digital assets and the firms that handle them.

That is precisely why the bill has attracted so much attention. Clearer rules would, in principle, make the market easier to navigate for compliant exchanges, institutional participants, and token issuers that want a more workable path into the US market. In other words, the supportive case is easy to see.

What CLARITY is trying to achieve

At its core, CLARITY is trying to move the US crypto market from a grey-zone system to a more rules-based one. In practical terms, the bill would:

• create clearer categories for digital commodities
• expand registration paths for exchanges, brokers, and dealers
• introduce provisional status while rules are still being finalised
• apply more tailored disclosure expectations to qualifying token activities

The bill’s immediate relevance is strongest in spot-market structure and token-market treatment. Once that structural aim is understood, the market’s optimism becomes easier to assess.

For larger institutions and compliant exchanges, this could make the market easier to enter and operate in. However, for firms that have benefited from regulatory uncertainty, it could mean a tougher environment.

How Cryptocurrency Markets will React

The market sees CLARITY as supportive for one main reason: it could make crypto trading infrastructure easier to defend, operate, and scale in the US.

• Secondary trading could become clearer If exchanges and market makers gain more confidence that trading a token after issuance is not automatically a securities transaction, that would remove one of the biggest legal overhangs on US token markets.
• Disclosures could become more tailored The bill does not force every crypto project into a traditional stock-market model. Instead, it creates a more crypto-specific route for qualifying digital commodity activity.
• The impact goes beyond Bitcoin CLARITY is aimed at token-market structure more broadly, which means the potential benefit sits across the wider crypto market rather than only in the largest names.

That said, this remains an early-stage story. Markets can reasonably interpret CLARITY as a sign that US lawmakers are moving closer to a more durable digital-asset framework. But that is not the same thing as having that framework in place.

This distinction matters because legislation does not move in a straight line. The House bill gives one view of how the crypto market structure could be organised, but the Senate has not simply adopted that version.

Liquidity Risk Sensitivity in Crypto

The market is still reacting to a direction of travel rather than a final destination.

If CLARITY continues to drive headlines, the products most likely to react are generally altcoin-linked instruments rather than the broad crypto complex as a whole. The reason is straightforward: regulatory clarity tends to matter most where legal uncertainty has been most visible.

That creates a useful distinction between benchmark crypto exposure and regulation-sensitive altcoin exposure. Bitcoin may still reflect the broader mood of the sector, but many altcoins sit closer to the specific questions CLARITY is trying to answer. As a result, they may show stronger sensitivity if traders begin to price in changes around market access, legal treatment, or exchange confidence.

The closer an asset sits to the questions of listing support, exchange treatment, and token-market structure, the more relevant CLARITY becomes to how traders interpret its outlook.

To differentiate cryptocurrency, read more in BTCUSD and Altcoins: Everything You Need to Know

Potential Market Impact

If the market starts to distinguish between broad crypto sentiment and regulation-linked token sentiment, that would be one of the clearest signs that traders are moving beyond politics and beginning to price structure.

This week’s market outlook has already shown it can respond to the idea of progress. The next stage is whether it responds to substance.

On balance, CLARITY points toward a more structured direction for US crypto regulation. The real test remains what survives Senate negotiations, how the final text divides regulatory authority, and how workable those rules look once translated from legislative language into actual market practice.

Until those answers become clearer, the most sensible stance is neither blind celebration nor outright dismissal, but disciplined attention to where the market is starting to draw its own lines.

What the CLARITY Act Means for Crypto CFD Trading

While the CLARITY Act debates whether altcoins like SOL or ADA are “securities” or “commodities,” crypto CFD (Contract for Difference) traders are largely unaffected. CFD traders speculate on price movements rather than owning the underlying tokens, meaning they are not subject to custody or wallet-registration requirements currently being debated in the Senate.

At the same time, regulatory headlines such as the March 8 delay can trigger sharp price swings. With crypto CFDs, traders can go long if there are signs of a Senate breakthrough, or go short if political delays weaken market sentiment.

For crypto CFD traders, the CLARITY Act is therefore less about immediate product changes and more about volatility and sentiment in the broader crypto market.

