March S&P 500 E-Mini futures (ESH26) are down -1.08%, and March Nasdaq 100 E-Mini futures (NQH26) are down -1.12% this morning, pointing to further losses on Wall Street as the escalating Middle East conflict triggered fresh turmoil in energy markets.

The price of WTI crude climbed above $100 a barrel for the first time since 2022 after Middle Eastern producers began cutting output over the weekend and traffic through the Strait of Hormuz was effectively halted. Oil pared some of its earlier advance, while stock index futures clawed back some of the session’s worst losses after the Financial Times reported that G7 finance ministers would meet to discuss releasing strategic reserves. However, the jump was enough to intensify concerns of an inflation shock, pushing the 10-year T-note yield up four basis points to 4.18%.

The U.S. and Iran appeared to be bracing for what could become a prolonged conflict. Iran named the son of the late Ayatollah Ali Khamenei as its new supreme leader, while President Trump said higher oil prices were a “very small price to pay” for safety and peace.

Beyond the Middle East conflict, investors are looking ahead to a pair of U.S. inflation reports and earnings reports from several high-profile companies this week.

In Friday’s trading session, Wall Street’s major equity averages closed sharply lower. The Magnificent Seven stocks fell, with Meta Platforms (META) and Tesla (TSLA) dropping over -2%. Also, chip stocks sank after Oracle and OpenAI reportedly abandoned plans to expand an AI data center in Texas, with Lam Research (LRCX) slumping more than -7% and Micron Technology (MU) sliding over -6%. In addition, financial stocks plunged, weighed down by a more than -7% drop in BlackRock (BLK) after it curbed withdrawals from a private-credit fund. On the bullish side, Marvell Technology (MRVL) jumped over +18% and was the top percentage gainer on the Nasdaq 100 after the chipmaker posted upbeat Q4 results and issued solid Q1 guidance.

The U.S. Labor Department’s report on Friday showed that nonfarm payrolls unexpectedly fell by -92K in February, weaker than expectations of +58K. Also, the U.S. February unemployment rate unexpectedly rose to 4.4%, weaker than expectations of 4.3%. In addition, U.S. retail sales fell -0.2% m/m in January, stronger than expectations of -0.3% m/m, while core retail sales, which exclude motor vehicles and parts, were unchanged m/m, weaker than expectations of +0.1% m/m. At the same time, U.S. February average hourly earnings rose +0.4% m/m and +3.8% y/y, stronger than expectations of +0.3% m/m and +3.7% y/y.

“[Friday’s jobs] numbers may have put the Fed between a rock and a hard place,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. “Significant weakening in the labor market would support a rate cut, but given the risk that higher-for-longer oil prices could trigger another inflation surge, the Fed may feel compelled to remain on the sidelines.” 

Chicago Fed President Austan Goolsbee described the jobs report as a “tough miss” and cautioned that economic shocks such as the recent spike in oil prices could lead in a stagflationary direction. Also, San Francisco Fed President Mary Daly said, “The hopes that the labor market was steadying, maybe that was too much, and we really have to keep our eye on the labor market.”

Fed Governor Christopher Waller said that he does not expect the Iran conflict to have a sustained impact on inflation. “For us thinking about policy going forward, this is unlikely to cause sustained inflation,” Waller said. 

Boston Fed President Susan Collins and Cleveland Fed President Beth Hammack both said they still believe rates should remain on hold for “some time.”

Meanwhile, U.S. rate futures have priced in a 97.4% probability of no rate change and a 2.6% chance of a 25 basis point rate cut at the March FOMC meeting.

