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Today Fundamental Analysis: Oil Soars Over 6% as Escalating Middle East Tensions Rattle Energy Markets

March 2, 2026, 08:34
Oil Soars Over 6% as Escalating Middle East Tensions Rattle Energy Markets

U.S. stock futures fell sharply at market open after joint U.S.-Israeli strikes on Iran over the weekend intensified geopolitical tensions, triggering a surge in oil and gold prices. Dow and S&P 500 futures dropped 1%, while Nasdaq 100 futures lost around 1.3%, as investors sought safe haven assets.

U.S. Treasury yields moved higher during Asian trading on Monday, with the 10-year yield rising to 3.98%, the 30-year climbing to 4.66%, and the 2-year reaching 3.40%.

Crude oil jumped as much as 7% on fears the conflict could disrupt supply. Markets are closely watching potential disruptions to the Strait of Hormuz, a critical oil transit route handling roughly 20% of global supply. Any sustained spike in oil prices could lift inflation expectations and encourage the Federal Reserve to maintain a higher-for-longer policy stance. Despite this, traders continue to price in the possibility of rate cuts later this year, with expectations that rates could hold in the 3.5%–3.75% range by mid-March.

USDCAD pulled back after a brief uptick toward 1.3675, trading near a two-week low as rising oil prices strengthened the Canadian dollar. At the same time, the U.S. dollar retreated from recent highs amid stagflation concerns triggered by high PPI reading and slowing growth, though safe-haven flows may limit deeper losses.

Gold stabilizes around the $5,380 area following some volatility during the Asian session and remains well within striking distance of the highest level since late January.

Investors this week will confront important US macro releases, scheduled at the beginning of a new month, starting with the ISM Manufacturing PMI later today. This will be followed by the ADP report on private-sector employment and the ISM Services PMI on Wednesday, and the closely-watched Nonfarm Payrolls (NFP) report on Friday. The focus, however, will remain glued to geopolitical developments, which will have a significant impact on the global risk sentiment and play a key role in driving demand for the safe-haven Gold.

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