Weekly Pricing Pulse: Conflict Spooks Markets, Sending Commodity Prices Higher

• The Material Price Index (MPI) by S&P Global Market Intelligence increased by 2.1% last week, a second consecutive weekly rise.
• The increase was broad, with eight of the ten subcomponents rising.
• Energy markets again drove prices higher, with the subindex increasing by 5.7%. 
• Market sentiment is uncertain, but the risk has firmly moved to the upside.

All eyes were on the Middle East last week as the conflict between Israel and Iran developed, but markets have yet to blink. The S&P 500 declined by less than 0.2% and while Treasury yields drifted lower and the dollar higher, they remain close to week-before levels.

Iran’s response will determine the trajectory of global markets, but the range of potential responses is wide. The Federal Open Market Committee (FOMC) announced no change to the federal funds rate target range, as expected. This reflects their view that the US economy is in good shape, while maintaining a great deal of uncertainty in the outlook.

Market sentiment is uncertain, but the risk has firmly moved to the upside. Oil prices could soar or sink based on geopolitical developments, and the expiration of the US’s 90-day pause on retaliatory tariffs is soon approaching, with no clear path forward. Both of these factors create significant upward price risk in commodity markets in the near term.

The Material Price Index (MPI) by S&P Global Market Intelligence increased by 2.1% last week, a second consecutive weekly rise. The increase was broad, with eight of the ten subcomponents rising. The MPI is approximately 8.2% lower than it was the same week a year ago, indicating a general easing in commodity prices over the past 12 months.

Energy markets again drove prices higher, with the subindex increasing by 5.7%. Oil prices rose by more than 9% with Brent crude – the international benchmark – rising to a $77/barrel weekly average, the highest since January 2025. This rise was due to escalating conflict in the Middle East. 

The pricing effects of this will be seen in the coming week. Notably, Iranian oil production and export infrastructure has been largely unaffected, limiting the extent of pricing increases thus far.

Semiconductor memory prices rose 27% last week, following 10% increases the previous two weeks. This marks the subindex’s highest point since March 2022. This comes as the DDR4 type memory chips are being phased out by major memory producers, causing a surge in demand ahead of that. Additionally, AI led demand for high-bandwidth memory products is contributing to market tightness.

—By Gregory Muller

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.