Global markets swung into risk-off mode after the U.S. carried out strikes on Iran. U.S. equities slipped, the dollar strengthened, and commodities jumped sharply, with oil pushed to a four-year high. Crypto markets were also operating under elevated volatility, though the main focus in the source material was the effect of higher energy prices on inflation and the path of Federal Reserve rate cuts.
Energy shock drives a fresh inflation scare
The clearest market reaction came through energy. With the Strait of Hormuz effectively shut, a route that carries one-fifth of the world’s crude, Brent crude climbed 8% to $79 per barrel. European natural gas prices rose as much as 38%, the sharpest move since August 2023. That sudden increase forced markets to reassess how much new inflation pressure could build across the global economy.
The article said Trump had long pointed to stable energy prices and restrained inflation as policy achievements. Employment has been recovering, but inflation remains high. If energy costs trigger another round of price increases, expectations for Fed easing may need to be pushed back, including the possibility of a July rate cut. Traders, according to the report, have not fully priced in that risk yet.
Equities weaken while gold approaches $5,400
Asian and European stocks moved lower in step with the U.S. market, while S&P 500 futures dropped 1.1%. U.S. Treasury yields also moved upward as investors cut risk. Precious metals benefited from that shift, and gold briefly approached $5,400 an ounce.
The report argued that markets often price in fear before a major event, and volatility can cool once the event actually happens. Trump had repeatedly warned of action against Iran and had highlighted March 1 in public remarks. The article also said the attack resulted in Khamenei’s death, while Iran’s response did not match the intensity many had expected. Markets are now watching whether Trump’s calls for negotiations lead to renewed diplomatic contact.
March 2 calendar includes PMI data and policy meetings
By press time, fresh reports said the U.S. had launched heavy strikes on targets in Lebanon. The U.S. Secretary of Defense said the current four-to-five week timeline for military operations could still change. Trade tensions were also still in the background. The European Union is pushing back against the idea of paying hundreds of billions to the U.S., arguing that Trump does not have that level of authority under current law.
Later in the day, the U.S. will release the S&P Manufacturing PMI, with consensus at 51.4. A stronger reading than the previous month could point to continuing labor-market strength, but it would not support near-term rate-cut expectations. On the political schedule, Trump is set to attend a medal ceremony at 19:00, a closed signing event at 21:30, and policy meetings at 22:00 and again at midnight. In crypto, Pocket Network plans to compensate node runners and stakers affected by an accounting error, while Ronin’s Cambria token presale is scheduled for the same day.