Should we start with the bad news, or the other bad news?

We’re finally getting a fuller picture of how the broader economy is faring amid the war with Iran, AI fears, and a slowing labor market…and it’s not a pretty one.

Today, the Organization for Economic Coordination and Development said in its latest outlook that not only is the war with Iran kneecapping global economic growth, it’s also reviving inflation. The OECD upped its forecast for the average headline inflation rate of the G20 economies in 2026 to 4%, higher than its prior projection of 2.8% back in December. The US-specific forecast was even bleaker: Domestic headline inflation will reach 4.2% this year, up 1.2% from the last forecast.

While the organization’s projected global growth rate for 2026 is still 2.9%, the same as its December projection, it’s a slowdown from the 3.3% growth rate in 2025. The OECD also predicted US economic growth will slow to 1.7% in 2027, down from the 1.9% it forecast in December.

“The breadth and duration of the conflict are very uncertain, but a prolonged period of higher energy prices will add markedly to business costs and raise consumer price inflation, with adverse consequences for growth,” the Paris-based organization said in the report. However, it also expects most of the inflationary pressure to recede by the end of 2027.

It’s probably no coincidence that, at the same time, major Wall Street banks are recalibrating their recession odds:

• Goldman Sachs just raised its recession probability within the next year to 30%
• Meanwhile, EY Parthenon upped its odds to 40%
• Wilmington Trust says there’s a 45% chance
• Moody’s Analytics raised its own outlook to 48.6%

“The magnitude and duration of flow disruptions through the Strait of Hormuz and the risk of growing damage to oil production, refining capacity, LNG fields, and liquefaction infrastructure suggest a more persistent inflationary impulse, extending beyond a short-lived energy price spike,” explained EY-Parthenon Chief Economist Gregory Daco in a note.

Retailers may tack on a few bucks

Big banks and economists aren’t the only ones rethinking their approach.

Retailers like H&M are considering increasing their prices if the Iran war continues to be protracted. British retailer Next blamed more expensive transportation due to the oil shock, arguing that higher freight and energy prices will cost the company about $20 million in the near term, which may eventually be passed on to consumers.

Time to get your summer wardrobe together ASAP.—LB

🟢 What’s up

• Olaplex surged 51.13% after Germany’s Henkel agreed to acquire the beauty company in a $1.4 billion deal.
• Jack Daniel’s maker Brown-Forman climbed 9.75% on reports Pernod Ricard is exploring a potential takeover.
• Best Buy gained 4.65% amid speculation GameStop could acquire the big box retailer.
• Travel agency Navan jumped 43.28% following strong earnings and upbeat 2027 revenue guidance.
• Kodiak Sciences soared 74.77% after the biotech company revealed strong trial results for its diabetic retinopathy treatment.
• Avis Budget Group popped 12.97% and Hertz Global gained 9.15% as disgruntled customers are canceling their flights and just renting a car to travel instead.

What’s down

• Meta Platforms fell 7.92% and Alphabet sank 3.06% after the Mag 7 giants lost some major legal cases this week.
• AppLovin dropped 10.41% as weakening e-commerce spending and client churn weighed on growth.
• Pony AI declined 14.66% with revenue down 18% year over year, reflecting mixed quarterly results.
• Snap slid 10.69% after the EU opened an investigation into child safety and illegal activity on the platform.
• Furniture maker MillerKnoll sank 22.37% after issuing a weak outlook tied to fuel costs and Middle East shipping challenges.
• Worthington Steel fell 14.91% despite solid revenue growth, as margins came under pressure from tariffs and macro headwinds.
• Microsoft fell 1.37% as UBS cut its price target on weak 365 Copilot adoption, putting shares on pace for their worst six-month stretch since 2009.

Wall Street bankers can finally afford that third Patek Philippe watch they’ve been eyeing.

