Wall Street Bought the Dip. Oil Kept the Fear.

GOOD MORNING, Wall Street tried to buy the dip Monday after one of its roughest weeks in months, but the rebound never became convincing. U.S.-Iran talks offered some hope of de-escalation, yet the Middle East conflict kept widening and the Strait of Hormuz remained the market's main inflation risk. Elsewhere, Sysco agreed to buy Restaurant Depot for $29.1 billion — a huge bet that scale can protect margins when restaurant demand is softer and costs remain high.

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MARKETS | TLDR

• Stocks fail to hold an early rebound: The S&P 500 fell 0.38%, the Nasdaq Composite lost 0.29% and the Dow dropped 0.51% as optimism over U.S.-Iran talks faded against a still-widening conflict.
• Oil keeps inflation risk elevated: Energy prices remained the key macro pressure point, with gasoline near $4 a gallon and the Fed watching whether the shock starts feeding into broader inflation expectations.
• Private-market managers get a new 401(k) opportunity: A proposed Labor Department rule would make it easier for retirement plans to add private equity and other alternative assets, opening a potentially enormous new pool of long-term capital.

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OIL

Wall Street Bought the Dip. Oil Kept the Fear.

Stocks opened higher Monday as investors responded to President Donald Trump's comments that the United States was in serious discussions with Iran to end the war. The bounce came after a punishing prior week, and for a few hours it looked like another familiar buy-the-dip session.

The problem was that the geopolitical facts did not improve nearly as fast as sentiment. Trump also renewed threats to strike Iranian oil and power infrastructure if the Strait of Hormuz remained closed, while Iran dismissed U.S. proposals as unrealistic and Yemen's Iran-backed Houthis entered the conflict over the weekend. By the close, the S&P 500, Nasdaq and Dow had all given back their early gains.

That matters because oil is now the transmission channel between geopolitics and nearly every other asset class. Higher energy prices threaten margins, household spending and inflation at the same time. Fed Chair Jerome Powell said Monday that policymakers can still “wait and see” because longer-term inflation expectations remain anchored, but the longer Hormuz stays disrupted, the harder it becomes to treat the shock as temporary.

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M&A

Sysco Is Paying $29 Billion for Scale

Sysco agreed to buy Jetro Restaurant Depot for about $29.1 billion, creating a much larger food-distribution platform spanning Sysco's delivery network and Restaurant Depot's cash-and-carry warehouses. Restaurant Depot operates 167 stores across 35 states and serves more than 725,000 independent restaurants and foodservice businesses.

The strategic logic is scale. Independent restaurants are highly sensitive to food inflation and weaker consumer demand, making purchasing power, logistics efficiency and low-cost distribution more valuable. Restaurant Depot's warehouse model complements Sysco's traditional delivery business and gives the combined company more ways to serve customers with different cost structures.

Investors focused on the financing risk. Sysco said it would use roughly $21 billion of new and hybrid debt, plus cash and equity, to fund the deal, and its shares fell sharply after the announcement. The transaction therefore captures a broader corporate tension: scale can protect margins in a difficult demand environment, but buying that scale with a heavily levered balance sheet creates a new problem of its own.

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HEADLINES

• Powell says the Fed can wait and see: The Fed chair said inflation expectations remain anchored for now, giving policymakers room to observe how the Iran war affects prices and growth before changing rates.
• 401(k)s could get private-equity exposure: The Labor Department proposed a framework for adding private equity, crypto and other alternatives to retirement plans, provided fiduciaries assess fees, liquidity, valuation and performance.
• Blackstone, Apollo and Carlyle rally on the retirement-plan proposal: Alternative-asset managers gained as investors priced the possibility of a much larger addressable pool of retirement capital.
• Restaurant Depot gives Sysco direct access to smaller operators: The target's cash-and-carry model serves independent restaurants and small businesses, giving Sysco exposure to customers that do not always fit its traditional delivery model.
• Iran talks remain the market's biggest geopolitical swing factor: Hopes for negotiations supported stocks early, but threats around Hormuz and Iranian energy infrastructure kept investors from fully embracing the relief trade.

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UPCOMING

• JOLTS arrives March 31: February job openings and hiring will show whether labor demand is weakening enough to offset the inflation pressure coming from energy.
• Consumer confidence is due March 31: Household expectations will be an important read on whether higher gasoline prices are starting to damage spending intentions.
• The March jobs report lands April 3: Payroll growth, unemployment and wages will be the week's biggest test of the Fed's ability to stay patient while inflation risk rises.
• March CPI follows April 10: The first major inflation report after the latest oil shock will show whether energy pressure is remaining contained or broadening into consumer prices.

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DEEP INSIGTHS

Powell Says the Fed Can Wait and See

Reuters' coverage of Powell's Harvard remarks is useful because it frames the Fed's problem as a genuine two-sided risk. Oil can push inflation higher while the same geopolitical shock weakens growth, leaving policymakers with less obvious policy choices than a normal inflation surprise.

Private Assets Move Closer to the 401(k) Market

The Labor Department proposal is worth reading beyond the immediate rally in alternative-asset managers. It could eventually give private markets access to a vast pool of retirement savings, but the rule also puts fees, liquidity, valuation and fiduciary responsibility at the center of the debate — exactly the areas where private assets differ most from public funds.