• Rising Treasury yields led by the 2-year as concerns about inflation persist and geopolitics sway sentiment. (US 2Y yield: +12.0 bp, z=+2.36σ) • Heating oil plummeted significantly amidst supply fears linked to geopolitical tensions, reflecting risk-off sentiment. (-9.65%, z=-3.47σ) • US job openings surge in latest JOLTS report, indicating robust labor market dynamics contrary to market's overall risk tone. Market Wrap: Today's trading session was marked by rising Treasury yields and sector-specific sell-offs following escalating concerns about inflationary pressures resulting from ongoing geopolitical tensions, particularly with the war in Iran influencing investor sentiment. According to CNBC, mortgage rates have reached a seven-month high due to these rising yields. This bearish tone was evident across equities, where risk-off positions seemed to dominate with significant losses in technology and industrial stocks, evident from a sharp drop in the industrials sector (-2.56%) and tech (-2.22%). The economic calendar featured several significant releases, including the JOLTS job openings, which reported a surprising increase to 6.95 million versus expectations of 6.76 million. This stronger-than-anticipated data highlights the resilience of the labor market despite inflation headwinds. The Atlanta Fed's GDPNow has boosted its estimate for Q1 2026 GDP growth to 2.70%, indicating above-trend growth relative to consensus. This growth narrative, however, contrasted sharply with risk-off sentiment in equities evidenced by the VIX rising +12.63% today, reflecting heightened uncertainty among investors. In rates, the 2-year Treasury yield rose sharply by 12 basis points to 3.76% while the 10-year rose 6 basis points to 4.27%, steepening the yield curve slightly. The pronounced rise in short-term rates suggests renewed hawkish expectations as market implied probabilities show a strong likelihood (94%) of the Fed keeping rates in the 350-375 bp range through May, according to CME FedWatch. A persistent rise in CCC corporate yields (+25.0 bp) along with high-yield yields (+9.0 bp) points to increased credit risk amid these conditions. Equities struggled, particularly affected by bearish moves from mega-cap stocks such as Meta Platforms, which fell -3.21% after concerns over disappointing performance from AI initiatives. Other major tech stocks like Amazon and Microsoft also saw declines of -0.80% and -0.53%, respectively. The industrials sector faced a harsh sell-off, driven by weakened investor sentiment amid the geopolitical landscape. On the commodities front, heating oil showcased an extreme drop of -9.65% as traders reacted to heightened uncertainties surrounding supply lines due to the Iran conflict, suggesting an overreaction that may present a buying opportunity for longer-term value investors if geopolitical fears stabilize. Conversely, WTI crude oil saw a modest gain of +1.09%, highlighting the complex dynamics impacting energy markets. The liquidity regime signal, as of March 12, indicates improving macro liquidity conditions (momentum +0.977) with accelerating improvement (+0.0674). However, this positive liquidity momentum appears at odds with today's market action, signaling that market participants remain cautious despite broader supportive conditions. Looking ahead, key economic releases next week include Retail Sales and CPI on March 21, which could recalibrate market expectations for the Fed's actions as inflation trajectories will be scrutinized closely. Investors are advised to prepare for heightened volatility in the face of these indicators and should watch for positioning shifts as markets grapple with inflationary pressures versus labor market resilience. Investors should remain alert, as today's sell-off may present tactical entry points in attractively priced equities, particularly in sectors demonstrating solid fundamentals over the long term. Tone is skewed cautiously risk-off as markets navigate tightening liquidity and persistent inflation signals.