Expected Impact by Asset Tier

For traders looking to navigate this uncertainty:

1. Monitor the SAVE Act: If it passes quickly, the CLARITY Act could move back to the front of the queue.
2. Focus on Tier-1 Altcoins: Assets like SOL, BNB, and ADA remain the most sensitive to CLARITY Act headlines.
3. Leverage CFD Flexibility: Use the agility of CFDs to hedge against or capitalise on regulatory delays.

Download the VT Markets app to monitor real-time price action in the CFD cryptocurrency market.

CLARITY Act Refresher

What is the CLARITY Act of 2025?

The CLARITY Act is a proposed US federal framework designed to establish a formal market structure for digital assets. Its primary function is to reclassify Digital Commodities under the jurisdiction of the Commodity Futures Trading Commission (CFTC), effectively separating them from SEC Investment Contracts.

Is the CLARITY Act already law?

No. As of March 10, 2026, the House-passed CLARITY Act is not yet law. It passed the US House of Representatives in July 2025, but Senate negotiations are still ongoing, which means the final version and timing remain uncertain.

What is the CLARITY Act in simple terms?

The CLARITY Act is a proposed US crypto market-structure bill. Its main goal is to create clearer rules around digital commodities, token issuers, exchanges, brokers, dealers, and regulatory oversight, with a larger role for the CFTC in parts of the digital-asset market.

Why is the CLARITY Act seen as positive for crypto?

Many market participants view the CLARITY Act as positive because it could replace regulatory ambiguity with a more structured framework. Clearer rules may support exchange confidence, improve secondary trading conditions, and make it easier for institutions and compliant firms to participate in the crypto market.

Why are traders still cautious about the CLARITY Act?

Traders are still cautious because the bill has not completed the legislative process. Senate negotiations have faced delays and disagreements, so there is still uncertainty around what the final market structure will look like and how the rules would be implemented in practice.

Could the CLARITY Act affect altcoins more than Bitcoin?

Potentially, yes. Altcoins may be more sensitive because the bill is closely tied to token-market structure, listings, exchange access, and disclosure treatment across the wider digital-asset market. That means regulatory clarity could have a stronger effect on tokens that have faced more legal or listing uncertainty.

What is the current status of the CLARITY Act in 2026?

House Status: The bill successfully passed the US House of Representatives on July 17, 2025.

Senate Status: As of March 10, 2026, the bill remains stalled in the Senate due to disagreements over stablecoin rewards and Anti-Money Laundering (AML) provisions.

Legal Standing: The act is not yet law; it is currently a legislative proposal undergoing intense negotiation

Does the CLARITY Act directly affect crypto CFDs?

Not directly in the same way it affects US spot digital-asset market structure. For crypto CFD traders, the main relevance is likely to come through sentiment, volatility, liquidity, and price action in the underlying crypto market rather than a direct rewrite of the CFD product itself. At VT Markets, we provide a regulated and reliable trading platform to continue Crypto CFD trading.

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Key Points

• CL-OIL trades at 93.250, up +4.892 (+5.54%), with MA5 88.845, MA10 81.223, MA20 73.091, MA30 70.031.
• The IEA plans to release 400 million barrels from reserves, while the US will release 172 million barrels from its Strategic Petroleum Reserve starting next week.
• The US release will take roughly 120 days, averaging around 1.4 million barrels per day, while total coordinated supply may reach 3.3 million b/d, which ING says is still far below Gulf supply losses.

Oil prices remain firm even after policymakers unveiled a coordinated reserve release. The International Energy Agency plans to release 400 million barrels from emergency reserves to stabilise markets shaken by supply disruptions in the Persian Gulf.

The United States will contribute 172 million barrels from its Strategic Petroleum Reserve, with the release beginning next week. ING estimates the release will unfold over roughly 120 days, equating to around 1.4 million barrels per day from the US alone.

However, the strategy appears too small to offset the disruption. If other countries follow a similar schedule, ING calculates the combined release may reach 3.3 million b/d. That remains well below the supply losses currently linked to the Persian Gulf conflict.

This mismatch between policy action and physical supply loss explains why oil continues to trade with a strong risk premium.

If disruptions persist and reserve releases remain smaller than lost supply, crude may stay elevated even as governments attempt to stabilise prices. If shipping flows resume and exports recover, the reserve release could accelerate a pullback.

