ORLANDO, Florida, March 9 - Stock markets in Asia and Europe opened the week with deep losses as the Iran conflict continued into its second week and oil prices spiked, climbing as much as 30% above $100 a barrel. The picture shifted in New York, however, when U.S. equities recovered from morning declines and closed between 0.5% and 1.4% higher after President Donald Trump suggested the war might soon be over. Oil subsequently eased from earlier extremes.
Today's market action underlines a striking divergence: selling pressure has propagated through multiple overseas equity markets, yet the broad U.S. indices showed resilience and even finished the day in positive territory. That resilience raises questions about whether the U.S. market's composure reflects sound fundamentals or complacency.
Further reading I recommend:
- Trump says war against Iran is 'very complete,' CBS News reports
- Iran hardliners rally behind new leader, unsettling global markets
- Middle East conflict sticks 2026 consensus trades into reverse
- Back to the 1970s? Investors brace for a return of stagflation
- Compounding errors and narrow self-interest threaten global fuel crisis: Russell
Today's key market moves
- Stocks: Asian markets were hammered and European bourses tumbled, but major U.S. indices recovered from early selling to end the day up between 0.5% and 1.4%.
- Sectors/shares: Nine S&P 500 sectors finished higher, led by technology at +1.6%. Energy fell about 1%. Notable movers included Caterpillar +3.5%, Nvidia +2.7%, Amgen +2%; while Cisco -3%, Boeing -2.6% and IBM -2% lagged.
- FX: The dollar strengthened early but reversed late in the U.S. session. Emerging-market currencies rebounded, with the Brazilian real and South African rand each up about 1.5%. Bitcoin rose roughly 3%.
- Bonds: U.S. Treasuries showed mixed moves and the curve bull-flattened. Eurozone sovereign bonds rallied while UK gilts sold off.
- Commodities/metals: Oil settled with gains of roughly 4-7% after intraday moves that saw prices spike as much as 30% and then fall about 7% in post-settlement trading. Gold dipped, while other precious metals climbed 2-3%.
Talking points
Central bank paralysis
The dramatic rise in oil since the joint U.S.-Israel attack on Iran on February 28 has intensified a dilemma for central banks. Higher energy costs are feeding price pressure, even as the hit to economic activity from $100-a-barrel crude could be severe. Policymakers face a stark choice: tighten further to rein in inflation or pivot to a more dovish stance to protect employment and growth as the risk of higher unemployment and recession increases. In the United States, the labor market was already showing strains, household savings have been depleted, and consumers now face sharply higher gasoline costs. Either higher rates or higher inflation will weigh on household finances.
Pre-war price pressures
Price pressures were building before the Middle East hostilities began. New data released on Monday showed consumer inflation in China rose in February to its highest level in three years. Mexico’s inflation has moved above its central bank’s target, and Japan recorded a rise in real wages for the first time in 13 months. With oil surging through $100 a barrel and now considerably higher year-over-year, inflation indicators in many economies are pointing upward. U.S. personal consumption expenditures (PCE) inflation data for February, due later this week, are expected to continue that pattern and rise further above 3%.
To tap or not to tap?
Governments and policymakers are scrambling for ways to blunt the economic shock from $100 oil. Releasing strategic petroleum reserves is an option under consideration, but it did not appear set to be used immediately. G7 officials discussed the possibility on Monday but judged there was no immediate supply shortfall. Other measures are being considered: China has capped fuel prices, South Korea is weighing a fuel-price intervention for the first time in three decades, and Japan is preparing for a possible crude release and could draw on budgeted cash reserves for emergency spending. Given the reluctance among authorities to tighten policy further, fiscal or administrative measures may be needed to soften the blow.
Events that could move markets tomorrow
- Developments in the Middle East
- Energy market moves
- Australia business confidence (February)
- Japan GDP (Q4, revised)
- Japan household spending (January)
- Germany trade (January)
- UK BRC retail sales (February)
- U.S. Treasury sale of $58 billion of 3-year notes at auction
- U.S. existing home sales (February)
The market session highlighted how geopolitical shocks can produce sharp intraday swings: crude surged, global equities largely sold off, and then U.S. stocks rallied late in response to comments that the conflict could end soon. Policymakers and market participants will be watching energy markets and inflation readings closely in the days ahead.