MPC Markets Morning Call

Strait of Hormuz Interactive Infographic: https://mosaic.mpcmarkets.com.au/dashboard/content/the-1970s-oil-shocks-cpi-rates-asset-performance

Wall Street posted modest gains on Tuesday as investors attempted to look through the fog of war in the Middle East, with the S&P 500 adding 0.25% to close at 6,716, the Nasdaq up 0.47%, and the Dow barely changed. Markets remain caught between competing forces: oil firmly back above $100 a barrel, a pivotal Federal Reserve decision looming on Wednesday, a postponed US-China summit, and a Reserve Bank of Australia that delivered a second consecutive rate hike — all against the backdrop of an Iran conflict now in its third week with no ceasefire in sight.

Markets rallied to start the week as a sharp retreat in oil prices from the US$102+ highs eased fears of a full-blown energy crisis, even as the US-Israeli war on Iran entered its third week with no diplomatic off-ramp in sight. Risk assets benefited broadly, with equities, bonds, crypto, and travel stocks all advancing, while the dollar weakened. Nvidia’s US$1 trillion AI chip demand forecast added fuel to the tech rebound. However, the relief may prove fragile: Hormuz remains effectively shuttered, private credit is experiencing a wave of redemption caps, and a gauntlet of central bank meetings this week will test whether policymakers view the oil shock as transitory or a catalyst for tighter policy.

Key Takeaways

01

S&P 500 rose 1.01% to 6,699 and the Nasdaq gained 1.22% as all 11 sectors finished in the green, led by tech and consumer discretionary.

02

WTI crude fell nearly 10% from its overnight peak to US$93.50 after some tankers cleared the Strait of Hormuz and the IEA signalled additional reserve releases.

03

Nvidia CEO Jensen Huang doubled his AI chip purchase-order forecast to US$1 trillion through 2027, boosting tech sentiment across the board.

04

Private credit strain deepened as BlackRock, Blackstone, Morgan Stanley, and Blue Owl all capped or restricted fund redemptions amid rising investor withdrawals.

05

Trump called on NATO allies to help reopen the Strait of Hormuz but faced refusals from Germany, Spain, and Italy, while threatening to delay his China summit.

06

The RBA is expected to hike rates today at 2:30pm AEDT, while the US Fed begins its two-day FOMC meeting with markets pricing rates on hold.

The US–Iran conflict dominated global markets for a second consecutive week, pushing Brent crude above $100 a barrel for the first time since 2022 and triggering a broad repricing of risk assets. The energy shock is rippling across sectors from semiconductors to fertilisers, while stagflation fears are building as US GDP growth was revised sharply lower even as core inflation remains sticky at 3.1%. Central banks face an impossible balancing act this week, with the RBA, Fed, BOJ, ECB and Bank of England all meeting against a backdrop of rising oil prices, slowing growth and elevated uncertainty. Markets are now pricing the next Fed rate cut as far out as mid-2027, and the dollar has surged as the haven of choice, pressuring currencies and risk assets globally.

Key Takeaways

• Brent crude closed above $100/bbl for the first time since August 2022, surging 11% on the week as Iran’s Supreme Leader vowed to keep the Strait of Hormuz shut.

• The S&P 500 extended its losing streak to three weeks, now sitting 5% below its January record, with global stocks down 5.5% since the war began.

• US Q4 GDP was revised sharply lower to 0.7% annualised growth while core PCE inflation held at 3.1% y/y, fuelling stagflation concerns.

• Fed rate-cut expectations have collapsed to just 20bps for 2026, with the next cut now priced for mid-2027, as the dollar hit fresh year-to-date highs.

• The IEA committed a record 412 million barrels from emergency reserves, while the US issued a 30-day waiver on sanctioned Russian oil purchases to ease supply pressures.

• Five major central bank decisions this week (RBA, Fed, BOJ, ECB, BoE) will be pivotal in shaping the market’s rates and growth outlook amid the energy crisis.

Overnight markets were dominated by a sharp escalation in the Iran war, with Brent crude breaching $100 for the first time since 2022 after Iran’s new supreme leader vowed to keep the Strait of Hormuz closed. The IEA declared the conflict the largest oil supply disruption ever. US equities sold off broadly, with the S&P 500 falling 1.5% and private credit stress compounding the risk-off mood. Bond yields surged globally as traders abandoned 2026 Fed rate cut expectations entirely, and the US dollar strengthened to a two-month high. Friday’s US PCE inflation print and next week’s packed central bank calendar are the next major catalysts.