This week, investors will be closely monitoring a pair of U.S. inflation reports: February’s Consumer Price Index and January’s core personal consumption expenditures price index, the Fed’s preferred inflation gauge. These reports cover periods before the U.S. and Israel launched a bombing campaign against Iran, which triggered a spike in oil prices and, in turn, fueled inflation concerns. Any indication that inflation was already elevated before the Middle East conflict would further heighten those concerns. JOLTs Job Openings data for January will provide additional insight into labor demand, while the University of Michigan’s preliminary March consumer sentiment index will give a fresh reading on how Americans perceive the impact of the Middle East conflict on their finances. Other noteworthy data releases include GDP (second estimate), Initial Jobless Claims, Existing Home Sales, Trade Balance, Building Permits (preliminary), Housing Starts, Durable Goods Orders, Core Durable Goods Orders, Personal Spending, and Personal Income.

Market participants will also focus on earnings reports from several notable companies, with Oracle (ORCL), Adobe (ADBE), Hewlett Packard Enterprise (HPE), Dollar General (DG), Ulta Beauty (ULTA), and Lennar (LEN) scheduled to release their quarterly results this week.

U.S. central bankers are in a media blackout period before the March 17-18 policy meeting, so they are prohibited from making public comments on the economic outlook or policy this week. Fed policy limits the extent to which FOMC participants and staff can speak publicly or grant interviews during Fed blackout periods.

The U.S. economic data slate is largely empty on Monday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.176%, up +1.04%.

The Euro Stoxx 50 Index is down -1.78% this morning as investors prepare for deeper economic fallout from the Middle East conflict. Mining, bank, industrial, and technology stocks tumbled on Monday. Data released on Monday showed that German factory orders slumped in January, while industrial production also declined, pointing to a fragile outlook for the country’s industrial sector despite the rollout of government stimulus. Meanwhile, the region’s government bonds sold off sharply on Monday as an intensifying energy-price shock stoked concerns about inflation. Traders priced in 50 basis points of European Central Bank rate hikes this year and more than a 50% probability of an increase by the Bank of England. Investors this week will focus on final February inflation data from Germany, France, and Spain, along with remarks from European Central Bank Executive Board member Isabel Schnabel and Vice President Luis de Guindos. In corporate news, Roche Holding AG (ROG.Z.IX) slid over -4% after the company said a late-stage trial of an experimental breast cancer treatment failed to meet its primary endpoint.

Germany’s Factory Orders, Germany’s Industrial Production, and Eurozone’s Sentix Investor Confidence Index were released today.

The German January Factory Orders fell -11.1% m/m, weaker than expectations of -4.2% m/m.

The German January Industrial Production fell -0.5% m/m, weaker than expectations of +1.0% m/m.

The Eurozone March Sentix Investor Confidence Index came in at -3.1, in line with expectations.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.67%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -5.20%.

China’s Shanghai Composite Index closed lower today, tracking a regional selloff amid the escalating Middle East conflict. Sentiment was also dampened by reports that a summit this month between U.S. President Donald Trump and China’s Xi Jinping was unlikely to yield a breakthrough in bilateral relations. Semiconductor and airline stocks plunged on Monday. At the same time, software stocks rallied after local government agencies joined tech giants such as Tencent Holdings in backing viral AI software OpenClaw. Also, resource-linked stocks such as energy, coal, and cement advanced. Positive inflation data from the country also helped limit losses in the benchmark index. The National Bureau of Statistics said on Monday that China’s consumer inflation picked up to its highest level in more than three years in February, aided by a boost from the Lunar New Year holiday, while factory-gate deflation eased further. Lynn Song, chief economist for Greater China at ING Bank, said, “There’s further inflationary pressure likely ahead in March thanks to the surge in oil prices. Unless the oil price shock is notably stronger and longer than expected, inflation is unlikely to inhibit PBOC easing this year.” Investor attention now turns to China’s January-February trade data, which will offer insight into how resilient exports remain amid a more uncertain global backdrop. DBS economists expect export growth to have picked up, with shipping activity remaining robust, supported by stronger trade flows outside the U.S.

The Chinese February CPI rose +1.3% y/y, stronger than expectations of +0.9% y/y.

The Chinese February PPI fell -0.9% y/y, stronger than expectations of -1.1% y/y.

