Market Brief | Deep Insight on the Post-Escalation Repricing

THE CONFLICT - WHERE THINGS STAND

How it started: On February 28, the US and Israel launched coordinated air strikes on Iran - targeting missile sites and government buildings. Iran's Supreme Leader, Ali Khamenei, was killed in the opening hours. Iran immediately retaliated with hundreds of missiles and thousands of drones aimed at US bases and Israeli territory across the region.

What is actually happening: Think of global oil supply like a highway. Right now, the world's most important highway - the Strait of Hormuz - is effectively closed. About 20% of all the oil the world uses every day moves through this 21-mile waterway. Reuters’ graphic shows daily tanker traffic fell to zero by Wednesday from 37 on Friday, February 27, which supports a near-halt narrative.

As of this morning (March 10): Trump said late Monday that the war is "very complete, pretty much" and that the US plans to escort tankers through the Strait with the Navy. No ceasefire has been formally announced. Iran's newly appointed leader - Mojtaba Khamenei, son of the killed Supreme Leader - is seen as a hardliner, which suggests Iran is not ready to surrender.

OIL - THE NUMBERS YOU NEED TO KNOW

Oil is the centrepiece of this entire story. Here's the simple version: when supply gets cut off, prices go up. When a leader says the war might be ending, prices crash. Right now, both are happening on the same day.

Price journey On IG Platform:

Oil prices exploded from around $65 a barrel to above $115, briefly approaching $120 overnight Sunday - the first time crude has traded above $100 since the Russia-Ukraine war in 2022.

Then, Monday, US President Trump told CBS News "I think the war is very complete, pretty much" - and oil plunged over 10% in minutes. That single sentence moved a multi-trillion dollar market. That's how fragile and sentiment-driven things are right now.

For the experts: We are simultaneously navigating a geopolitical supply shock of historic proportions, a stagflationary macro print (worst US payrolls since the pandemic alongside energy-driven inflation), and early signs of structural stress in private credit. The Trump ceasefire signal is the first meaningful de-escalation catalyst - but carries no operational confirmation and the physical infrastructure damage may not reverse quickly even if hostilities end.

Why the Strait of Hormuz matters so much:

• 20% of all the world's oil passes through it every day
• It also carries 30% of Taiwan's gas supply - the island where most of the world's advanced computer chips are made
• It carries the ingredients for 92% of the world's sulfur, which is essential for mining the copper and cobalt that go into electric vehicles
• A third of the world's nitrogen fertiliser - which feeds billions of people - also moves through it

This is not just an energy story. It's a tech story, a food security story, and a commodity story all wrapped in one 21-mile stretch of water.

FOUR WAYS THIS COULD PLAY OUT

Think of it like a traffic jam. The question is: how long does it last, and how bad does the accident get?

The futures market's message to experts: The oil curve is in steep backwardation - front month near $90–100 while the March 2027 contract sits near $66–67. The professional market is not pricing permanent scarcity. It is pricing temporary panic. That is either a reassuring signal or a dangerous complacency, depending on how long the Strait stays closed.

HOW MARKETS REACTED - THE FULL PICTURE

Stock markets

The war pushed the US 500 below the sideways range that had held since November, triggering a sharp breakdown - but prices have now rebounded to test the lower boundary of that previous range.

The standout winner: 

Energy stocks: The sector that almost nobody wanted going into 2026 is up 24.6% year-to-date and was the only major sector to gain last week (+1.4%). Indices with higher energy weightings dramatically outperformed - a clear lesson for portfolio construction in this environment.

Fear gauge: The Volatility Index - the market's "fear index" - jumped 48% in a week. Past spikes of this size have typically been buying opportunities for US 500 - though with no guarantees.

The “Defensive Debasement" Assets

Gold: Down ~4.7% last week despite a full-scale war. Gold actually jumped 5% in the first two days of the conflict - then gave it all back. Closed Monday 9 March at ~$5,150 after recovering from a weak open. because the US dollar surged and a stronger dollar makes gold more expensive for international buyers, offsetting safe-haven demand. Long-term bull case remains firmly intact. Short-term: consolidating.

Bitcoin: Rebounded - Refused to follow tech stocks lower in the way some expected. $75,000 is the resistance level to watch if recovery momentum builds.

US Dollar: Best weekly gain since October 2024. When markets panic globally, money tends to flow into the dollar as the world's "safe currency." This helped the US but hurt everyone else - particularly Europe.

CENTRAL BANKS - THE IMPOSSIBLE POSITION

Central banks, are facing their most difficult communications challenge in years. Here's the dilemma in simple terms:

The problem: The economy is simultaneously showing two opposite symptoms. Growth is weakening (worst jobs print since the pandemic). Inflation is threatening to rise (oil prices surging). Normally, you cut rates to help a slowing economy. But you raise rates to fight inflation. You can't do both at once.

THE WEEK AHEAD - WHAT TO WATCH

Key data releases:

The five things that will move markets this week:

1. Trump's de-escalation signal - The most important variable. "War is very complete" is not a ceasefire. Watch for whether this translates into a concrete framework. If yes: oil could drop $20–30. If it's noise: another wave of volatility incoming.
2. Strait of Hormuz tanker traffic - The real-time ground truth. Any sustained increase above 50 transits per day signals that naval escorts and insurance solutions are beginning to work.
3. Wednesday's CPI print - Even a modest beat (0.3% vs 0.2% expected monthly) validates the inflation fear story and pushes the Fed further into its corner.
4. G7 Strategic Reserve coordination - A coordinated release could take $10–15 off oil at the announcement, even if the physical impact takes weeks. Watch for Tuesday's outcome.

Compiled 10 March 2026. Sources: Bloomberg, S&P Global Market Intelligence, Al Jazeera, Reuters, CNN Business, CNBC, Fortun, Bloomberg Economics, Goldman Sach. All market data as of most recent available. For informational and analytical purposes only - not investment advice.