MARKET WRAPS
Watch For:
Eurozone inflation; trading updates from Aberdeen, Thales, Beiersdorf, Fresnillo, ASM International
Opening Call:
European stock futures traded lower early Tuesday. Asian stock benchmarks declined; the dollar gained; Treasury yields rose; while oil and gold futures gained.
Equities:
Stock futures point to a lower open in Europe on Tuesday, extending the prior session's losses. U.S. attacks on Iran are projected to last four or five weeks but could go longer, President Trump said Monday.
"Markets are transitioning from a traditional risk-off response to the Middle East conflict toward a stagflationary scenario, where rising energy prices outweigh safe-haven demand for bonds," Commerzbank said.
Yet, risk assets still appear attractive over the next 12 months, said Fullerton Fund Management. While there is higher near-term risk aversion, the shocks from higher oil prices will likely be short-lived.
Investors have also adapted to navigating higher threat levels for some time now, Fullerton added.
Forex:
While the S&P 500's recovery and the retracement of oil prices suggest a sigh of relief for currencies Tuesday, DBS Group Research's Philip Wee's said the "calm is fragile."
"We are essentially in a holding pattern where technical stability masks a highly fluid and unpredictable geopolitical reality,"Wee said.
Bonds:
Middle Eastern sovereign ratings usually have enough headroom to weather a short regional conflict but it is unclear what course the current Iran situation will take, Fitch Ratings said. The U.S.-Israeli attacks on Iran have already had a greater impact than those of June 2025.
Material damage to energy export infrastructure would be the most likely channel to pressure sovereign ratings, though Fitch's baseline is that this won't happen and that the conflict will last less than a month.
However, Fitch stresses that the base case is subject to particularly high uncertainty. A more prolonged disruption to energy exports than it foresees would risk more severe repercussions for sovereign credit profiles, while the impact of Iran's political stability also remains unclear.
Energy:
Oil advanced early Tuesday as the ongoing Middle East conflict keeps supply disruption risks elevated.
"The ongoing military conflict between the United States/Israel and Iran has sent shockwaves through global energy markets," Vontobel's Kerstin Hottner said. "As the situation unfolds, the duration and intensity of the conflict will be key factors shaping the energy landscape in the near term," Hottner added.
Metals:
Precious metals are benefiting from demand as a perceived haven due to the Iran conflict, while industrial metals are balancing supply-chain risk against macroeconomic headwinds, said CreditSights. It expects elevated near-term volatility as markets assess the probability of shipping disruptions and sustained energy price shocks.
"Medium-term price direction will depend on whether geopolitical tensions translate into material physical supply constraints or whether the dominant effect becomes slower global industrial activity driven by higher energy costs," CreditSights said.
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Aluminum prices could remain near $3,300/metric ton in the coming weeks, according to BMI, a unit of Fitch Solutions. That is on the basis that conflict in the Middle East continues for two or three weeks.
"However, any further material escalation would amplify supply-side pressures and present significant upside risk," BMI said. That's because the aluminum market is already expected to be in deficit in 2026.
A deterioration in conditions could push prices toward $3,500/ton. In the event of a "prolonged, large-scale campaign and a partial or extended closure of the Strait of Hormuz, prices could climb towards $3,700/ton," BMI said.
TODAY'S TOP HEADLINES
Trump Sees Weekslong War Timeline in Iran
U.S. attacks on Iran are projected to last four or five weeks but could go longer, President Trump said on Monday as he and other officials offered new rationales for the strikes conducted with Israel since Saturday.
"This was our last best chance to strike," Trump said, speaking from the White House's East Room.
A Market Frenzy Is Lurking Beneath Those Calm Stock Indexes
The S&P 500 is clinging to an unremarkable yearly gain, up less than 1% in 2026. But at the single-stock level, swings have been violent.
Microsoft has slumped 18% this year, shedding well over half a trillion dollars in market value. TurboTax maker Intuit has lost 37%. Shares of the memory-chip manufacturer Sandisk have nearly tripled, meanwhile, while Texas Pacific Land, a real-estate company that has become a data-center play, is up 85%.
Bonds log biggest selloff in 9 months as Iran conflict sparks unusual Treasury moves
Investors reacted to the third day of the Iran conflict by dumping U.S. government bonds as oil prices spiked and Middle East hostilities stoked fears of an inflation resurgence.
Rapidly rising bond yields tend to unleash havoc on Wall Street. They can derail the stock market SPX, send a chill through capital markets and raise borrowing costs for households and businesses.
Iran Conflict Delays Shipping's Return to Suez Canal, Hapag-Lloyd Says
The Middle East conflict has significantly delayed container shipping's return to the Suez Canal, the chief executive of German carrier Hapag-Lloyd said.
Rolf Habben Jansen said Monday that the world's fifth-largest liner operator is pausing its plan to return to one of the world's most important waterways, which has effectively been closed to container services for more than two years.
France Floats Nuclear Deployment Across Europe
PARIS-France will increase its stockpile of nuclear warheads and may, for the first time, temporarily deploy them on allies' territory, effectively broadening the country's nuclear deterrence amid mounting doubts about the U.S. security commitment to Europe.
French President Emmanuel Macron said Monday that France is working with eight European countries, including Germany, the U.K., the Netherlands and Poland, as part of a "forward deterrence" strategy that could see allies join France's nuclear exercises.
Anthropic's Feud With Pentagon Earns It Fans Amid the Blowback
In the last few days, Anthropic's chatbot Claude hit No. 1 in downloads on the Apple App Store, surpassing OpenAI's ChatGPT for the first time. On Monday, some of the company's AI apps briefly crashed because of what it called "unprecedented demand." Fans are literally taking to the streets to spell out their appreciation.
That's the consolation prize for losing the entire U.S. government as a customer.
Startup Making AI Chips More Power-Efficient Raises $500 Million
Ayar Labs, a decade-old chip startup backed by Nvidia and Advanced Micro Devices, has raised $500 million from investors including Neuberger Berman, MediaTek, Qatar Investment Authority and others in a funding round that values it at $3.8 billion.
The company, which is trying to revolutionize the way semiconductors are connected inside server racks, has developed some of the most advanced applications of a technology known as co-packaged optics, its investors and executives say.
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Expected Major Events for Tuesday
00:01/UK: Feb Shop Price Monitor
05:30/NED: Feb Flash Estimate CPI
07:00/TUR: Feb CPI
07:00/TUR: Feb PPI
07:00/ROM: Jan PPI
07:30/HUN: 4Q GDP
07:45/FRA: Jan Housing starts
08:00/CZE: 4Q GDP
08:00/SPN: Feb Unemployment
08:00/SVK: 4Q Labour Force Sample Survey: Employment & unemployment
08:00/SVK: 4Q Average monthly wage of employees
10:00/ITA: Feb Cities CPI
10:00/ITA: Feb Provisional CPI
10:00/EU: Feb Flash Estimate euro area inflation
10:00/GRE: Jan Labour Force Survey
16:00/DEN: Feb Foreign Exchange & Liquidity
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(END) Dow Jones Newswires
March 03, 2026 00:03 ET (05:03 GMT)
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