Overview of Global Financial Markets
Global equities delivered a mixed performance as rising oil prices and escalating tensions in the Middle East unsettled financial markets. Crude climbed to around $88 per barrel following disruptions near the Strait of Hormuz, raising concerns about supply and the inflationary impact of higher energy costs.
In the United States, equities ended the session mixed. The Nasdaq Composite edged marginally higher, supported by strength in technology shares, while the S&P 500 slipped slightly and the Dow Jones Industrial Average fell more notably as bond yields climbed.
Higher Treasury yields and a stronger US dollar weighed on risk sentiment, while sector performance was uneven with energy and technology outperforming, and defensive sectors such as consumer staples and real estate lagging.
Earlier in the global trading day, Asian equities advanced, although European markets closed lower, reflecting growing caution among investors as geopolitical risks intensify.
Markets also assessed the decision by the International Energy Agency (IEA) to release a record 400 million barrels from strategic reserves in an effort to stabilise supply following disruptions linked to Iran and regional conflict.
Inflation Data and Federal Reserve Outlook
US inflation data for February broadly matched expectations.
• Consumer prices rose 0.3 percent month on month
• Core inflation increased 0.2 percent month on month
While underlying inflation trends showed some improvement, the surge in oil prices has shifted the near-term outlook. Higher energy costs are expected to push headline inflation higher in the coming months and may prompt the Federal Reserve to keep interest rates on hold for longer.
Annual data showed:
• Consumer prices rose 2.4 percent year-on-year
• Core inflation held at 2.5 percent
However, the data predates the U.S.-Israeli strikes on Iran, which disrupted oil flows through the Strait of Hormuz and pushed energy prices higher, raising concerns that inflation could accelerate and complicate Federal Reserve policy decisions.
Global Market Developments
Asian Markets
Asian equities declined on Thursday as investors locked in recent gains and adopted a more cautious stance.
• Japan’s Nikkei 225 fell about 2 percent
• The broader TOPIX also weakened
• South Korea’s KOSPI
• Hong Kong’s Hang Seng Index
• Australia’s S&P/ASX 200
All moved lower, while mainland Chinese markets posted modest declines.
US Equity Futures
US equity futures moved lower overnight as oil prices surged amid escalating tensions near the Strait of Hormuz.
Futures on the S&P 500, Nasdaq 100 and Dow Jones Industrial Average fell around one percent as rising energy prices and geopolitical risks weighed on sentiment. Investors also awaited upcoming US inflation and labour market data.
European Markets
European equities fell sharply as energy price concerns weighed on sentiment.
• EURO STOXX 50 dropped 1 percent
• STOXX Europe 600 fell 0.8 percent
Banking shares including Banco Santander, UniCredit and Deutsche Bank led losses, while SAP, Prosus and Rheinmetall also declined amid broader market caution and geopolitical uncertainties.
Currency Markets
The US dollar remained near its strongest levels this year as rising oil prices and geopolitical tensions stoked inflation concerns, prompting expectations of tighter global monetary policy.
• The euro fell 0.1 percent to $1.1549, approaching its lowest level since November
• Japan’s yen and other major currencies also weakened against the US dollar
Oil Markets and Energy Supply Risks
Oil prices surged in Asian trading as escalating conflict involving Iran, the United States and Israel heightened fears of supply disruptions.
• Brent crude oil rose above $100 per barrel
• West Texas Intermediate climbed sharply
Tanker attacks and shipping disruptions near the Strait of Hormuz raised concerns over global energy supplies.
Strategic Oil Reserve Release
G7 leaders, led by Emmanuel Macron, agreed the Middle East tensions from the U.S.-Israeli-Iran conflict do not justify lifting sanctions on Russia.
Following discussions, the International Energy Agency announced a historic release of 400 million barrels of oil, with France receiving 14.5 million barrels to ease market pressures.
Gulf Sovereign Wealth Funds Reassess Strategy
Gulf economies including Saudi Arabia, the UAE, Qatar and Kuwait are reassessing sovereign wealth fund strategies to offset losses from the U.S.-Israeli-Iran conflict.
While hydrocarbon sectors may recover, non-oil industries face lasting damage, prompting potential adjustments in investment, sponsorships and deployment of the region’s $5 trillion in sovereign wealth assets.
Corporate and Industry Highlights
SoftBank and PayPay IPO
SoftBank Group shares fell 4 percent to 3,727 yen after its digital payments affiliate PayPay priced its US initial public offering below expectations at $16 per American depositary share, raising around $880 million.
The ADSs will begin trading on Nasdaq under the ticker “PAYP”, amid broader market volatility and geopolitical tensions.
Autonomous Mobility Partnership
Nissan Motor, Uber Technologies and British startup Wayve announced a partnership to develop robotaxis in Tokyo, targeting a pilot programme by late 2026.
Nissan Leafs fitted with Wayve’s autonomous technology will be offered via Uber, initially with trained safety drivers, while the companies consider expanding services to other international markets.
AI Infrastructure Partnership
Nebius Group N.V. and NVIDIA Corporation formed a $2 billion strategic partnership to develop hyperscale AI cloud infrastructure.
Nebius plans to deploy over 5GW capacity by 2030, integrating NVIDIA’s Rubin, Vera and BlueField platforms. Collaboration spans AI factory design, inference, infrastructure and fleet optimisation, accelerating Nebius’s AI cloud expansion globally.
LNG Supply Disruption
Several LNG buyers including Shell plc and TotalEnergies declared force majeure following QatarEnergy’s production halt at its 77 mtpa facility.
While March deliveries remain unaffected, disruptions are expected from April. Both firms maintain long-term North Field expansion partnerships, with Shell taking 6.8 mtpa and TotalEnergies 5.2 mtpa.
