AE Wealth Management: Weekly Market Insights | 3/1/26 – 3/7/26
Weekly Market Commentary
THE WEEK IN REVIEW: March 1-7, 2026
Iran conflict, oil prices send stocks lower and bond yields higher
We focus on financial data or earnings most of the time, and most of the time the markets ebb and flow whichever way the data dictates. But when you have a geopolitical shock, all the normal inputs — like financial data and earnings — are pretty much ignored as fear grips markets, volatility spikes and markets experience wild daily fluctuations.
This time is no different, after the U.S. and Israel launched attacks against Iran over a week ago. The initial strikes took out Iranian leadership, and since then the U.S. and Israel have been systematically breaking down Iran’s military capabilities.1 We’re specifically targeting their ballistic missiles, which, along with what was left of their nuclear program, were deemed a threat to the region.
Volatility has risen dramatically since the strikes began, going from 17 at the end of February to over 29 as of March 6.2 Much of the recent sell-off has been over concerns that the Middle East would be plunged into a wider and longer conflict and that the supply of oil from the region would be disrupted. As a result, the price of oil went from around $65 per barrel to over $90 per barrel last week.3
Then there’s the paradox of bond yields climbing. Typically, when investors move from stocks to bonds, yields decline. The theory is that the demand for safety increases the cost of bonds and yields decline. So, why are yields rising in this situation?4 It’s because of the perceived threat of elevated oil prices, which would be very inflationary.
The decline in inflation is closely linked to the decline in oil prices in the aftermath of the pandemic and the beginning of the Russia/Ukraine conflict. The biggest culprit is the fear that Iran would block the Strait of Hormuz and bottle up 20% of the world’s oil supply.5 Iran has threatened to do this, but has yet to attempt the feat (or if they did try, they have failed so far). The very real possibility exists that they don’t have the capability to execute and they’re all talk. Or it could be that China — one of Iran’s few allies and dependent on Iranian-sanctioned oil — told Iran not to mess with the Hormuz.6
In our view, it seems Iran simply doesn’t have the ability to pull off coordinated action against shipping, which is why they are literally spraying everyone within range of their rockets. If the Chinese had any pull, that influence disappeared when Iran’s leadership was wiped out on the first day of Operation Epic Fury.7
Then there are the shipping companies and insurers who don’t want to risk their billion-dollar tankers and the oil they carry. Sometimes threats work — but only for so long. Let’s think positively and pray for the hostilities to end so everyone can live peaceful, harmonious and profitable lives.
Stay vigilant, focused and in touch with your advisor. These events hopefully will be over quickly, but it never hurts to share your concerns and get confirmation that you’re on the right track with your financial plan.
Has the jobs market finally broken?
Consumer spending and a slowing but steady jobs situation have been the two pillars that have had the economy’s back over the past six years. Last week’s ADP employment report was strong compared to the prior month (+63,000 vs. +11,000), so there really wasn’t a hint that anything was amiss.8
That all changed on Friday, when the Bureau of Labor Statistics (BLS) employment situation reported that we actually lost 92,000 jobs.9 Consensus was calling for the addition of 50,000 to 60,000 jobs, while the range of estimates was between +35,000 and +125,000. Reasons cited for the negative number? Severe winter weather and a strike at health care provider Kaiser Permanente, which ended in late February.10
The jobs market has been hanging in there, although just barely. To say this was a disappointing report is an understatement. As always, one report doesn’t make a trend, but markets were already raw from the Iran conflict, and this reading was far from what anyone wanted or expected. Granted, the strike is over, and the weather will improve, so the possibility is still there that this report was an anomaly.
The challenge going forward is the Federal Reserve. Chairman Jerome Powell previously told us the jobs market was solid and the Fed should focus on inflation. With this report and inflation seemingly on the rise thanks to the Iran situation, what will the Fed do at their meeting coming up?
The Fed can either keep rates higher to tame still-elevated inflation, which is expected to move higher thanks to rising oil prices. That will slow economic growth and hurt jobs further. Or does the Fed cut rates to spur the economy and grow jobs at the risk of reigniting inflation? All this is happening while we wait for Kevin Warsh to be sworn in as the Fed chair in May.11 There’s a good chance Powell will choose not to do anything until he is replaced. It’s reminiscent of the old saying, “Nero fiddled while Rome burned.”
Coming this week
- The conflict in Iran and oil prices will continue to dominate headlines and markets this week. Once we begin to see a resolution and the potential disruption of oil supplies decreases, only then will volatility decline and markets return to a more “normal” state.
- Data starts flowing on Tuesday, with the NFIB optimism index and existing home sales.
- On Wednesday, we’ll get the February Consumer Price Index (CPI) and MBA mortgage applications.
- Thursday will feature weekly unemployment claims, the trade deficit, housing starts and building permits.