Supply Losses Continue to Dominate Oil Pricing

The core driver remains the scale of disrupted Middle East supply. Strategic reserves can smooth short-term shocks, but they rarely replace long-term production losses.

Markets tend to view emergency reserves as temporary relief rather than structural supply. If the conflict continues to constrain exports from the Persian Gulf, traders will keep pricing oil around the expected shortfall rather than the policy response.

Even with coordinated intervention, the market is effectively facing a supply deficit that exceeds the 3.3 million b/d cushion policymakers may provide.

As long as Gulf supply remains impaired, oil may trade with sharp upward bursts. If production or shipping routes reopen faster than expected, prices could fall quickly as the market unwinds the geopolitical premium.

Technical Analysis

WTI crude oil (CL-OIL) is trading near $93.25, up roughly 5.54%, as prices continue to rebound following the sharp correction from the spike to $119.43. The market has stabilised above the $90 level after last week’s volatility, suggesting that buyers are attempting to reassert control following the rapid surge and pullback.

From a technical standpoint, oil remains firmly above its key moving averages. The 5-day moving average (88.85) and 10-day (81.22) are both rising steeply, while the 20-day (73.09) and 30-day (70.03) remain well below current prices. This wide separation between price and the longer-term averages reflects the strength of the recent bullish breakout and indicates that the broader trend remains upward despite short-term volatility.

Immediate resistance now sits around $100–$105, which marks the upper portion of the recent consolidation range following the spike. A break above this zone could reopen the path toward $110–$119, where the previous rally peaked.

On the downside, initial support is seen near $90, followed by stronger support around $85, which aligns with the recent breakout structure and the rising short-term moving averages.

Overall, oil markets remain highly volatile but structurally bullish, with prices attempting to build a new base above the $90 region. Holding above this level would reinforce the current recovery phase, while a sustained move above $100 could signal renewed bullish momentum in the energy market.

Policy Versus Physical Supply

The coordinated reserve release represents a clear attempt by policymakers to prevent a full-scale energy shock. Yet the numbers underline the challenge: 400 million barrels of reserves spread over months cannot fully offset lost exports if major Gulf producers remain constrained.

Energy markets tend to respond most strongly to real-time flows rather than policy signals. Until traders see sustained shipping through key export routes, particularly those tied to Gulf supply, the reserve plan alone may struggle to cap volatility.

Reserve releases can slow price spikes and reduce panic buying. However, if geopolitical risk continues to disrupt exports, crude may remain volatile and sensitive to any news on shipping routes, production recovery, or further policy intervention.

Learn more about trading Energies on VT Markets here.

FAQs

1. What is the IEA Planning to Do With Oil Reserves?
   The International Energy Agency plans a coordinated release of 400 million barrels of oil from emergency reserves to ease market stress linked to supply losses from the Persian Gulf.
2. How Much Oil Will the US Release From Its Strategic Petroleum Reserve?
   The US will begin releasing 172 million barrels from its Strategic Petroleum Reserve starting next week.
3. How Long Will the US Release Take, and What is the Daily Rate?
   ING estimates the US release will take roughly 120 days. That works out to around 1.4 million barrels per day.
4. How Big is the Total Coordinated Release in Barrels Per Day?
   ING estimates that if other countries follow a similar timeline, the combined release could average 3.3 million b/d.
5. Why Can Oil Prices Rise Even When Governments Release Reserves?
   Markets price the gap between supply and demand, plus risk. If the disrupted Gulf supply exceeds the expected 3.3 million b/d relief flow, traders can keep bidding oil higher because the deficit still exists.

Start trading now – Click here to create your real VT Markets account

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Key Takeaways

• The CLARITY Act debate in Washington is creating uncertainty across digital asset markets as lawmakers struggle to finalise a regulatory framework for crypto.
• Banking opposition to stablecoin rewards highlights a growing battle between traditional finance and the emerging digital asset economy.
• The Trump administration is pushing for faster crypto regulation, arguing delays could push innovation overseas.
• Traders are also watching US CPI inflation data, which may influence Federal Reserve rate expectations and US dollar strength.
• Key technical levels remain in focus across major markets, including gold near $4,996, Bitcoin defending $62,502 and USDX testing resistance near 99.631.

