Stable Market Minute - 2nd March 2026: Mayhem in the Middle East

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Last Friday, the U.S. reported an inflation rate of 3.6%, surpassing the anticipated 3%. This unexpected rise in inflation, coupled with escalating tensions between the U.S. and Iran, has injected a sense of uncertainty into the markets. As a result, equities closed lower last week, while commodities such as oil, silver, and gold saw an uptick.

Over the weekend, the situation intensified with the onset of war in several Gulf countries, further unsettling global markets. As trading resumed on Sunday evening and continued into Monday, investors adopted a cautious stance. Key currency pairs like GBP/USD are currently at 1.3350, while GBP/EUR stands at 1.1388. Gold has surged to $5,400, and oil, after peaking at $76, is now priced at $72 per barrel. The S&P index has witnessed a decline of approximately 3% since Friday.

A significant concern is the potential impact on the Strait of Hormuz, a critical energy chokepoint. Any disruption in oil flow through this region could drive up production costs, exacerbating inflationary pressures. This scenario threatens to derail planned interest rate strategies from the U.S., UK, and Europe.

Looking ahead, the week promises to be volatile, with several key economic indicators set for release. European inflation data is due on Tuesday, followed by Chinese manufacturing figures on Wednesday. By Friday, market watchers will be keenly analysing Eurozone GDP, U.S. payroll data, and retail sales. As geopolitical tensions and economic indicators unfold, market participants should brace for a potentially tumultuous week. Stay tuned for more updates in Stable's Market Minute.

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