Weekly Market Review - 09-03-2026

3 days ago
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This week’s Weekly Market Review highlights a more cautious tone across global markets as equities moved lower amid rising geopolitical tensions in the Middle East. We also look at the unexpected rise in Eurozone inflation, the sharp surge in oil prices driven by concerns around energy supply routes, and the latest policy signals from central banks. In addition, we explore the EU’s new long-term emissions target and the key economic data releases investors will be watching in the week ahead.

Market Recap.

Equity markets experienced a weaker week overall, with major indices moving lower amid heightened geopolitical uncertainty and increased volatility across global markets.

UK equities saw the sharpest decline, with the FTSE 100 ETF falling 4.44%, reflecting broad weakness across large-cap stocks as investor sentiment deteriorated.

US markets also moved lower over the week. The Dow Jones Industrial Average ETF slipped 0.65%, while the S&P 500 ETF declined 1.35%, suggesting broader weakness across the US equity market. Technology stocks proved relatively more resilient, with the Nasdaq 100 ETF edging down just 0.16% despite the more cautious market environment.

Overall, the week reflected a more defensive tone among investors as markets reacted to rising geopolitical tensions and increased uncertainty surrounding global economic conditions.

News.

The conflict involving Iran, Israel and the United States continues to escalate, with missile and drone strikes reported across several parts of the Middle East. Iranian attacks have targeted Israeli positions as well as US military assets and allied infrastructure in parts of the Gulf, prompting further retaliatory strikes on strategic sites inside Iran.

The escalation has also created disruption beyond the battlefield. Airspace restrictions across parts of the Middle East are still facing disruption, leaving passengers stranded and affecting major aviation routes linking Europe, Asia and the Gulf.

Given the region’s importance to global energy supply and key shipping routes such as the Strait of Hormuz, the conflict is being closely monitored by markets, with concerns that any disruption could push energy prices higher and increase broader market volatility.

Inflation.

Inflation in the Eurozone unexpectedly increased in February, highlighting the risk that price pressures may prove more persistent than previously expected. According to Eurostat’s flash estimate, annual inflation rose to 1.9% in February, up from 1.7% in January, exceeding economists’ expectations that the rate would remain unchanged.

On a monthly basis, consumer prices increased by 0.7%, marking the strongest monthly rise since March 2024. Meanwhile, core inflation, which excludes volatile energy and food prices, rose to 2.4% year-on-year, up from 2.2% previously, suggesting underlying price pressures remain relatively firm.

While inflation remains slightly below the European Central Bank’s 2% target, the unexpected increase comes at a time when rising energy prices linked to geopolitical tensions in the Middle East could create additional upward pressure on prices. As a result, policymakers and markets are watching closely to see whether the recent disinflation trend across Europe begins to stall.

Central Banks.

Recent increases in oil prices linked to escalating tensions in the Middle East are not yet expected to significantly derail the European Central Bank’s policy outlook. Dutch central bank official Olaf Sleijpen noted that while energy prices have risen, the ECB remains in a relatively “good place” regarding inflation dynamics and the broader economic outlook.

Energy costs are closely monitored by central banks because they can feed through into wider inflation, particularly through transportation and production costs. However, policymakers have indicated that the current rise in oil prices has not yet materially altered expectations for inflation across the Eurozone.

The comments suggest the ECB remains cautious but broadly confident that inflation is continuing to moderate toward its 2% target, despite the potential for geopolitical developments to create short-term volatility in energy markets.

Commodities.

Commodity markets have seen significant volatility this week, with precious metals remaining elevated while oil prices have surged sharply amid escalating geopolitical tensions.

Precious metals continue to attract safe-haven demand during periods of uncertainty. Gold is currently trading around $5,100–$5,170 per ounce, remaining near historically elevated levels despite some recent volatility, while silver is trading near $83–$84 per ounce as investors continue to favour defensive assets during heightened geopolitical risk.

In the energy complex, oil prices have moved dramatically higher. WTI crude is trading around $103–$108 per barrel, while Brent crude sits near $105–$107 per barrel, representing a substantial jump compared with levels seen just weeks ago.

The sharp rise reflects growing concern over potential disruptions to global oil supply as tensions in the Middle East escalate. Markets are particularly focused on the Strait of Hormuz, one of the world’s most important oil shipping routes, through which roughly a fifth of global oil supply normally passes. Any threat to production or transport through this corridor can quickly push prices higher as traders build a geopolitical risk premium into energy markets.

Overall, commodity markets this week reflect strong safe-haven demand supporting precious metals, while oil prices have surged to levels not seen for some time as geopolitical risk increasingly influences global energy markets.

ESG.

The European Union has formally approved a new climate target to reduce greenhouse gas emissions by 90% by 2040 compared with 1990 levels, marking a significant step in the bloc’s long-term climate strategy. The target was backed by EU member states and is intended to bridge the gap between the existing 2030 emissions reduction goal of at least 55% and the EU’s objective of achieving net-zero emissions by 2050.

The proposed target will now shape future EU climate legislation, including policies covering energy, transport, industry and carbon pricing. Policymakers argue the accelerated reduction pathway is necessary to keep the bloc aligned with the goals of the Paris Climate Agreement.

Geopolitics.

Iran has appointed Mojtaba Khamenei, the 56-year-old son of former supreme leader Ayatollah Ali Khamenei, as the country’s new Supreme Leader following his father’s death during the ongoing conflict involving Iran, Israel and the United States. The appointment was confirmed by Iran’s Assembly of Experts, the clerical body responsible for selecting the country’s highest authority.

Mojtaba Khamenei has long been viewed as an influential figure within Iran’s political establishment despite rarely holding formal public office. He is closely linked to the Islamic Revolutionary Guard Corps (IRGC) and is widely regarded as a hardline conservative cleric. Analysts suggest his leadership could signal a continuation — or potential intensification — of Iran’s current geopolitical stance.

Given the already heightened tensions across the Middle East, the leadership transition is being closely monitored internationally, with some observers warning it may reduce the prospects for de-escalation in the region in the near term.

Week Ahead.

United States

The week begins on Monday 9 March with the New York Fed Survey of Consumer Inflation Expectations, providing insight into household expectations for price growth. On Tuesday 10 March, the NFIB Small Business Optimism Index will offer a snapshot of sentiment among US small businesses. Wednesday 11 March brings the closely watched US Consumer Price Index (CPI) for February, a key inflation measure that could influence expectations for Federal Reserve policy. On Thursday 12 March, Initial Jobless Claims will provide a timely read on labour market conditions. The week concludes on Friday 13 March with the University of Michigan Consumer Sentiment Index, offering further insight into consumer confidence and inflation expectations.

United Kingdom

In the UK, attention will focus on economic activity indicators. On Friday 13 March, the Office for National Statistics will release the UK monthly GDP estimate, alongside industrial and manufacturing production figures and the UK trade balance. These releases will provide a broader snapshot of economic performance and momentum at the start of the year.

Eurozone

Across the Eurozone, markets will monitor developments in economic activity and inflation. Industrial production data due mid-week will offer insight into manufacturing conditions across the bloc. Investors will also continue to watch for commentary from European Central Bank policymakers, which may provide further signals on the outlook for inflation and interest rates.