One of the biggest developments shaping market sentiment this week is the growing political battle around the Digital Asset Market Clarity Act of 2025, widely known as the CLARITY Act.

The legislation was originally designed to reset the regulatory framework for digital assets in the United States. After passing the House of Representatives with strong bipartisan support last year, the bill aimed to clearly divide regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

However, progress has slowed dramatically in the Senate. What began as a technical attempt to define crypto market structure has evolved into a broader economic debate about the future of digital finance and the role of the traditional banking system.

For traders, the outcome matters because regulatory clarity could unlock institutional participation in digital assets, while prolonged delays may continue to create volatility in crypto markets.

Why the Bill Has Stalled in Washington

The primary obstacle facing the CLARITY Act is a breakdown in negotiations over the revised Senate version of the bill.

While the House legislation moved quickly, Senate discussions encountered resistance early in 2026. A scheduled markup session in January was postponed indefinitely after several major industry participants withdrew their support for the latest draft.

Crypto firms argued that the revised proposal introduced rules that were too restrictive and could limit innovation in the sector.

The White House attempted to force progress by setting a drafting deadline of March 1, 2026, but that date passed without an agreement. The delay has now become a focal point for markets watching how the United States intends to regulate the rapidly growing digital asset economy.

Banking Opposition and the Risk of Deposit Flight

Traditional banks have emerged as some of the most vocal opponents of the current version of the legislation.

Their concerns centre around a provision that would allow stablecoin issuers and crypto platforms to offer interest-like rewards on digital dollar tokens. Banks argue that this could create a powerful incentive for consumers to move deposits away from traditional savings accounts and into crypto wallets.

Industry estimates suggest that if stablecoins begin offering yields around 5%, while conventional savings accounts remain far lower, the shift could pull substantial liquidity out of the banking system.

The American Bankers Association has warned that this migration could remove as much as $500 billion in deposits from the US banking sector by 2028.

For financial markets, the debate highlights a deeper conflict between legacy financial institutions and emerging digital asset platforms.

Trump Administration Pushes Crypto Agenda

President Trump has taken a more direct role in the debate, framing the CLARITY Act as a key pillar of his administration’s digital asset strategy.

In recent statements, the administration has criticised major banks for lobbying against the bill, accusing them of attempting to protect their profit margins by slowing regulatory reform.

The White House has also argued that delays could push digital asset innovation overseas, particularly toward countries that are already implementing clearer regulatory frameworks.

From the administration’s perspective, establishing the United States as a global centre for crypto innovation is both an economic and geopolitical objective.

For traders, this political backing increases the likelihood that some form of regulatory framework will eventually emerge, although the timeline remains uncertain. Read recent economic updates connected to Trump here.

Possible Paths Toward a Compromise

Despite the current stalemate, policymakers are exploring several potential compromises.

One proposal from the White House would allow stablecoin rewards only when tokens are actively used for payments, while preventing interest-style rewards on idle balances that resemble traditional savings accounts.

Another development gaining traction is the rise of federal trust bank charters for crypto companies. Several fintech and digital asset firms have recently applied for or received these charters through the Office of the Comptroller of the Currency, allowing them to operate with a degree of federal oversight while broader legislation remains unresolved.

While these measures do not replace the CLARITY Act itself, they may offer a temporary pathway for the industry as lawmakers continue negotiations.

Legislative Timeline Traders Should Watch

The political calendar is also becoming a critical factor.

With US midterm elections approaching in 2026, the window for passing the legislation is narrowing.

Current expectations suggest several key milestones:

• March 2026: Closed-door negotiations continue after the missed drafting deadline.
• April 2026: New rules around federal crypto charters could begin taking effect.
• May 2026: Final opportunity for a Senate Banking Committee markup before election season dominates the agenda.
• August 2026: Target window for a full Senate vote.
• January 2027: Potential implementation date if the bill passes before year-end.

For markets, these milestones will shape expectations for regulatory clarity and could influence the trajectory of digital asset investment in the United States.

Key Symbols to Watch

Gold (XAUUSD) | Bitcoin (BTCUSD) | USDX | SP500

Upcoming Events

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Key Movements Of The Week

Gold (XAUUSD)

• XAUUSD consolidates above $4,996 support.
• Break below $4,842 may attract stronger sellers.
• CPI inflation data could trigger volatility.

