OPENING CALL
Stock futures pointed to a lower open Monday as investors assess the consequences of the joint U.S.-Israeli strikes on Iran over the weekend.
Since the start of the hostilities, fighting has spread to involve Hezbollah in Lebanon and nations across the Persian Gulf have been targeted by retaliatory strikes, fuelling fears of a wider regional conflict.
With oil prices rising and shippers diverting tankers away from the region, investors sought safe-haven assets lifting the dollar and the Swiss franc .
The tech-heavy Nasdaq led blue-chip indexes lower premarket as investors weighed the risk of an inflation shock resulting from the conflict in the Middle East.
"A sustained oil spike could lift inflation expectations and bond yields, pressuring long-duration growth valuations by raising discount rates. That matters for companies like Nvidia, Microsoft, Apple, and Alphabet, whose multiples are sensitive to future revenues and real yields."
The scale and duration of potential disruptions to Middle East oil flows via the Strait of Hormuz remain uncertain , but Goldman Sachs said it still expects Brent crude and WTI to fall to $60 and $56 a barrel by the fourth quarter.
"While the risks to our forecast are skewed to the upside, history suggests that price spikes driven by geopolitical shocks or/and temporary supply disruptions can be short-lived. History shows that oil prices can rise significantly, and well above fair-value estimates when geopolitical uncertainty is high."
The conflict is likely to cause reduced appetite for risky assets due to increased uncertainty, Capital.com said and Goldman Sachs said the tensions are driving substantial upside risks to tanker freight markets, and insurance premiums.
Economic Insight
Beyond geopolitics U.S. jobs data this week will be closely watched as investors seek clues regarding the Federal Reserve's next policy move.
Stocks to Watch
U.S. defense stocks surged as markets reacted to the situation in the Middle East and investors anticipated a prolonged conflict in the region.
American Airlines and United Airlines shares fell 4.9% and 5.7% respectively as the Federal Aviation Administration is looking to cut flights from Chicago's O'Hare International Airport.
Berkshire Hathaway shares fell 1.5% after it said operating profit fell 30%.
ExxonMobil and Occidental Petroleum rose 4.7% and 6.3% respectively as oil prices rose due to the strikes on Iran.
Nvidia shares slipped 1.6% as the company finds itself under pressure from rivals.
Watch For:
U.S. ISM Report on Business Manufacturing PMI for February
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MARKET WRAPS
Forex:
The dollar rose to a five-week high against a basket of currencies amid demand for safe-haven assets.
The euro fell to a five-week low against the dollar and it could fall further as energy prices rose due to the military strikes across the Middle East, ING said.
"Investors have been overweight the euro and European assets on the recovery story this year--a story that will naturally be challenged this week by higher energy prices."
The Swiss franc rose to its highest level against the euro.
The yen weakened against the dollar and SMBC said high oil prices could put further pressure on the Japanese currency.
Bonds:
Treasury yields mostly rose amid the geopolitical escalation in the Middle East.
The 10-year Treasury yield has been below 4% but it is unlikely to stay that low sustainably, Aptus Capital Advisor said.
"The defensiveness of bonds is unlikely to work as it did from 1981-2020, especially starting from a lower point now. Simply the fact that bonds lack the characteristics of being a hedge to stocks, the market should reprice the long end higher by at minimum 50 basis points."
Treasurys and safe-haven currencies are attractive for investors looking at the long term, according to Janus Henderson Investors, which advocates taking a long-term view to investing rather than reacting to near-term volatility.
The movement in global government bond yields has been small so far despite the escalation of the U.S. and Israel's conflict with Iran, Danske Bank said.
Energy:
Crude oil prices rose and Wood Mackenzie said prices could hit $100 a barrel if transit flows through the Strait of Hormuz don't resume quickly.
Oil markets could see a short-lived spike similar to the one during last year's 12-day Israel-Iran conflict, when crude briefly carried a roughly $10-$15-a-barrel risk premium, Capital Economics said.
OPEC+'s decision to increase output by a modest 206,000 barrels a day in April reflects the need to safeguard its limited spare capacity , Kpler said.
Even in the event of major disruptions to LNG flows through the Strait of Hormuz, the impact on U.S. natural-gas prices is expected to be limited , according to Goldman Sachs.
