Weekly Market Review - 02-03-2026

Mar 2
5 min read

Markets began March with a firmer tone, as improving risk appetite supported UK equities and a rebound in technology shares, even as geopolitical tensions in the Middle East introduced fresh uncertainty. Alongside steady disinflation trends in the US and renewed volatility in commodity markets, this week’s developments highlight the delicate balance between economic resilience and evolving global risks.

Market Recap.

Equity markets delivered a mixed but generally constructive performance over the week, with strength in the UK and technology shares offsetting more modest moves elsewhere.

UK equities continued their recent momentum, with the FTSE 100 ETF rising again by 2.20%. The advance reflects sustained demand for large-cap stocks and ongoing support from internationally exposed companies within the index.

In the US, performance was more varied. The Dow Jones Industrial Average ETF slipped 0.54%, indicating some softness in more traditional industrial names. However, broader market sentiment remained positive, with the S&P 500 ETF advancing 0.89%. Technology shares also moved higher, as the Nasdaq 100 ETF climbed 1.38%, suggesting renewed investor confidence in growth-oriented sectors.

Overall, the week reflected improving risk appetite, though gains were more selective across regions and sectors.

News.

Air travel across the Middle East has faced significant disruption after Iranian strikes forced the temporary closure of several major airports, including Dubai and Doha. Thousands of passengers have been left stranded as flights were cancelled, diverted or delayed, with airlines suspending routes across parts of the region while airspace safety is reassessed.

The closures follow an escalation in military exchanges over the weekend involving Iran, Israel and US forces. Given the region’s role as a major global aviation hub linking Europe, Asia and Australasia, the disruption has had knock-on effects for international travel, including services to and from the UK.

While operations are gradually resuming in some areas, the situation remains fluid and subject to further change as developments continue.

Inflation.

Inflation remains a central issue in the United States, with affordability continuing to weigh on households despite a broader moderation in headline price growth. Recent data show US consumer price inflation running at approximately 2.40% year-on-year, down significantly from the peaks seen in 2022, but still above the Federal Reserve’s 2.00% target.

While wage growth has remained relatively firm, higher borrowing costs and cumulative price increases over recent years continue to affect household purchasing power. Food prices remain elevated compared with pre-pandemic levels, and energy costs — now subject to renewed geopolitical volatility — present an additional upside risk.

Although the overall disinflation trend remains intact, the persistence of affordability pressures suggests that inflation dynamics are still influencing consumer confidence and, by extension, the broader economic outlook.

Central Banks.

The Deutsche Bundesbank and the European Commission have launched a new EU-funded programme aimed at strengthening central banking and supervisory capacity in the Western Balkans. The initiative, backed by €3 million in funding, will support institutions in aligning their frameworks more closely with European System of Central Banks standards.

The programme will focus on areas including anti-money-laundering controls, cyber risk, digitalisation and payment systems, with the aim of enhancing analytical and policy tools across participating central banks and supervisory authorities.

As the Bundesbank noted, the initiative is intended to “further strengthen the institutional capacities of beneficiary institutions” and align national practices with European standards.

Commodities.

Commodity markets saw notable recent strength in precious metals, while energy prices reflected heightened geopolitical risk.

Precious metals remain elevated amid safe-haven demand. Gold is trading around $5,400 per ounce, supported by risk-off sentiment amid ongoing Middle East tensions, while silver has lifted to near $95 per ounce as investors seek refuge in hard assets.

In the energy complex, crude oil prices have moved higher following disruptions to key shipping routes in the Middle East. WTI crude is trading around $72–$73 per barrel, and Brent crude sits near $78–$80 per barrel, levels that reflect renewed supply-risk pricing as markets assess potential impacts on global flows.

Overall, both metals and oil prices have been influenced by broader geopolitical developments this week, with oil incorporating a clearer risk premium while precious metals remain supported by haven flows.

ESG.

Regulatory momentum around sustainability and product transparency continues to build in the European Union, with Digital Product Passports (DPPs) set to become a central component of the bloc’s ESG framework. While phased implementation begins in 2026, this year is widely viewed as the point at which companies must begin substantive preparation.

Digital Product Passports will require detailed, standardised data on a product’s environmental footprint, materials, durability, reparability and recyclability, forming part of the EU’s broader Ecodesign for Sustainable Products Regulation. The initiative is designed to improve transparency across supply chains, strengthen circular economy practices and reduce greenwashing risks by embedding verifiable sustainability data directly into products.

For businesses operating within or exporting to the EU, the development signals a shift from voluntary ESG disclosure toward operationalised, product-level sustainability reporting, increasing both compliance requirements and data governance expectations.

Geopolitics.

The situation in the Middle East remains highly fluid following the escalation of direct exchanges between Israel, Iran and US forces over the weekend, with hostilities now extending across multiple fronts including Lebanon and parts of the Gulf. Hezbollah has launched strikes into northern Israel, prompting retaliatory action, while Iranian-aligned groups have targeted US assets in the region. Diplomatic tensions have also risen, with several Gulf states responding formally to cross-border incidents. The UK government has urged restraint and is closely monitoring developments, including potential implications for British nationals and energy security, while reinforcing regional military assets as a precautionary measure. Given the strategic importance of the region to global trade and oil supply, the conflict continues to represent a significant geopolitical risk, and developments are evolving rapidly.

Week Ahead.

United States

The week begins on Monday 2 March with the release of key Purchasing Managers’ Index (PMI) data including the ISM and S&P Global Manufacturing PMIs, early indicators of business activity and momentum. Wednesday 4 March sees the ADP Employment Change report, which offers a preliminary look at labour market trends ahead of the official figures. On Thursday 5 March, weekly Initial Jobless Claims will provide a timely read on the labour market. The week concludes on Friday 6 March with the February Nonfarm Payrolls report, alongside the unemployment rate and average hourly earnings, central components of the US Employment Situation that help shape expectations for monetary policy. The payrolls release is traditionally scheduled for the first Friday of the month.

United Kingdom

In the UK, the week begins on Monday 2 March with the final S&P Global UK Manufacturing PMI for February, giving an updated snapshot of the factory sector’s performance. On Wednesday 4 March, the S&P Global UK Construction PMI is due, followed by the S&P Global UK Services and Composite PMIs on Friday 6 March, which together track activity in services, a key driver of the UK economy.

Eurozone

Across the Eurozone, Monday 2 March will bring final S&P Global Eurozone Manufacturing PMI data for February, while Wednesday 4 March will see release of Eurozone Services and Composite PMIs. These surveys help gauge broader economic momentum across member states. Later in the week, additional data such as retail sales and flash inflation indicators are expected to provide further context to the European Central Bank’s outlook.