Bitcoin (BTCUSD)

• BTCUSD rejected after breaking $70,969 swing high.
• $62,502 now acts as the final defence for buyers.
• Crypto regulation debate adds volatility risk.

US Dollar Index (USDX)

• USDX gapped higher at the start of the week.
• Break above 99.631 could trigger move toward 100.321.
• CPI may decide the next direction.

SP500

• SP500 failed near 6,902 resistance and printed a swing low.
• 6,517 now acts as the crucial support level.
• Geopolitical tensions increase volatility.

Bottom Line

Markets are entering the week with several competing forces shaping price action. Inflation remains the central macro driver, with US CPI expected at 2.5% year on year. A stronger reading could reinforce US dollar strength and delay expectations for Federal Reserve rate cuts.

At the same time, geopolitical tensions and rising oil prices above $100 are adding risk premium to global markets. Technically, gold continues to consolidate above $4,996, Bitcoin is defending the $62,502 support level after a failed breakout above $70,969, and the US Dollar Index is testing resistance near 99.631.

These levels will likely determine the next directional move as traders react to inflation data, regulatory developments in crypto markets, and shifting global risk sentiment.

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Trader FAQs

1. What is the outlook for gold prices this week?
   Gold (XAUUSD) is trading in consolidation while markets wait for US CPI data. The key level to watch is $4,996, which currently acts as support. If gold falls below this level, sellers may begin targeting $4,842, where stronger downside momentum could develop. Inflation data and US dollar strength will likely determine the next major move.
2. Why did Bitcoin fall after breaking above $70,000?
   Bitcoin briefly broke above the $70,969 swing high, but the move quickly reversed as traders took profit and risk sentiment weakened. The market is now defending $62,502, which has become the most important support level in the current structure. A sustained break below this level could open the door for a deeper correction.
3. How does the CLARITY Act affect Bitcoin and crypto markets?
   The Digital Asset Market Clarity Act aims to define regulatory oversight between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). However, the bill has stalled in the Senate due to disagreements around stablecoin rewards and banking oversight. This regulatory uncertainty is contributing to volatility in Bitcoin and broader digital asset markets.
4. Why is the US CPI important for traders?
   US Consumer Price Index (CPI) data measures inflation and strongly influences expectations for Federal Reserve interest rate decisions. If inflation comes in higher than expected, the Federal Reserve may delay rate cuts, which could strengthen the US dollar and pressure assets such as gold and Bitcoin.
5. What levels should traders watch in the US Dollar Index (USDX)?
   The US Dollar Index recently gapped higher, with traders watching 99.631 as the immediate resistance level. If the dollar breaks above this level, it could move toward 100.321, strengthening the currency further and potentially weighing on commodities such as gold.

Key Points

• Gold futures in New York fall 0.7% to $5,204.40 a troy ounce, while spot remains above the $5,200 mark amid mixed Middle East signals.
• ANZ says conflict updates “obscure the outlook for interest rate cuts in the U.S.” and traders withdraw increasing amounts of gold from ETFs.
• XAUUSD trades at 5197.83, up +5.07 (+0.10%), with MA5 5157.19, MA10 5180.30, MA20 5113.12, MA30 5066.82, plus a recent swing high at 5598.60 and prior low at 3886.61.

Gold Faces a Two-way Push From Headlines and Rates

Gold eased in early trading yet stayed above $5,200 as traders weighed mixed messaging on the Middle East conflict. The market had gained in the prior session as a softer dollar and falling oil prices reduced near-term inflation fear. That shift can support bullion because it lowers the hurdle for Fed cuts and trims real yields.

At the same time, traders still struggle to price the rate path. ANZ’s point matters here: “the developments continue to obscure the outlook for interest rate cuts in the U.S.” When the path for cuts looks less clear, gold can lose momentum even if geopolitics stays tense.

If oil continues to fall and the dollar stays soft, gold can hold above $5,200 and try to grind higher. If yields rise again on inflation fear, gold may rotate lower even if headlines keep the safe-haven case alive.