Japan’s Nikkei 225 Stock Index closed sharply lower and hit a 1-month low today as oil prices climbed above $100 a barrel for the first time since 2022, stoking concerns about inflation and an economic slowdown. Japan imports roughly 90% of its oil from the Middle East, leaving its economy especially vulnerable to price surges and supply disruptions. Japan is “among the most affected countries globally” by surging oil prices, making its equities look particularly risky, according to Hiroshi Matsumoto, a senior client portfolio manager at Pictet Asset Management Japan. The Nikkei posted its largest daily percentage drop since April 2025. Notably, the benchmark index has fallen more than -10% from its late-February record high, entering technical correction territory. Chip stocks were among the biggest losers on Monday as the escalating Middle East conflict fueled worries over rising raw-material costs for chipmaking and the pace of AI expansion. Economically sensitive bank stocks were also hit hard. Meanwhile, Japanese government bonds slumped amid a global bond selloff, and the yen slid to its weakest level against the dollar since January. On the economic front, data showed on Monday that Japan’s real wages rose in January for the first time in 13 months as inflation eased. Real wages, a key gauge of consumer purchasing power, increased 1.4% in January from a year earlier, recovering from a 0.1% drop in December. Investor focus now shifts to Japan’s final fourth-quarter GDP figures due on Tuesday, where an upward revision is widely expected on the back of stronger capital spending. In corporate news, Japan Display soared more than +92% after Nikkei Asia reported that the Japanese government had approached the company about running a plant to be built under Japan’s pledged $550 billion investment in the U.S. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +38.86% to 57.00.

The Japanese January Current Account n.s.a. stood at 0.942 trillion yen, weaker than expectations of 0.96 trillion yen.

The Japanese January Leading Index stood at 112.4, weaker than expectations of 113.0.

The Japanese February Economy Watchers Current Index came in at 48.9, stronger than expectations of 48.1.

Pre-Market U.S. Stock Movers

The Magnificent Seven stocks fell in pre-market trading, with Alphabet (GOOGL), Amazon.com (AMZN), and Meta Platforms (META) sliding over -1%.

Chip stocks are moving lower in pre-market trading, with Marvell Technology (MRVL) falling over -3% and Lam Research (LRCX) dropping more than -1%.

Airline stocks slid in pre-market trading amid a surge in oil prices, with United Airlines (UAL) and American Airlines (AAL) falling over -3%.

Hims & Hers Health (HIMS) jumped more than +52% in pre-market trading after Bloomberg reported that Novo Nordisk plans to sell its weight-loss drugs on the company’s platform.

Energy stocks advanced in pre-market trading, with the price of WTI crude up more than +13%. APA Corp. (APA) and Diamondback Energy (FANG) are up over +2%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - March 9th

Hewlett Packard Enterprise Company (HPE), Casey’s General Stores (CASY), Vail Resorts (MTN), BETA Technologies (BETA), Korn Ferry (KFY), Global Business Travel Group (GBTG), Nayax (NYAX), Galecto (GLTO), Voyager Technologies (VOYG), Sharplink (SBET), BitVentures (BVC), ARS Pharmaceuticals (SPRY), Heritage Insurance Holdings (HRTG), Yext, Inc. (YEXT), Kronos Worldwide (KRO), Unusual Machines (UMAC), Zevra Therapeutics (ZVRA), Greenlight Capital Re (GLRE), NET Power (NPWR), Genie Energy (GNE), ACCO Brands (ACCO), FuelCell Energy (FCEL), Protara Therapeutics (TARA), XOMA Royalty (XOMA), NL Industries (NL), 3D Systems (DDD), Coherus Oncology (CHRS), Repay Holdings (RPAY), Amplify Energy (AMPY), RideNow Group (RDNW), FreightCar America (RAIL), Tenaya Therapeutics (TNYA), Stereotaxis (STXS), LifeMD (LFMD), Arq, Inc. (ARQ), Gossamer Bio (GOSS), Fluent (FLNT).

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