Wall Street is preparing for a turbulent week ahead as the intensifying Middle East crisis dictates market sentiment. Geopolitical developments have moved to the foreground following the joint US-Israeli military strike against Iranwhich resulted in the death of its Supreme Leader Ayatollah Ali Khamenei and several high-ranking officials.
The rapidly shifting landscape across the Gulf has fueled investor anxiety, boosting demand for safe-haven instruments such as gold and US Treasuries.
The energy sector is also under intense scrutiny following the strikes. Brent crude, the global oil benchmark, surged 10% to approximately $80 per barrel in over-the-counter trading on Sunday.
Analysts now suggest prices could potentially test the $100 mark if disruptions persist.
“In the short-term, while waiting for more clarity on the impacts of the events, we can expect a spike in oil price (5% to 10%), lower US rates, gold up and equities down a little (around 1%). This also serves as an excuse for some well-deserved profit taking when markets are at all-time highs,” said Vincent Mortier, chief investment officer at Amundi, according to Bloomberg.
Beyond the conflict, market participants are bracing for significant economic indicators, including the February payrolls report, auto sales figures, and both manufacturing and services PMI data.
Simultaneously, the earnings season continues with high-profile results expected from major companies including Alibaba, CrowdStrike, and Broadcom.
US Economic Calendar
March 2 (Monday), data on S&P final US manufacturing PMI for February, ISM manufacturing for February, and TBA Auto sales for February will be declared.
March 4 (Wednesday), separate reports on ADP employment for February, S&P final US services PMI for February, ISM services for February, and Fed Beige Book will be released.
March 5 (Thursday), initial jobless claims for the week ended February 28, US productivity Q4, and import price index for January will be released.
March 6 (Friday), data on US employment report for February will be declared.
Q4 Earnings
Following companies are due to report fourth quarter results in the week ahead — Riot Platforms, Core Scientific, Plug Power, CrowdStrike, Ross Stores, Broadcom, Okta, Costco, and Alibaba.
US Stock Market Last Week
American equities tumbled as investors continued to sell off shares in companies perceived as vulnerable to the artificial intelligence transition. Market sentiment was further dampened on Friday by a higher-than-expected inflation report, which rattled Wall Street’s confidence.
The S&P 500 fell 29.98 points, or 0.4%, to 6,878.88. The Dow Jones Industrial Average fell 521.28 points, or 1.1%, to 48,977.92. The Nasdaq composite fell 210.17 points, or 0.9%, to 22,668.21.
The Russell 2000 index of smaller companies fell 44.93 points, or 1.7% to 2,632.36.
For the week, the S&P 500 is down 30.63 points, or 0.4%. The Dow is down 648.05 points, or 1.3%. The Nasdaq is down 217.86 points, or 1%.