ETF Flows Turn Into A Pressure Point

ANZ flagged that traders are withdrawing increasing amounts of gold from ETFs. ETF flows matter because they often reflect broader portfolio behaviour rather than short-term trading. When traders pull metal from ETFs, it can cap rallies and make breakouts harder to sustain.

This does not mean gold must fall. It does mean gold may need fresh catalysts, such as softer inflation prints or a deeper risk-off move, to offset the flow drag.

If ETF outflows persist, gold may need stronger macro support to reclaim recent highs. If flows stabilise or reverse, price can respond quickly because positioning becomes lighter.

US Inflation Data Sets The Next Direction

Traders now wait for US inflation data later this week for clearer guidance on the interest-rate outlook. CPI and PCE can shift the curve fast because they affect how markets price the next Fed move. Reuters reporting this week has kept that “data first” mindset front and centre for bullion.

The current price action fits that setup. New York gold futures are down 0.7% to $5,204.40 a troy ounce, which reads like caution ahead of data rather than panic selling.

A hotter print can lift yields and pressure gold, even if spot stays above $5,200 early on. A softer print can revive cut pricing and support a move higher, but the market may still react in sharp bursts due to headline risk from geopolitics.

Technical Analysis

Gold (XAUUSD) is trading near 5,198, up modestly by around 0.10%, as the metal continues to consolidate following the pullback from the 5,598.60 peak earlier in the year. Recent price action shows the market stabilising within a relatively narrow range, suggesting a period of digestion after the strong bullish rally seen through January.

From a technical perspective, gold is hovering around its short-term moving averages. The 5-day moving average (5,157) sits slightly below the current price, while the 10-day (5,180) is almost aligned with the market, reflecting a balanced short-term structure.

Meanwhile, the 20-day moving average (5,113) and 30-day (5,066) remain below current levels and continue trending upward, reinforcing the broader bullish trend.

Immediate resistance is located around 5,250–5,300, where recent upward attempts have struggled to gain traction. A sustained break above this zone could bring the market back toward 5,400, followed by the previous high near 5,600. On the downside, initial support is seen near 5,100, aligning with the 20-day moving average, with stronger structural support closer to 5,000.

Overall, gold appears to be consolidating within a longer-term uptrend, with price currently moving sideways as the market absorbs earlier gains. Holding above the 5,100 region keeps the bullish structure intact, while a breakout above 5,300 would likely signal renewed upward momentum toward recent highs.

What to Watch Next

• Whether New York futures hold the 0.7% dip at $5,204.40 without follow-through selling.
• Any shift in ETF flow momentum as traders “withdraw increasing amounts of gold from ETFs.”
• CPI and PCE reactions, because rate-cut clarity remains the main driver when the conflict narrative sends mixed signals.

Learn more about trading Precious Metals on VT Markets here.

FAQs

1. Why is Gold Still Above $5,200 if Prices Fell in Early Trading?
   Gold held above $5,200 because buyers still treat the level as a buffer while the market digests mixed Middle East signals and waits for US inflation data. The pullback looks more like positioning and uncertainty than a clean shift in trend.
2. What Does “Mixed Messages” on the Middle East Conflict Mean for Gold?
   It keeps the safe-haven case alive, but it also increases day-to-day whipsaws. If markets think escalation risk is fading, gold can soften. If traders fear renewed disruption, gold can firm quickly. This push-pull often keeps price range-bound near major levels like $5,200.
3. Why Did Gold Gain in the Previous Session?
   Bullion gained as a softer dollar and falling oil prices eased inflation concerns. When oil falls, markets often assume less inflation pressure, which can make rate cuts more plausible and support gold.
4. Why Do Interest Rate Cut Expectations Matter for Gold?
   Gold does not pay interest. When investors expect fewer rate cuts, yields can stay higher, which raises the opportunity cost of holding gold. That is why ANZ said recent developments “obscure the outlook for interest rate cuts in the U.S.”
5. What Are Gold ETF Outflows, and Why Do They Matter?
   ETF outflows mean investors are reducing holdings in gold-backed exchange traded funds. ANZ said investors withdraw increasing amounts of gold from ETFs. Persistent outflows can cap rallies because they reflect slower, portfolio-level selling rather than short-term trading noise.

