Market drivers and catalysts
Equities: Risk-off returned: US held flat, while Europe and Asia sold off as oil jumped on Middle East escalation.
Volatility: Vix elevated, futures risk-off, Iran uncertainty, energy-inflation focus
Digital Assets: BTC steady, ETH resilient, IBIT/ETHA strong, etf inflows supportive, geopolitics watch
Fixed Income: US Treasury yields rebound sharply on inflation fears from higher energy prices
Currencies: USD rebounds as safe haven as Iran conflict concerns rise
Commodities: European natural gas spiked 50% Monday. Oil rebounds. Gold supported but off highs
Macro events: Eurozone Flash Feb. CPI
Macro headlines
US President Trump warned of ongoing US attacks on Iran until it no longer posed a threat, indicating the conflict could last a month or longer. Iran declared the Strait of Hormuz closed, threatening vessels trying to pass through.
The US may limit Nvidia's H200 chip exports to 75,000 units per Chinese firm, affecting market access. AMD's chips count toward this cap. Total shipments to China could hit one million, with restrictions impacting major tech companies.
The ISM Manufacturing PMI rose slightly to 52.4 from January's 52.6, exceeding expectations of 51.8 in February. The increase was driven by a surge in prices paid, climbing to 70.5, the highest since June 2022. Order backlogs increased by 5 points to 56.6, the highest since May 2022. Employment improved slightly to 48.8, though still below the expansion threshold. However, new orders decreased to 55.8, and production fell to 53.5. Three demand indicators remain in expansion territory.
Japan's unemployment rate increased to 2.7% in January 2026, higher than the forecast and the highest since July 2024. Employment decreased by 290,000, while the labor force fell to 70.08 million. The participation rate was 63.5%. The jobs-to-applicants ratio was 1.18.
Germany's retail sales fell 0.9% in January 2026, missing the expected 0.2% drop, after a 1.2% rise in December. Non-food sales dropped 1.7%, while food sales were flat and e-commerce rose 2.5%. Yearly retail trade grew 1.2%, easing from December's 2.5% gain.
Trump announced ongoing US combat operations in Iran, citing Iran's missile development capable of reaching America and its pursuit of nuclear weapons. He indicated operations are ahead of schedule and may extend the timeline as necessary
Macro calendar highlights (times in GMT)
1000 – Eurozone Flash Feb CPI
0030 – Australia Q4 GDP estimate
Earnings this week
Today: Crowdstrike, Ross Stores, Sea Limited, Thales, AutoZone,
Wednesday: Broadcom, Bayer, Adidas, Dassault Aviation, Veeva Systems, Continental
Thursday: Costco, Petrobras, Marvell Technology, Merck, Deutsche Post, Reckitt Benckiser, Ciena, Galderma, Kroger, Universal MusicGroup, JD.com, Aviva
Friday: OTP Bank
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 was flat, the Dow fell 0.2% to 48,904.78, and the Nasdaq rose 0.4% to 22,748.86 after a choppy session tied to Middle East headlines and higher oil. Energy and defence cushioned the market, with Exxon Mobil up 1.1% and Northrop Grumman up 5.9% as investors priced stronger demand for fuel and equipment. Nvidia rose 3.0% after announcing $2 billion investments in two optics suppliers to strengthen AI data-centre networking, while Palantir gained 5.8% on its defence-heavy customer base. Focus now stayed on oil, yields and the March 18 Fed meeting.
Europe: The STOXX 600 fell 1.6% to 623.63 and the Euro STOXX 50 slid 2.5% to 5,986.93, while the FTSE 100 dropped 1.2% to 10,780.11 as the energy shock story moved from theory to trading screen. Travel and banks led the selling, with IAG down 5.5% on flight cancellations. Energy and defence held up, with Shell up 1.9% and BAE Systems up 6.0%, while Maersk rose 7.9% as higher insurance and rerouting risks lifted freight-rate expectations. Investors next watched oil and gas prices and what they meant for rate-cut hopes.