Key Takeaways

• Brent crude surged 9.2% to close above $100/bbl – the highest since August 2022 – as the IEA declared the Iran conflict the largest oil supply disruption in history.

• Iran’s new supreme leader Mojtaba Khamenei vowed to keep the Strait of Hormuz closed and threatened to open new fronts if the US-Israeli campaign persists.

• The S&P 500 fell 1.5%, the Dow dropped 1.6%, and the Nasdaq shed 1.8%, with private credit concerns at Morgan Stanley, JPMorgan, and Deutsche Bank adding to the selloff.

• 2026 Fed rate cut expectations have been fully priced out; the US 2-year yield hit its highest since August as global bonds erased this year’s gains.

• The AUD was the worst G10 performer (down 1%), and the ASX 200 is down 3.5% over five days with the RBA rate decision looming next week.

• Friday’s US PCE inflation data is the key catalyst ahead, with analysts warning a hot print could amplify fears of an energy-driven stagflation shock.

Markets are caught between backward-looking inflation relief and forward-looking energy anxiety. February’s in-line CPI would have been a clear positive in a normal environment, but the Iran war has made it largely irrelevant as oil prices surge past $87 and the Strait of Hormuz remains closed. The IEA’s record 400-million-barrel reserve release failed to cap prices, signalling that only a military de-escalation can sustainably ease the energy crunch. Oracle’s strong AI-driven results provided a rare bright spot, but broader corporate and macro risk remains elevated. The Fed is now boxed in—employment is weakening, but energy-led inflation threatens to reignite—leaving markets to price a single rate cut at best this year. 

Oil markets endured their most volatile session in years as crude crashed more than 10% before partly recovering, driven by conflicting signals from the White House over Strait of Hormuz operations and intelligence reports of Iranian mine-laying activity. US equities lagged a global rally, with the S&P 500 slipping 0.2% while Asian and European markets surged. China's exports boomed at 22% growth in early 2026, dwarfing expectations. The Australian dollar hit a three-year high after the RBA's deputy governor warned of "toxic" inflation risks, with markets now pricing a majority chance of a rate hike next week. Oracle's strong earnings beat after hours offered a bright spot for tech sentiment. All eyes turn to US CPI data on Wednesday for clues on the inflation and rate outlook.

Key Takeaways

• Oil plunged over 10% in its biggest one-day fall since 2022, with WTI settling near $86.73 amid extreme volatility tied to conflicting White House messaging on Strait of Hormuz operations.

• US equities lagged the global rally — the S&P 500 fell 0.2% while South Korean stocks surged 6% and European benchmarks rose up to 3%.

• Oracle beat expectations after the bell, with cloud infrastructure revenue up 84% and fiscal year 2027 revenue guidance of $90 billion, sending shares up ~7% in extended trading.

• China's exports surged 22% in the first two months of 2026, with the January–February trade surplus reaching $213 billion, potentially on track to break last year's record.

• The Australian dollar hit a three-year high of US71.70¢ after RBA Deputy Governor Hauser's hawkish warning on inflation, with markets now pricing a 62% chance of a March rate hike.

• US February CPI due tonight (11:30pm AEDT) is the key data event, with Goldman Sachs forecasting a below-consensus core reading of 0.17% month-on-month.

Global markets endured extreme volatility overnight as the Iran conflict entered its 10th day — oil briefly touching US$120 before crashing back below US$88 — but stocks and bonds staged a dramatic reversal after Trump signalled the war was "very complete," leaving the week's US CPI print as the next major flashpoint.

6 Key Takeaways

• The S&P 500 recovered from a 1.5% intraday loss to close up 0.8% after Trump told CBS the Iran war was "very complete, pretty much" and the military campaign ahead of its planned timeline.

• WTI crude collapsed from above US$119 to below US$86 in a single session — one of the largest intraday swings on record — as de-escalation hopes eased supply-disruption fears.

• 10-year US Treasury yields pulled back to ~4.09% after spiking to 4.21%, while Fed rate cut expectations remain firmly anchored to September at the earliest, with some options markets pricing no cuts at all in 2026.

• Saudi Arabia preemptively shut multiple offshore oilfields, potentially reducing output by more than 2 million barrels per day, keeping medium-term energy supply risk elevated regardless of near-term diplomacy.