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Key Takeaways:

• The AI revolution still depends on physical infrastructure, including data centres, supply chains, and industrial production.
• Oil plays a critical role in powering transportation, construction, and petrochemicals used in technology manufacturing.
• Geopolitical tensions in major oil-producing regions can influence energy prices and indirectly affect AI development costs.
• Data centres require enormous energy consumption, linking the growth of AI to global energy markets.
• AI is also transforming the oil industry, helping companies improve exploration, efficiency, and production.

The Illusion of a Fully Digital Economy

Artificial intelligence is often presented as the defining force of the 21st-century digital economy. Technology companies are investing hundreds of billions of dollars into advanced AI models, while governments around the world are accelerating efforts to build the digital infrastructure required to support this transformation.

As artificial intelligence expands across sectors ranging from healthcare and finance to logistics, manufacturing, and energy, the modern economy increasingly appears to be driven by algorithms, data, and computing power.

Global Data Centre Electricity Demand Growth

Data Centre Energy Consumption Breakdown

Key Data: Global Data Centre Electricity Consumption (2020–2035) According to IEA projections, data centre energy demand follows four primary sensitivity paths:

• Lift-Off (Accelerated Growth): Electricity demand is projected to reach approximately 1,750 TWh by 2035.
• Base Case: Forecasts a steady climb to roughly 1,200 TWh by 2035.
• High Efficiency: With advanced optimization, demand could be limited to just under 1,000 TWh.
• Headwinds (Stagnation): Constraints on growth could keep consumption near 700 TWh.

To many observers, this transformation suggests a departure from the traditional industrial economy. The digital world appears to operate independently from the physical systems that shaped earlier stages of economic development.

Yet this perception only captures part of reality.

Despite its digital nature, the artificial intelligence revolution does not operate in isolation from the traditional economy. Behind every algorithm and intelligent system lies a vast industrial framework composed of energy production, global supply chains, construction, and physical infrastructure.

At the centre of this framework remains one of the most important resources in the global economy: oil.

Why AI Scaling Depends on Heavy Industry and Diesel Fuel

Artificial intelligence may appear intangible, but the systems that power it are deeply physical. Advanced AI models rely on extensive computing infrastructure consisting of servers, specialised processors, and large-scale data centres.

Constructing a modern data centre is comparable to building a major industrial complex. These facilities require large quantities of cement, steel, and specialised equipment, along with heavy construction machinery that operates on diesel fuel. Hardware components and semiconductor equipment must travel through global logistics networks before reaching their final destination.

Once operational, data centres consume enormous amounts of electricity to support thousands of processors operating continuously. Maintaining stable operating temperatures also requires advanced cooling systems, which add further energy demands. As global adoption of artificial intelligence continues to expand, the energy requirements needed to support this digital infrastructure are rising rapidly.

The Petrochemical Foundation of AI: Using Oil to Build Hardware and Semiconductors

Oil remains deeply embedded within the industrial ecosystem that enables modern technology. Global transportation networks responsible for moving hardware, semiconductor components, and electronic equipment depend heavily on fossil fuels. At the same time, petrochemical industries derived from oil supply essential materials used throughout the technology sector.

Many components within modern electronics originate from petrochemical processes. Plastics used in devices, insulation materials that protect cables, and numerous structural elements within servers and computers all rely on oil-based derivatives. As a result, even the most advanced artificial intelligence systems ultimately depend on a network of industries closely tied to traditional energy resources.

Geopolitics, Oil Markets, and the Cost of Technology

Oil’s influence on the digital economy extends beyond infrastructure and manufacturing. Developments in global energy markets, particularly those shaped by geopolitical tensions, can significantly affect the broader economic environment in which technological systems operate.

Oil markets have historically been highly sensitive to geopolitical developments, especially in the Middle East, a region that contains some of the world’s largest oil reserves and plays a central role in global energy supply.

Recently, crude oil prices surged above $110 per barrel amid rising tensions in the region. Markets reacted quickly to concerns over potential supply disruptions and instability surrounding key energy corridors.

One of the most strategically important chokepoints is the Strait of Hormuz, through which roughly 20 million barrels of oil pass each day. This represents nearly 20 percent of global oil consumption, making it one of the most critical maritime routes for energy transportation. Any threat to this corridor introduces a geopolitical risk premium into oil prices, reflecting the possibility of supply disruption.