- Finally, Friday will be a busy day, starting with the second reading of the fourth-quarter 2025 gross domestic product (GDP). The first reading was a weak 1.4%, mostly thanks to the government shutdown last fall.12
- Friday will also feature personal spending and income plus Personal Consumption Expenditures (PCE). And the delayed January Job Openings and Labor Turnover Summary (JOLTS) number plus consumer sentiment will close out the day.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | -2.02% | -1.54% | 17.45% | 18.52% | 11.90% |
| NASDAQ | -1.24% | -3.68% | 23.90% | 24.23% | 11.62% |
| DJIA | -3.01% | -1.17% | 11.56% | 12.42% | 8.56% |
Interest Rates: | |||||
| 3/6/2026 | 2/27/2026 | ||||
| UST 10 YR Government Bond Yield | 4.14% | 3.95% | |||
| Germany 10 YR | 2.86% | 2.64% | |||
| Japan 10 YR | 2.17% | 2.11% | |||
| 30 YR Mortgage | 6.11% | 6.04% | |||
| Oil | $90.90/ppb | $67.02/ppb | |||
| Regular Gas | $3.45/ppg | $2.89/ppg | |||
| All data as of March 6, 2026. | |||||
Sources:
1 Jon Gambrell, Sam Mednick and Samy Magdy. PBS. March 7, 2026. “New wave of strikes hit Tehran as Netanyahu vows ‘many surprises’ for next phase of Iran war.” https://www.pbs.org/newshour/world/new-wave-of-strikes-hit-tehran-as-netanyahu-vows-many-surprises-for-next-phase-of-iran-war. Accessed March 8, 2026.
2 Yahoo! Finance. “CBOE Volatility Index (ˆVIX).” https://finance.yahoo.com/quote/%5EVIX/. Accessed March 8, 2026.
3 Business Insider. “Oil (WTI).” https://markets.businessinsider.com/commodities/oil-price?type=wti. Accessed March 8, 2026.
4 Sean Conlon and Sawdah Bhaimiya. CNBC. March 5, 2026. “Treasury yields move higher amid rising oil and labor costs.” https://www.cnbc.com/2026/03/05/us-treasury-yields-investors-fears-around-us-iran-war.html. Accessed March 8, 2026.
5 Al Jazeera. March 2, 2026. “Iran says will attack any ship trying to pass through Strait of Hormuz.” https://www.aljazeera.com/news/2026/3/2/iran-says-will-attack-any-ship-trying-to-pass-through-strait-of-hormuz. Accessed March 8, 2026.
6 Paroma Soni and Catherine Allen. Politico. March 2, 2026. “5 charts show China’s oil dilemma after US strikes.” https://www.politico.com/news/2026/03/02/iran-us-strikes-china-oil-supply-charts-00806415. Accessed March 8, 2026.
7 Greg Myre and A Martínez. NPR. March 4, 2026. “Pentagon says it has destroyed Iran’s Navy and killed all its senior leaders.” https://www.npr.org/2026/03/04/nx-s1-5735587/pentagon-says-it-has-destroyed-irans-navy-and-killed-all-its-senior-leaders. Accessed March 8, 2026.
8 ADP Research. February 2026. “ADP® National Employment Report.” https://adpemploymentreport.com/. Accessed March 8, 2026.
9 U.S. Bureau of Labor Statistics. March 6, 2026. “Employment Situation Summary.” https://www.bls.gov/news.release/empsit.nr0.htm. Accessed March 8, 2026.
10 Dave Muoio. Fierce Healthcare. Feb. 25, 2026. “Massive Kaiser Permanent strike ends, though contracts are still being finalized.” https://www.fiercehealthcare.com/providers/kaiser-permanente-strike-31000-union-worker-unacuhcp. Accessed March 8, 2026.
11 Bram Berkowitz. The Motley Fool. March 7, 2026. “President Donald Trump Finally Has a New Incoming Fed Chair — but Jerome Powell Can Still prove to Be a Thorn in His Side.” https://www.nasdaq.com/articles/president-donald-trump-finally-has-new-incoming-fed-chair-jerome-powell-can-still-prove-be. Accessed March 8, 2026.
12 Bureau of Economic Analysis. Feb. 20, 2026. “GDP (Advance Estimate), 4th Quarter and Year 2025.” https://www.bea.gov/news/2026/gdp-advance-estimate-4th-quarter-and-year-2025. Accessed March 8, 2026.
AE Wealth Management, LLC (AEWM) is an SEC Registered Investment Adviser (RIA) located in Topeka, Kansas. Registration does not denote any level of skill or qualification. The advisory firm providing you this report is an independent financial services firm and is not an affiliate company of AE Wealth Management, LLC. AEWM works with a variety of independent advisors. Some of the advisors are Investment Adviser Representatives (IAR) who provide investment advisory services through AEWM. Some of the advisors are Registered Investment Advisers providing investment advisory services that incorporate some of the products available through AEWM.
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