• BlackRock became the first major manager to cap redemptions on a private credit perpetual vehicle, triggering an industry-wide debate about liquidity mismatches as US private credit defaults climbed to a record 5.8%.

Global markets endured their worst week in months as the US–Israel–Iran conflict drove oil prices to multi-year highs — with WTI up over 35% in five days — while a shockingly weak February nonfarm payrolls report (-92,000 jobs) compounded stagflation fears. Stocks, bonds and traditional safe havens all fell in tandem, breaking the typical crisis playbook and leaving investors with few places to hide except energy. The ASX is set for a cautious open, with Wednesday's US CPI print and ongoing geopolitical developments the key focus for the week ahead.

Key Takeaways

• The S&P 500 posted its worst weekly performance since October, falling approximately 2% as the Middle East conflict and a weak jobs report hit sentiment simultaneously.

• US WTI crude surged 35.63% over the week — its biggest-ever weekly gain — with Brent rising to US$92.88 per barrel on fears the Strait of Hormuz could be disrupted.

• February US nonfarm payrolls unexpectedly shed 92,000 jobs against forecasts for a gain of 58,000, raising the unemployment rate to 4.4% and stoking stagflation concerns.

• Stocks and bonds fell together — the opposite of the usual crisis playbook — as oil-driven inflation fears pushed Treasury yields higher, rendering traditional diversification strategies ineffective.

• BlackRock's HPS private-credit fund enforced redemption limits on its $26 billion vehicle, amplifying stress across the broader $1.8 trillion private credit market and sending BlackRock shares down 7.7%.

• Investors piled into inflation-protected securities (TIPS) and CPI swaps, with one-year inflation swap rates surging to near 2.9%, as markets priced in a sustained energy-driven inflation shock.

MPC Markets Morning Call, the host notes only modest overnight market weakness despite escalating oil prices and Strait of Hormuz disruptions, praising US indices for their resilience and the software sector for its consistent outperformance; he highlights positive earnings beats from Broadcom and Berkshire Hathaway, spotty retail results, and the death of the “Sasspocalypse” narrative, while promoting an updated interactive 5-pillar AI/software framework, a new enhanced-growth investment in three pairs of software stocks, the Mosaic platform, and tonight’s Bulls vs Bears wrap-up.

7 Key Takeaways

1. US indices posted only minor weekly losses (S&P 500 down 1 %, Nasdaq down 0.06 %) and recovered overnight despite broader negativity.
2. The software sector remained bright green and resilient no matter what the rest of the market was doing.
3. Broadcom jumped 5 % on strong earnings while Nvidia was flat as semiconductor export restrictions are already priced in.
4. Berkshire Hathaway rose 2.6 % after its new CEO pledged to invest every dollar of his expendable income into the fund.
5. Crude oil surged 24 % this week (80 % over 12 months) on Strait of Hormuz disruptions, creating buying opportunities in lithium and uranium.
6. The “Sasspocalypse” narrative is officially dead after seven straight sessions of Nasdaq outperformance totalling 12.3 %.
7. MPC Markets is offering an enhanced-growth investment in three pairs of software stocks across healthcare, ERP, and cybersecurity, with a dedicated webinar next week on the interactive 5-pillar framework.

AI Threat Heatmap:https://www.mpcmarkets.com.au/ai-thre...Software Survivors Webinar Sign Up:https://bit.ly/SaasSurvivorsDaily markets briefing for Thursday 5 March 2026. Finn breaks down a broadly positive overnight session — Nasdaq up 1.29%, S&P 500 up 0.78%, with Amazon, Tesla, and Meta leading the charge. We run through the Software Survivors basket including CRWD up 4%, PANW up 1.5%, and VEEV's surprise after-hours earnings beat of 10.29%. Plus updates on the ERP basket, WiseTech, and what to expect from Pro Medicus on the ASX today.We also cover crude oil's massive 15% five-day run driven by Strait of Hormuz disruptions, Bitcoin's 7% bounce and our dollar-cost averaging strategy down to $45K, and a quick look at commodities including platinum's 4.48% move.Finn also introduces the MPC Software Survivors AI Disruption Heatmap — our proprietary model identifying which tech companies will thrive in the AI era and which will be left behind. Join our upcoming webinar for a full walkthrough and live Q&A.