How to trade Wednesday's volatile market
Speakers
Summary
- Oil prices surged 5% to $88 a barrel despite a historic release from the IEA, creating a highly volatile, headline-driven market environment.
- Professional oil traders are stepping back, evidenced by spot crude daily volume dropping from a peak of 1 million contracts back down to lower levels.
- Software valuations have compressed to 16x forward earnings, presenting a rare discount to the broader market multiple.
- AI-driven job cuts are anticipated to be a short-term positive for corporate margins but a medium-term negative for consumer spending power.
Trade Ideas
If something gets ridiculously inexpensive, like a Netflix or Microsoft I've added recently, or Alibaba... I know what the long term story is for them regardless of market and volatility. High-quality tech and e-commerce companies with strong fundamentals can be purchased at a discount during periods of extreme, headline-driven market panic. LONG because the long-term growth trajectory of these specific companies outweighs short-term macroeconomic crosswinds. Prolonged market volatility or a severe recession could cause these stocks to fall further before rebounding.
We're also going to hear more job cuts, substantial job cuts from AI... a interim, medium term negative. So I would stay away from consumer discretionary stocks. As companies implement AI to replace human labor, rising unemployment will reduce aggregate consumer spending power, directly hurting companies reliant on discretionary purchases. AVOID because the medium-term macroeconomic environment will likely pressure consumer-facing revenues. AI job cuts fail to materialize or are offset by new job creation, keeping consumer spending robust.
There's actually some opportunities in duration right now... you look at what's happening in the high grade bond market... the potential for further curve steepening. With policy uncertainty peaking and inflation challenges being met, high-quality fixed income and duration offer a safe haven and capital appreciation potential as the yield curve normalizes. LONG because fixed income provides attractive risk-adjusted returns and diversification during equity market volatility. Inflation re-accelerates, forcing central banks to hold or raise rates, which would negatively impact duration.
The infrastructure AI beneficiary stories at Eaton's at the corners of the world. I think those stories still remain intact. The massive buildout of AI data centers requires significant power management and electrical infrastructure, providing a secular tailwind for industrial suppliers regardless of broader market cycles. LONG because the physical infrastructure demands of AI provide highly visible, long-term revenue streams. A slowdown in hyperscaler capital expenditures could reduce demand for power infrastructure components.
Software now trading at 16 times forward, which is below a market multiple. I think there will be opportunities there as well because I think there's a harmonious play with AI. Software stocks have derated to attractive valuation levels, creating a compelling entry point for a sector that will directly benefit from AI integration and software-on-demand models. LONG because buying a high-margin, AI-adjacent sector at a discount to the broader market offers a strong margin of safety. Enterprise IT budgets contract due to economic uncertainty, leading to earnings downgrades that justify the lower multiple.
I own Valero, I own Phillips 66. I own Marathon... I have EQT... If you're now in the moment and you're trying to race to catch it, you're not going to... professional oil traders are doing exactly what I'm suggesting... stepping back. While energy stocks were a great defensive rotation previously, the current oil market is driven by unpredictable geopolitical headlines, making new entries too risky and akin to chasing past performance. NEUTRAL because the risk/reward for initiating new positions in energy is poor amid dizzying, headline-driven volatility. Geopolitical conflicts escalate significantly, causing a sustained spike in oil prices that leaves sidelined investors missing out on massive gains.
Up Next
This CNBC video, published March 11, 2026, features Steve Weiss, Shannon Saccocia, Jason Snipe, Joe Terranova discussing NFLX, MSFT, BABA, XLY, TLT, LQD, ETN, IGV, PSX, VLO, MPC, EQT. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Steve Weiss, Shannon Saccocia, Jason Snipe, Joe Terranova · Tickers: NFLX, MSFT, BABA, XLY, TLT, LQD, ETN, IGV, PSX, VLO, MPC, EQT