Metals:
Gold prices surged after investors flocked to safe-haven assets after the joint U.S.-Israeli strikes on Iran.
TODAY'S TOP HEADLINES
Airline Stocks Dive as Iran Strikes Suspend Key Corridors
Airlines stocks slumped as the conflict in the Middle East disrupted operations across the region, crippling travel through some of the world's most crowded transit arteries.
The escalation of the regional conflict shuttered airports, sparking one of the most drastic shocks to the industry since the Covid-19 pandemic, with the spillover affecting international carriers.
European Defense Companies Soar on Middle East Conflict
Investors flocked to European defense companies in early trade Monday, as the conflict in the Middle East widens and missile technology comes into focus.
On the third day of the conflict, the U.S. and Israeli militaries continued to strike Iran, while Israel also hit Hezbollah targets in Lebanon. Meanwhile, Iran resumed strikes on Israel and has been targeting airports and other sites in neighboring Gulf countries.
Chinese Automakers' Sales Largely Fail to Gallop Into New Year
Chinese automakers broadly recorded a sharp drop in sales in February as demand in the world's largest auto industry waned during the Lunar New Year month.
Vehicle sales typically slow around the long Spring Festival holiday, which lasted nine days in 2026, but the latest figures also underscore the tough road ahead for Chinese carmakers after years of rapid growth and aggressive expansion in the top electric-vehicle market.
Oil Prices Jump as U.S.-Iran Conflict Stokes Supply Fears
Crude prices surged after the U.S. and Israel launched massive attacks against Iran, raising fears of a wider regional war and prolonged disruption to energy flows through the Strait of Hormuz, the world's most critical oil chokepoint.
In early European trading on Monday, Brent crude climbed 9.4% to $79.70 a barrel after surpassing $82 earlier in the session, while the U.S. gauge West Texas Intermediate rose 7.5% to $71.55 a barrel. European natural-gas prices also jumped, with the most-active front month TTF contract up 22.6% to 39.01 euros a megawatt-hour.
Container Shipping Stocks Jump on Fresh Middle East Tensions
Shares in container shipping companies jumped Monday after the operators were forced to reroute vessels away from the Suez Canal and Strait of Hormuz following U.S. and Israeli strikes on Iran over the weekend.
The conflict has seen shipping groups including A.P. Moller-Maersk, Hapag-Lloyd and CMA CGM divert vessels away from the region and instead send ships on longer voyages around the southern tip of Africa.
Iran Is Shooting at Some of the World's Busiest Airports
Iran has systematically targeted its Arab neighbors' airports since the start of its retaliatory strikes for U.S. and Israeli attacks, hitting commercial hubs as part of a strategy to build pressure to end the war.
With its survival at stake, the Iranian regime is taking aim at the globally connected nerve center of its Gulf neighbors, largely shutting down air travel in a region that depends on it as an economic lifeline. Those countries use their airports for much of their food imports and to fly in their largely expatriate workforces.
Khamenei's Death Leaves Iran at Historic Turning Point-Without a Clear Successor
The death of Supreme Leader Ayatollah Ali Khamenei leaves Iran at a historic precipice, forcing it to navigate a difficult transition while weathering a massive military campaign from the U.S. and Israel and simmering unrest in the streets.
Through his 37 years in power, Khamenei more than any other single individual shaped the course of the modern Middle East. As the spiritual and political leader of the Middle East's second-largest nation, he projected power through Shiite militias across the region and survived waves of unrest as autocrats around him were toppled.
The Iranian Force Built to Defend the Regime Now Faces the Ultimate Test
U.S. and Israeli airstrikes killed many of Iran's top leaders in just hours, including Supreme Leader Ayatollah Ali Khamenei. But the huge security apparatus they oversaw to ensure the regime's survival is still intact.
The Islamic Revolutionary Guard Corps is best known as an armed force of nearly 200,000 paramilitary members. It also functions as a parallel government and economic force whose main mission is defending the Islamic regime formed after the 1979 Revolution and spreading its influence throughout the Middle East.
By Striking Its Neighbors, Iran Has Deepened the Gulf's Resolve to Fight Back
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March 02, 2026 06:14 ET (11:14 GMT)
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