The New York State Comptroller—aka, the guy in charge of money in New York—revealed today that the total pool for Wall Street bonus payouts climbed to $49.2 billion last year, its highest level since 1987. That means the average annual bonus for a Wall Streeter rose to $246,600, a 6% increase (up about $15,000) from 2024.

Clearly, it was a very good year for your college buddy who now wears nothing but a Patagonia vest and deal sleds. Bankers benefitted from a surge in mergers and acquisitions, as well as record trading revenue as investors sought to profit from market volatility. The six largest banks in the US raked in a combined $593 billion in revenue in 2025, 6% higher than the year before, and in their earnings reports earlier this year all the big banks expressed optimism that this year will be more of the same.

That should lead to even bigger bonuses next year, and honestly we’re happy for Wall Street—they really needed the win.—MR

The AI playbook might be getting a rewrite.

On Tuesday, Google introduced TurboQuant, a compression technique the company says can reduce the memory required to run large language models by up to sixfold, significantly improving AI efficiency.

That’s pretty bad news for memory stocks, which had surged on booming AI demand from companies like Google, OpenAI, and Anthropic: Samsung rallied nearly 200% over the past year, while Micron and SK Hynix each climbed more than 300%. But if models require less memory, investors are suddenly worried that demand for high-bandwidth chips could soften.

That has sent these once high-flying stocks tumbling over the last five days: SanDisk dropped 21.73%, Western Digital fell 11.95%, SK Hynix declined 8.80%, and Samsung slid 10.84%.

Micron in focus

Micron, in many ways the poster child for the memory stock boom, has also been making headlines. The company recently posted blowout earnings, with sales surging 196% year over year, adjusted EPS jumping 682%, and margins expanding from 36.8% a year ago to 75%. But the stock still sold off last week, and shares fell another 6.94% this afternoon.

One of the key reasons for the decline is that investors are worried the traditionally cyclical memory market is nearing a peak, prompting profit-taking as pricing power and margins reach elevated levels. Another is the supply-demand imbalance: surging demand has outpaced supply, pushing Micron to ramp capex to $25 billion in FY2026, well above expectations, and raising fears of future oversupply.

A new playbook

From today’s market reaction, it’s clear that investors are feeling jittery about the memory industry. But analysts have a different view—in fact, while Micron has sunk 19.50% over the last week, it saw near-unanimous price target upgrades following its latest earnings report.

Wall Street says this time is different. In addition to a structural shift in demand driven by AI that is more durable, they say the industry is no longer purely cyclical, where supply inevitably floods the market. Cantor Fitzgerald’s CJ Muse went even further, saying undersupply could worsen into 2027, with earnings power continuing to rise.

As for concerns that Google’s breakthrough could reduce memory demand, analysts say making AI cheaper and more efficient could drive broader adoption, ultimately increasing total demand for memory chips. Morgan Stanley analyst Joseph Moore pointed out that Google’s improvements won’t significantly reduce the need for memory chips, since the underlying hardware still requires a fixed amount of memory.

So, while it’s easy to trade on headlines, it might be worth digging deeper—and listening to what the pros are saying.—SY

• Kalshi traders say there’s an 82% chance Elon Musk becomes a trillionaire before 2027.
• Fannie Mae is now accepting crypto-backed mortgages.
• There have been a slew of suspiciously well-timed trades tied to President Trump’s policy decisions, particularly his decision to pause attacks against Iran.
• Christmas in March: Trump says Iran let 10 oil ships through the Strait of Hormuz as a “present.”
• Charles Schwab is the latest brokerage to roll out investment accounts targeted at teens.
• We’re about to get a whole new group of GLP-1 drugs that could reshape the weight loss market once again. Take a look at what’s coming next.

Economic reports: The preliminary consumer sentiment reading this month was conducted before the war in Iran began. Tomorrow’s final reading for March will include the entire month, and the war in its entirety, so expect a lot less optimism.

Earnings announcements: Carnival Corp. and TMC The Metals Company

Everything else: Today is opening day of the MLB season, which means that by tomorrow the Mets will be out of playoff contention.