No Good News Yet: Oil Reignites, US Inflation Still Stubborn

Indonesian financial markets are estimated to face substantial pressure today, although a potential rebound remains possible given weakened performance in recent days.

US equity markets closed mixed on Wednesday/Thursday early trading. The Dow Jones Industrial Average fell 289.24 points or 0.61%, closing at 47,417.27. The S&P 500 declined 0.08% to 6,775.80, whilst the Nasdaq Composite rose 0.08%, closing at 22,716.13.

Market weakness reflects investor concerns over oil prices. West Texas Intermediate (WTI) crude futures surged more than 4%, closing at US$87.25 per barrel, whilst Brent crude rose approximately 4.8% to US$91.98 per barrel.

These increases occurred despite the International Energy Agency (IEA) announcing it would release 400 million barrels from reserves—the largest release in history—to address supply disruptions from conflict.

According to Ron Albahary, Chief Investment Officer at Laird Norton Wetherby, the IEA’s decision does not resolve other issues affecting the global economy. He cited refined oil products transiting the Strait of Hormuz, such as jet fuel, as a persistent risk.

“I think the market is wrestling with the question: how do we get out of this situation?” he told CNBC. “Both sides have dug in their heels, and it’s hard to see how this ends positively in the short term.”

Prolonged conflict risks sustaining high oil prices. On Tuesday, US forces sank several Iranian vessels, including 16 minelayers, near the Strait of Hormuz as Tehran attempted to mine the vital shipping lane, a focal point for global oil supply concerns.

The United Kingdom Maritime Trade Operations also reported on Wednesday that three cargo ships off Iran’s coast, including one in the Strait of Hormuz, were struck by projectiles.

This situation emerged just days after US President Donald Trump stated early this week that the war would end “very soon.”

“Trump’s statement that the war might end soon, following extraordinary oil price volatility, may signal that the ‘pain tolerance threshold’ has been reached,” wrote Emmanuel Cau, Head of European Equity Strategy at Barclays, in a Wednesday note.

“The longer oil price spikes persist, the greater the risk of declining corporate earnings and market valuations,” he added.

Meanwhile, the Consumer Price Index (CPI) rose 2.4% year-on-year in February, matching economist expectations surveyed by Dow Jones. This report emerges amid signs of a softening US labour market in recent months.

Positively, Oracle shares surged 9% during Wednesday trading after the software company’s third fiscal quarter earnings and revenue exceeded analyst expectations. The company also raised its fiscal year 2027 revenue guidance.

Opening trading today, market participants face several crucial macroeconomic indicators and fundamental sentiment drivers, both domestic and international.

Market movements are expected to focus on US inflation stability, the domestic state budget’s resilience against geopolitical escalation, and the strategic leadership transition at the Financial Services Authority (OJK).

These multidimensional factors will serve as primary catalysts for capital markets, debt markets, currency valuations, and strategic portfolio decisions today.

Indonesia’s state budget showed stable performance through 28 February 2026. The Finance Ministry reported state revenue reaching Rp358 trillion, approximately 11.4% of the budget target, with 12.8% year-on-year growth.

This increase was significantly supported by tax receipts reaching Rp290 trillion, growing 20.5% year-on-year. Net tax revenue specifically reached Rp245.1 trillion, surging 30.4%.

State expenditure accelerated, reaching Rp493.8 trillion (12.8% of allocation), growing 41.9% year-on-year. This acceleration serves as a shock absorber to maintain household purchasing power and stimulate domestic economic activity.

The state budget deficit remained controlled at 0.53% of gross domestic product (GDP), equivalent to Rp135.7 trillion. The government projects first quarter 2026 economic growth could reach 5.5 to 6%.

US inflation remained stable at 2.4% year-on-year in February 2026, unchanged from January and matching market expectations—the lowest level since May 2025.

US inflation rose 0.3% monthly in February, up from 0.2% the previous month and in line with market forecasts.

Core CPI—excluding food and energy prices—rose 0.2% monthly. This slightly slowed from 0.3% the previous month and matched market expectations.

Year-on-year, core US inflation stood at 2.5% in February 2026, the lowest since March 2021, unchanged from January and matching economist projections.