S&P 500 and Dow futures are down roughly 0.3% as the February CPI report, released at 8:30 AM this morning, landed exactly at consensus — +2.4% year-over-year, +0.3% month-over-month — without providing the catalyst for a meaningful relief rally.^[1] The bigger force remains oil: Iranian forces struck three additional cargo vessels in or near the Strait of Hormuz overnight, lifting WTI crude 2.5% to $85.55 and sustaining the energy-driven inflation anxiety that has dominated this market for nearly two weeks.^[8] The International Energy Agency announced it is weighing the largest strategic petroleum reserve release in its history — 400 million barrels, more than double any prior release — to cap the surge, though the proposal has yet to materially move crude.

Oracle's 10% pre-market jump after Tuesday's earnings beat is providing a floor under large-cap tech, and is keeping Nasdaq 100 futures from a deeper decline. AeroVironment's 9% drop on a revenue miss and guidance cut is the counterweight.

What's driving it

Three more ships were struck in the Strait of Hormuz overnight — one 11 nautical miles north of Oman, forcing crew evacuation; two others near Dubai and the UAE coast.^[8] The U.K. Maritime Trade Operations confirmed all three incidents. Commercial tanker traffic through the strait remains near zero for Western-flagged vessels; the waterway routes roughly 20% of global seaborne oil.

WTI has now fallen from a conflict peak near $120 to $85.55 — a significant reversal driven by Trump's diplomatic pressure and the IEA reserve release announcement — but the fresh overnight attacks are a reminder that the trajectory is not a straight line down.^[9] Iran continues to selectively allow Chinese and Muslim-majority-operated vessels to transit while blocking Western-flagged shipping. Energy Secretary Chris Wright's since-corrected claim on social media that the U.S. Navy had already escorted a tanker through the strait briefly moved crude before the White House walked it back.^[9]

The 10-year yield at 4.14% — up just 2 basis points after the in-line CPI — reflects the market's view that the inflation data itself is not a shock. The threat is the next 60 days: February's numbers were collected before the oil surge took hold, and gas prices have climbed nearly 60 cents per gallon since the conflict began.^[3] March and April CPI will be a different conversation.

On the calendar

February CPI is the headline today — already out: +2.4% YoY / +0.3% MoM on headline, +2.5% YoY / +0.2% MoM on core. Both figures matched estimates. Shelter rose 0.2% on the month (3.0% YoY); rent posted its smallest monthly gain since January 2021. Gasoline fell 5.6% annually — a number that no longer reflects reality at the pump.^[2]

The Fed meets March 18. Markets are pricing a 99%+ probability of no change; the debate has shifted to whether the oil shock will push the next cut further out from September or off the table entirely for 2026. PPI is Thursday; PCE is Friday — both will be read for confirmation of the in-line CPI picture before the blackout period ends.

Movers

Oracle (ORCL) is up 10% pre-market after reporting Q3 FY2026 after Tuesday's close. The headline beat and the FY2027 guidance raise are doing the work — details below.^[5]

AeroVironment (AVAV) fell roughly 9% in extended trading after the drone maker missed on both revenue and earnings and cut its full-year outlook. A stop-work order on a Space Force contract was the proximate cause; government funding delays were the broader context.^[6]

Earnings on deck

Oracle (ORCL) reported Q3 FY2026 on Tuesday after the close. Revenue: $17.2 billion (+22% YoY) vs. $16.9 billion estimated. Non-GAAP EPS: $1.79 vs. $1.70 estimate. Cloud revenue grew 44% to $8.9 billion; OCI (cloud infrastructure) surged 84% — accelerating from 68% the prior quarter. Remaining performance obligations hit $553 billion, up 325% year-over-year, overwhelmingly tied to AI infrastructure contracts. FY2027 revenue guidance raised to $90 billion vs. the $86.6 billion Street estimate. ORCL +10% pre-market.^[4]

AeroVironment (AVAV) also reported Tuesday. Revenue: $408 million vs. $484 million estimated — a 15.7% miss. Adjusted EPS: $0.64 vs. $0.72 estimate. The shortfall was driven by a stop-work order on the SCAR Space Force contract, which triggered a goodwill impairment and compressed gross margins to 27% from 40% a year ago. FY2026 guidance lowered: revenue to $1.85–$1.95 billion (from $1.97B estimate), adjusted EPS to $2.75–$3.10 (from $3.31 estimate). AVAV –9% pre-market.^[7]

The setup

Today's session opens with markets having processed an in-line CPI print and an overnight oil re-escalation in roughly equal measure — and arriving flat. The question is whether the Hormuz situation has enough additional shock capacity left to push crude back above $90, which is where the Fed's calculus visibly shifts and rate-cut timelines start repricing meaningfully. Oracle's result validates the AI infrastructure thesis with hard numbers; the market's job today is to decide how much that matters while energy uncertainty remains the dominant macro overlay. If WTI holds below $90 and the IEA reserve release announcement gains traction, the session could finish higher. If the overnight attacks escalate further, the in-line CPI will quickly become a footnote.