Banking Sector Evacuations
Citigroup Inc. and Standard Chartered evacuated Dubai offices, instructing staff to work from home after Iran threatened Gulf banking interests linked to the United States and Israel.
HSBC Holdings plc also closed Qatar branches. These actions highlight rising regional tensions, dent Dubai’s safe-haven appeal, and raise concerns over business continuity, capital flight and potential layoffs.
Tesla and xAI Project
Elon Musk announced a joint project between Tesla and xAI called Macrohard or Digital Optimus, capable of emulating software companies’ functions.
The system combines xAI’s Grok language model with a Tesla AI agent running on Tesla’s AI4 chip and Nvidia servers, and aims to be cost-competitive. SpaceX recently acquired xAI ahead of a potential IPO.
Semiconductor Demand
Taiwan Semiconductor Manufacturing Co (TSMC) reported February revenue of NT$317.66 billion, up 22.2 percent year-on-year, driven by strong demand for advanced AI and computing chips.
Revenue for the first two months of 2026 reached NT$718.91 billion, a 29.9 percent increase, reflecting robust demand from technology companies building AI infrastructure and next-generation systems.
Cybersecurity Incident
An Iranian-linked hacking group, Handala, claimed responsibility for a cyberattack on US medical device firm Stryker, wiping remote Windows devices and disrupting systems.
An SEC filing confirmed outages, though no ransomware was detected. Experts link the attack to Iranian retaliation amid US-Israeli strikes, signalling escalating state-sponsored cyber threats.
Oracle Credit Indicator Improves
A key credit risk indicator for Oracle Corp. improved sharply after its quarterly results eased investor concerns over AI-related capital spending.
Five-year credit default swap protection costs fell to a one-month low of 1.52 percentage points, according to ICE Data Services, signalling stronger investor confidence in the company’s credit quality and outlook.
Private Credit Market Pressure
Morgan Stanley limited redemptions to 5 percent at its North Haven Private Income Fund, fulfilling only 45.8 percent of requests amid heightened investor withdrawals from private credit markets.
Concerns over software company loans and broader market volatility prompted the move, following similar actions by JP Morgan, BlackRock and Blackstone.
Analyst Commentary and Market Outlook
Goldman Sachs Oil Forecast
Goldman Sachs raised its Q4 2026 Brent and WTI crude forecasts to $71 and $67 per barrel, citing prolonged disruptions in flows through the Strait of Hormuz linked to the US-Israeli conflict with Iran.
The bank anticipates 21 days of reduced oil flows followed by a gradual recovery in supply, and warned that prices could potentially surpass the peaks seen in 2008 even after planned strategic reserve releases are factored in.
Barclays European Market Warning
Barclays warned European equities could decline if oil prices remain near $100 per barrel.
Markets currently discount roughly a 25 percent probability of a major supply disruption, but sustained high prices could push the STOXX 600 index down to around 550.
The bank also warned that earnings-per-share growth could fall to low single digits and that central banks may adopt a more hawkish policy stance.
In this environment:
• Energy, utilities and healthcare sectors may outperform
• Financials and other cyclical sectors may lag
Semiconductor Earnings Outlook
Goldman Sachs forecasts stronger earnings for Samsung Electronics and SK Hynix as rising DRAM and NAND prices combined with AI-driven memory demand tighten supply.
SK Hynix could achieve high-70 percent DRAM margins and around 80 percent return on equity, while Samsung’s operating profit may quintuple in 2026, with both stocks considered attractively valued despite strong growth expectations.
Eli Lilly Obesity Drug Outlook
Wolfe Research raised its price target on Eli Lilly to $1,325, citing stronger expectations for its oral obesity drug orforglipron.
The pill could significantly expand the obesity treatment market by removing injection barriers, with peak sales estimated at $44 billion. Despite recent share weakness, Lilly is expected to dominate the obesity market and grow revenue more than 15 percent annually.
JPMorgan Upgrade on Oracle
JPMorgan Chase & Co. upgraded Oracle Corp. to Overweight with a $210 price target, noting that a 55 percent sell-off improved the stock’s risk-reward profile.
Strong third-quarter results showed 22 percent revenue growth and $7.38 billion in operating income, supported by cloud migration, multi-cloud adoption and continued database innovation, which are expected to drive further expansion despite margin pressures.
Barclays Upgrade on Nike
Barclays upgraded Nike Inc. to Overweight, citing operational progress, improved inventory management and margin stabilisation.
The bank highlighted double-digit growth in running products in North America and sales outpacing inventory, while noting potential risks from tariffs and geopolitical tensions.
Argenx Upgrade
Deutsche Bank upgraded Argenx to Buy with a €725 price target, citing strong Vyvgart sales momentum, a robust $4 billion cash position, and consistent profitability.
Despite a mixed fourth-quarter report and management changes, the valuation is now considered attractive, with peak Vyvgart sales expected to exceed $10 billion and 2026 P/E around 26x.
Howmet Aerospace Outlook
Analysts from RBC Capital Markets, Jefferies and Morgan Stanley issued bullish commentary on Howmet Aerospace following its technology and markets day.
They highlighted strong demand across commercial aerospace, defence and gas turbines, with aircraft production growth, rising turbine demand and continued technology investment expected to support market share gains and potential margin expansion.
Upcoming Economic Data and Events
Today’s key US economic releases include:
• Initial jobless claims
• Continuing jobless claims
• Four-week jobless average
• Housing starts
• Building permits
• Trade balances
• EIA natural gas stock change
Additional events include Treasury auctions and remarks from Federal Reserve Governor Michelle Bowman, which may influence markets.
Major earnings releases expected today include:
• Shell plc
• Adobe Inc.
• BMW
• Deutsche Bank
• Generali
• Wheaton Precious Metals
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