Inflation’s Long Tail

AI and energy could keep inflation elevated for decades, IFM warns.

Author

Ankit Sinha
March 26, 2026

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Market Snapshot

Market News

Markets Rally on “Maybe Peace”

Stocks and bonds climbed while oil slipped as investors assessed the likelihood of a U.S.–Iran ceasefire, sending markets through another round of volatile swings.

The S&P 500 rose for the second time this week, with optimism over diplomatic talks outweighing reports that Iran rejected a truce proposal and continued military strikes. Brent crude settled near $102 a barrel, while Treasuries recovered some of their March losses and gold edged higher.

President Donald Trump has pushed for negotiations to end the nearly four-week conflict, with the White House saying the U.S. held productive talks with Iran over the past three days.

The proposed framework reportedly calls for Iran to dismantle key nuclear facilities and limit its missile arsenal to defensive use. However, Tehran signaled little willingness to compromise, demanding guarantees against future attacks, reparations for damages, and recognition of its authority over the Strait of Hormuz.

Despite the uncertainty, equity markets have shown resilience. Analysts now expect S&P 500 earnings to grow 11.9% year-over-year in the first quarter, up from a prior estimate of 10.9%, suggesting investors remain focused on corporate fundamentals and the AI-driven growth cycle.

Peel Take: Markets are trading on the hope of diplomacy rather than the reality of it. As long as ceasefire talks stay alive, investors appear willing to look past geopolitics and lean into earnings momentum, but any setback could quickly bring volatility back to center stage.

What's Ripe

Arm Holdings PLC ADR (ARM) 16.4%

  • ARM surged 16% after Arm outlined ambitious long-term revenue targets tied to its expansion into the data-center chip market. The stock initially fell earlier in the day when the strategy was first revealed, but investor sentiment flipped in after-hours trading as the company highlighted strong growth expectations.

  • Peel Take: Arm’s pivot toward data-center chips signals a bigger play in the AI infrastructure boom. If the company meets its aggressive targets, it could capture a larger share of the lucrative server chip market, dominated by heavyweights like Nvidia and AMD.

Chewy Inc. (CHWY) 13.3%

  • CHWY shares spiked 13% after the online pet-supplies retailer issued stronger-than-expected sales guidance, forecasting $13.6 billion to $13.75 billion in revenue for the coming year. The outlook topped analysts’ projections of $13.58 billion, boosting investor confidence in the company’s growth trajectory.

  • Peel Take: Even in a tighter consumer environment, spending on pets remains surprisingly resilient, suggesting the “pets are family” economy is still very much alive.

What's Rotten

KB Home (KBH) 1.6%

  • KBH shares fell 1.6% after the homebuilder cut its full-year guidance, citing rising uncertainty in the housing market tied to escalating tensions in the Middle East.

  • Peel Take: Geopolitics isn’t just moving oil; it’s also rattling housing sentiment, as higher uncertainty could weigh on mortgage demand and new home purchases.

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📊The Daily Poll

Can AI and energy keep inflation structurally high long term?

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Previous Poll:

What is the bigger threat to the UK economy right now?

Energy shock: 57.8% // Higher rates: 26.7% // Weak demand: 6.6% // Policy lag: 8.9%

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Banana Brain Teaser

Previous

When positive integer x is divided by positive integer y, the remainder is 9. If x/y = 96.12, what is the value of y?

Answer: 75

Today

A store reported total sales of $385 million for February of this year. If the total sales for the same month last year were $320 million, approximately what was the percent increase in sales?

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