Recent reports indicate that Lebanon's Hezbollah issued a statement early on March 10 local time, announcing that it launched missiles at an Israeli military factory in Safad on the evening of March 9 in response to Israeli attacks on dozens of Lebanese towns. According to CCTV International, Israel stated that its air force carried out airstrikes in the early hours of March 10 targeting Tehran, the capital of Iran, including a local nuclear laboratory.
On March 9, Russian President Vladimir Putin chaired a meeting at the Kremlin, addressing energy transport security, market trends, and strategic adjustments. Putin emphasized Russia's willingness to cooperate with European nations on oil and gas supplies but stressed that Europe must send clear signals demonstrating a commitment to stability in such cooperation.
Goldman Sachs noted that conflict involving Iran could trigger historic energy risks, shifting its tactical view on equities to neutral while favoring an overweight position in cash. Meanwhile, former PIMCO CEO Mohamed El-Erian predicted on Monday, March 9, that the average inflation rate in 2026 would reach 3%, up from last year's average of 2.6%.
Although U.S. stocks rebounded sharply overnight, U.S. stock futures fell across the board during Asia-Pacific trading hours.
Lebanon's Hezbollah launched attacks in response to Israeli strikes on multiple towns. Additionally, Hezbollah targeted several Israeli settlements and military gathering points. The Israeli Defense Forces responded by striking missile launch sites in Lebanon.
Hezbollah, established in 1982 with Iranian support, is a Shiite political and military organization and currently Lebanon's largest political party.
Putin warned that oil production reliant on transit through the Strait of Hormuz could soon face complete disruption. He stated that attempts to destabilize the Middle East would lead to rising oil and gas prices, with supply disruptions impacting the global economic system. However, Putin suggested that price increases might be temporary and urged Russia to pivot toward new markets rather than wait for Europe to shut the door on energy cooperation.
Europe's energy market is now in a state of emergency. Following U.S. and Israeli airstrikes on Iran, Brent crude surged to $119.5 per barrel before retreating. European natural gas prices also experienced sharp fluctuations, with UK monthly gas prices briefly rising nearly 20%. UK natural gas reserves have fallen to less than two days of supply, raising concerns over potential disruptions.
Goldman Sachs adjusted its three-month equity rating to tactically neutral, citing risks of an energy shock comparable to the 1970s. If oil flows through the Strait of Hormuz remain low throughout March, oil prices could exceed peaks seen in 2008 and 2022.
Mohamed El-Erian projected that 2026 inflation would average 3%, well above the Fed’s 2% target, limiting the central bank’s ability to support the labor market. Former Bank of America Securities chief economist Ethan Harris suggested the Fed would monitor whether businesses pass higher energy costs to consumers and whether consumer confidence declines sharply, as seen during the 1990 Gulf War.
J.P. Morgan’s chief U.S. economist Michael Feroli argued that sustained high oil prices would eventually lead the Fed to cut rates as economic growth slows and consumer demand weakens. However, given prolonged above-target inflation, the Fed may be slower to adopt a dovish stance.
Citigroup’s chief U.S. economist Andrew Hollenhorst maintained a baseline forecast of 75 basis points in rate cuts this year, contingent on oil price trends. Morgan Stanley’s Michael Gapen suggested that U.S. actions against Iran and their impact on commodity prices could delay expected Fed rate cuts.