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Iran conflict, oil surge weigh on stocks

Escalating military confrontation between the US, Israel and Iran has driven a marked shift into safe-haven assets at the start of the week and pushed oil prices sharply higher. US and European equities closed lower on Friday following stronger‑than‑expected US producer prices, and Asian markets were trading mostly in the red on Monday. While safe havens such as the US dollar and gold advanced, attention is also turning to a busy macro calendar, with global Purchasing Managers’ Indices, euro‑area inflation and Friday’s US labour market report set to provide important signals for the growth and policy outlook in the days ahead.

  • Date
  • Auteur Shane Strowmatt, Senior Investment Writer
  • Temps de lecture 5 minutes

Oil
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US and Israeli forces killed Iran’s Supreme Leader Ayatollah Ali Khamenei in large-scale strikes on Saturday, prompting Tehran to launch missiles and drones at Israel and several Gulf states hosting US bases, including the United Arab Emirates, Qatar, Kuwait and Saudi Arabia. More than 200 people have been reported dead in Iran and three US service members were killed, while a temporary leadership council has taken over in Tehran as uncertainty over Khamenei’s succession grows. Markets reacted with a spike in demand for safe-haven assets at the start of the week, with the US Dollar Index up 0.5%, gold trading higher around USD 5380 per ounce and silver also gaining. Bitcoin was trading slightly lower around USD 66,500.

US oil prices surge on Iran risk

US crude oil climbed 7.4% to just under USD 72 per barrel and Brent rose 7.7% to more than USD 78 on Monday, as traders reacted to the risk that the escalating US‑Israel conflict with Iran could trigger a major and prolonged supply shock. Tanker movements through the Strait of Hormuz, which handled more than 14 million barrels per day or roughly one-third of global seaborne crude exports in 2025, have largely ceased as shipping companies adopt a cautious stance. US President Donald Trump said on Sunday that combat operations in Iran will continue until US objectives are achieved, while also indicating that Tehran has signalled a willingness to negotiate, leaving open a path to de‑escalation that could eventually ease pressure on oil prices.

Asia stocks drop as risk-off sets in

Asian equity markets fell sharply on Monday after the US and Israeli strikes on Iran triggered a flight from risk assets. Japan’s Nikkei 225 was trading 1.4% lower, Hong Kong’s Hang Seng Index fell 1.9% and mainland China’s CSI 300 was trading 0.4% higher. India’s Nifty 50 also lost 1.4%, while Australia’s S&P/ASX 200 was little changed. In addition to geopolitical risks, technology shares also weighed on the region amid ongoing uncertainty over the impact of artificial intelligence, while investors reassessed interest rate paths, with markets dialling back expectations of early Bank of Japan tightening but increasingly anticipating further rate hikes by the Reserve Bank of Australia in response to resurgent inflation. Markets in South Korea were closed for a holiday on Monday.

US labour data and PMIs in focus

Looking beyond geopolitical developments, market attention this week centres on the health of the US economy, with a particular focus on business activity surveys and Friday’s labour market report. Purchasing Managers’ Indices (PMI) dominate the start of the week, with manufacturing readings from Germany, the wider euro area, the United Kingdom and the United States on Monday, as well as the US ISM manufacturing PMI, followed by services and composite PMIs for Japan, China, the euro area, the UK and US on Wednesday. Euro-area consumer price data on Tuesday, alongside Swiss consumer prices on Wednesday, provide fresh insight into the disinflation trend in Europe. On Friday, investors turn to growth indicators when the euro area releases fourth‑quarter gross domestic product, while a series of US releases - including January retail sales and February nonfarm payrolls, unemployment and wage growth - offer an important read on US demand and labour market conditions and what they may imply for the Federal Reserve’s policy stance.

US equities fall on inflation data

Major US stock indices ended lower on Friday, as stronger-than-expected domestic producer prices reduced the likelihood of further Federal Reserve rate cuts. The Dow Jones Industrial Average lost 1.1% to 48,977.92 points, leaving it down about 1.3% for the week but slightly positive for February, while the S&P 500 fell 0.43 to 6878.88 points and the Nasdaq 100 slipped 0.3% to 24,960.04 points, taking its weekly and monthly declines to 0.2% and 2.3% respectively. The US core producer price index, which excludes food and energy, rose 0.8% in January, up from 0.6% in December and far above market expectations for a more moderate increase, according to data released on Friday. The stronger-than-expected figures, which may partly reflect the impact of tariffs, could reinforce the Fed’s cautious stance on interest-rate cuts despite pressure from Trump for looser policy.

Swiss GDP edges higher as outlook improves

Swiss gross domestic product adjusted for sporting events increased by 0.2% in the fourth quarter, following a 0.4% contraction in the previous quarter, according to data released on Friday, stabilising overall economic momentum at the end of the year. Addtionally, the KOF economic barometer for Switzerland rose 0.9 points to 104.2 in February from a revised 103.3 in January, remaining above its medium-term average and signalling more firmly positive business-cycle prospects, with demand-related components strengthening on the back of firmer consumer and foreign demand. The Swiss Market Index gained 0.7% on Friday, despite most European markets closing in negative territory.

German inflation rate dips in February

Germany’s inflation rate is expected to come in at 1.9% in February, down from 2.1% in January, according to provisional figures released on Friday, with consumer prices rising 0.2% on the month. Core inflation, excluding food and energy, is projected to hold at 2.5%. Germany’s DAX was essentially flat, while the Euro Stoxx 50 declined 0.4% on Friday.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: Manufacturing Purchasing Managers’ Indices from several of the world’s largest economies, including France (09:50), Germany (09:55), the euro area (10:00), the UK (10:30), Canada (15:30) and the US (15:45), as well as the US ISM Manufacturing Purchasing Managers’ Index (16:00); German retail sales (08:00), Swiss retail sales (08:30), European Central Bank President Christine Lagarde speaks (15:00).

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Editor: Alessandro Fezzi
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