Satellite map showing vessel density in the Strait of Hormuz on 27 February 2026 vs 3 March 2026, highlighting the strategic maritime chokepoint

Source: BBC

When Energy Prices Rise, Technology Feels the Impact

Increases in oil prices rarely affect only the energy sector. Higher energy costs tend to ripple throughout the global economy by increasing transportation expenses, raising manufacturing costs, and pushing up the price of construction materials.

These sectors form the industrial base that supports the development of the digital economy. Data centres must be constructed, equipment must be manufactured and transported across continents, and large electrical systems must be installed to maintain reliable operations.

Consequently, fluctuations in energy prices can indirectly influence the cost of building and operating artificial intelligence infrastructure, including data centres, semiconductor manufacturing facilities, and the global supply chains that support the technology sector.

Even in an economy increasingly defined by data and algorithms, energy costs remain a fundamental factor shaping technological development.

Artificial Intelligence is Also Transforming the Oil Industry

The relationship between artificial intelligence and oil is not purely one of dependency. In recent years, the energy industry itself has begun adopting AI technologies to improve efficiency and optimise resource management.

Oil and gas companies increasingly use artificial intelligence to analyse geological data, identify promising drilling locations, and enhance reservoir modelling. Machine learning systems are also used to predict equipment failures before they occur, allowing operators to reduce downtime and avoid costly disruptions.

By improving operational efficiency and providing deeper analytical insights, artificial intelligence helps energy companies manage resources more effectively and optimise production processes.

A Symbiotic Relationship Between Old and New Economies

This dynamic highlights the mutually reinforcing relationship between the digital economy and traditional energy systems. Oil continues to support the industrial infrastructure that powers artificial intelligence, while AI provides advanced tools that allow the energy sector to operate more efficiently.

Rather than replacing the traditional industrial economy, artificial intelligence is evolving alongside it.

Major technological revolutions rarely emerge in isolation. Instead, they build upon existing economic systems and infrastructure that have developed over decades. The rise of artificial intelligence, therefore, represents not a break from the industrial past but an extension of it.

The Future: Technology Built on Energy

Artificial intelligence represents one of the most transformative technological developments of the modern era. Yet its rise does not mark the end of the industrial foundations that preceded it.

The digital revolution remains supported by energy systems, global supply chains, and physical infrastructure that continue to underpin modern industry. Every AI model, data centre, and intelligent system ultimately depends on these material foundations.

The future of the global economy will therefore be shaped not by technology or natural resources alone, but by the interaction between them. In that evolving relationship, oil and artificial intelligence remain far more connected than many people realise.

The Big Questions

1. Does the growth of AI actually increase global oil demand?

While AI is digital, its existence depends on massive physical expansion. Building data centres requires heavy industrial production, and global supply chains rely on fuel-intensive logistics to move hardware. As AI scales, the industrial framework supporting it continues to draw heavily on traditional energy resources.

2. Why do data centres still rely on fossil fuels if they are moving to green energy?

Energy costs are a major factor in the total cost of ownership for technology. When tensions rise in regions like the Middle East or near chokepoints like the Strait of Hormuz, oil prices often spike. These higher costs ripple through the economy, making it more expensive to manufacture semiconductors, transport components, and power the infrastructure that AI runs on.

3. Is AI being used to make the oil industry more efficient?

The relationship is a two-way street. Energy companies are currently using machine learning to analyse geological data and identify drilling locations with higher precision. AI also helps predict equipment failures before they happen, which reduces expensive downtime and optimises overall resource management.

4. Why is oil still relevant in an increasingly digital economy?

The digital economy is an illusion if viewed as something separate from the physical world. Beyond just power, oil is the literal raw material for the tech industry; petrochemicals are used to create plastics, insulation, and internal components found in every server and computer. AI isn’t replacing the old economy; it is being built right on top of it.

5. Does AI increase oil demand?

Yes. AI growth requires physical data centres built with steel and cement, and global hardware logistics powered by diesel fuel.

6. How does AI help the oil industry?

AI uses machine learning to analyze geological data, identify drilling locations, and predict equipment failure to reduce downtime.

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