Asia: Selling intensified in Asia: the Nikkei 225 fell 2.6% to 56,243.00, the CSI 300 slipped 1.3% to 4,666.42, and South Korea’s KOSPI tumbled 7.2% to 5,791.91 after reopening from the Independence Movement Day holiday (observed Monday). Hong Kong’s Hang Seng had already closed Monday down 2.1% at 26,059.85. The oil shock hit exporters and chipmakers, with Samsung Electronics down 9.8%, SK hynix down 11.1% and Hyundai Motor down 11.9%, while Japan’s Mitsubishi Heavy Industries fell 4.7%. Attention stayed on whether crude and shipping disruption lasted long enough to spill into earnings.
Volatility
Volatility remains elevated after Monday’s Iran-driven swing session. The VIX closed at 21.44 (+7.96%), signalling that investors continue to price in a geopolitical risk premium. VIX futures are also trading above spot, with the front-month contract around 22.05, showing that markets expect uncertainty to remain present in the near term rather than fade immediately.
Overnight futures point to continued caution: Euro Stoxx 50 futures -0.98%, S&P 500 futures -0.89%, Nasdaq futures -1.09%, Russell 2000 futures -1.33%, and Dow futures -0.85%. In plain terms, investors are reassessing risk after the initial shock, particularly around energy supply, inflation expectations and how central banks might respond if oil prices stay elevated.
SPX expected move (options-implied, this week): approximately ±109 points (≈±1.6%) into Friday, 6 March.
- For today’s expiration, downside protection remains more expensive than upside exposure, indicating that investors are still prioritising hedges over aggressive risk-taking.
Digital Assets
Digital assets held relatively firm despite broader risk sensitivity. Bitcoin trades around $67.8k, Ethereum near $1.99k, while Solana (~$85.4) and XRP (~$1.36) are modestly softer on the session. Crypto-linked equities are stronger, with IBIT +5.39% and ETHA +5.85%, reinforcing that ETF demand remains a key stabilising force in this market.
Recent flow data shows continued net inflows into spot Bitcoin and Ethereum ETFs, suggesting institutional allocation is cushioning volatility even as geopolitical headlines dominate macro sentiment. The key question for the coming days is whether crypto continues to trade as a risk asset alongside equities, or whether ETF inflows allow it to remain relatively insulated from broader market swings.
Fixed Income
US treasuries sold off sharply, spiking yields. The benchmark 10-year treasury yield rose more than twelve basis points from them lows to start the week to 4.05%, while 2-year yields jumped to a similar degree, spiking back above 3.48%. Inflation fears, or at least the real yields available for US treasury yields should inflation rise, may be behind the rise in yields as oil prices have risen to new highs on the Iran conflict.
Japanese government bonds sold off and the yield curve steepened in Japan as oil prices are driving inflation fears. The benchmark 2-year JGB yield rose two basis points to above 1.25% and the benchmark 10-year JGB yield jumped over four basis points to 2.13%.
Commodities
Gold and silver prices fell back Monday, with silver still under pressure Tuesday in Asia, while gold rebounded. Gold trades near USD 5,350 per ounce and silver fell back below USD per ounce after a spike high above USD 99 per ounce early Monday.
Crude oil futures rebounded off the Monday closing levels as Iran has threatened to close the Strait of Hormuz as the US and Israeli attacks on Iran continue. May Brent crude futures rose over two dollars per barrel to just below USD 80 per barrel and April WTI rose more than USD 1.50 to 72.80 per barrel.
European natural gas prices rose nearly 50% Monday and could face further upward pressure as Iran has launched attacks on Qatar’s natural gas production facilities and LNG trains have been halted by the conflict.
Currencies
The US dollar rebounded as the Iran conflict is bringing fresh concerns of disruptions to global oil and gas (LNG) supplies, weighing on risk sentiment again. EURUSD dipped below 1.1670 and therefore to new lows for the recent cycle late in Asian hours Tuesday. USDJPY was steady near 157.40, almost unchanged from Monday’s closing level.
Sterling rebounded, with EURGBP back below 0.8750, negating the recent breakout higher on political concerns.
