As we move deeper into 2026, global markets are contending with the sudden outbreak of war involving the US, Israel, and Iran, compounding mixed U.S. economic data and persistent inflation signals. This week’s Macro Monitor focuses on recent data releases, the conflict's immediate repercussions, and its effects on energy and broader market dynamics. Equities endured significant declines, Treasury yields swung amid inflation worries, and commodities—especially oil—surged on geopolitical fears.  

Market Overview  

U.S. equities plunged amid the intensifying Middle East conflict, with the Dow dropping 400 points at close after intra-day losses exceeding 1,200 points on Monday, reflecting heightened volatility from the war's onset.¹ S&P 500 sectors like materials, industrials, and consumer discretionary led the downturn, each falling over 2%, as concerns mounted over rising energy costs and potential economic drag.² Bond markets saw Treasury yields initially climb on rekindled inflation fears before trimming advances, while commodities rallied, with crude oil leading the charge due to risks in key supply routes.³  

Key Economic Releases  

This week's data painted a picture of manufacturing resilience offset by hotter inflation readings and easing borrowing costs.  

• February 2026 ISM Manufacturing PMI: Released March 2, the index advanced to 52.4 from January's 51.3, the highest in months, with gains in new orders and production underscoring sector expansion.⁴
• February 2026 S&P Global Manufacturing PMI Final: Registered at 51.6, a slight downward revision from preliminary estimates but still above the 50 expansion threshold.⁵  
• Producer Price Index (PPI): Core PPI rose 0.8% month-over-month and 3.6% year-over-year, exceeding forecasts and stoking concerns about sticky inflation, potentially delaying Federal Reserve rate cuts.⁶
• Mortgage Rates: The average 30-year fixed rate declined to 5.98% as of February 26, dipping below 6% for the first time since mid-2022, which could stimulate housing activity amid broader economic cooling.⁷
• February 2026 LMI Logistics Managers Index: Climbed to 61.5, well above expectations, indicating robust growth in transportation and inventory metrics.⁸
• Other notes include upcoming releases like Q4 2025 Productivity and Costs on March 5, which may provide further insight into labor efficiency trends.⁹

Upcoming Labor Market Data  

Investors will closely watch Friday's release of the February nonfarm payrolls report, which follows January's stronger-than-expected 130,000 job gain. Consensus forecasts point to a more modest increase of around 60,000 jobs added, with the unemployment rate expected to remain steady at 4.3%.¹⁰ The focus will likely be on the composition of any gains, potential revisions to prior months, and whether the labor market's apparent stabilization in January proves durable amid ongoing geopolitical and inflationary pressures. A result in line with or below expectations could reinforce caution around Fed policy timing, while a surprise to the upside might further temper rate-cut hopes.  

Geopolitical Tensions  

The war between the US, Israel, and Iran, ignited on February 28 with U.S.-Israeli strikes on Iranian targets, has swiftly reverberated through global markets. Brent crude surged $10 per barrel to just under $80, driven by threats to the Strait of Hormuz, through which about 20% of world oil and LNG flows.¹¹ Prolonged escalation could push prices toward $100, inflating global costs by 0.6-0.7 percentage points and risking a growth slowdown or even recession if disruptions persist.¹² Energy equities gained amid the rally, but broader stock markets in the U.S., Europe, and Asia tumbled 1-2%, with Gulf exchanges mixed or suspended due to the conflict's regional spillover.¹³ Analysts warn of heightened volatility, with potential for defensive sectors to outperform if oil's risk premium—currently around $14 per barrel—endures.¹⁴ These developments echo past conflicts, amplifying uncertainty in an already tariff-sensitive environment.

Outlook  

With manufacturing holding firm, and mortgage rates easing, the U.S. economy exhibits pockets of strength, but the Iran conflict introduces substantial risks to energy stability, inflation, and growth. If hostilities persist, oil-driven pressures could offset recent progress. This is the time to rely on a long term plan and diversified, quality-focused portfolios to weather the political and military storm.  

Best regards,  

Richard Barnett

Chief Investment Officer  

‍

Footnotes:  

1. CNBC, "Dow closes down 400 points after falling as much as 1200 points as Iran conflict volatility continues: Live updates," March 2, 2026, https://www.cnbc.com/2026/03/02/stock-market-today-live-updates.html

2. CNBC, "Dow closes down 400 points after falling as much as 1200 points as Iran conflict volatility continues: Live updates," March 2, 2026, https://www.cnbc.com/2026/03/02/stock-market-today-live-updates.html

3. Center on Global Energy Policy at Columbia University, "US-Israeli Attacks on Iran and Global Energy Impacts," March 2, 2026, https://www.energypolicy.columbia.edu/us-israeli-attacks-on-iran-and-global-energy-impacts

4. Trading Economics, "United States Calendar," March 3, 2026, https://tradingeconomics.com/united-states/calendar

5. Trading Economics, "United States Calendar," March 3, 2026, https://tradingeconomics.com/united-states/calendar

6. SWBC Investment Hub, "Market Commentary: Week of March 3, 2026," March 2, 2026, https://blog.swbc.com/investmenthub/market-commentary-week-of-march-3-2026

7. Federal Reserve Economic Data (FRED), "30-Year Fixed Rate Mortgage Average in the United States," February 26, 2026, https://fred.stlouisfed.org/series/MORTGAGE30US

8.Trading Economics, "United States Calendar," March 3, 2026, https://tradingeconomics.com/united-states/calendar

9. U.S. Bureau of Labor Statistics, "Schedule of Selected Releases for March 2026," March 3, 2026, https://www.bls.gov/schedule

10. Reuters, "Take Five: Payrolls - Hot streak or head fake?," February 27, 2026, https://www.reuters.com/business/take-five/global-markets-themes-graphic-2026-02-27; Brown Brothers Harriman, "Drivers for the Week of March 2, 2026," March 2, 2026, https://www.bbh.com/us/en/insights/blog/mind-on-the-markets/Drivers-for-the-Week-of-March-2-2026.html

11. Center on Global Energy Policy at Columbia University, "US-Israeli Attacks on Iran and Global Energy Impacts," March 2, 2026, https://www.energypolicy.columbia.edu/us-israeli-attacks-on-iran-and-global-energy-impacts

12. Reuters, "How US-Iran tensions could shape world markets," February 28, 2026, https://www.reuters.com/business/energy/how-us-iran-tensions-could-shape-world-markets-2026-02-28

13. The New York Times, "Global Markets Whipsaw After U.S.-Israel Attack on Iran," March 2, 2026, https://www.nytimes.com/2026/03/01/business/stock-market-iran-war-fallout.html

14. Goldman Sachs, "How Will the Iran Conflict Impact Oil Prices?," March 3, 2026, https://www.goldmansachs.com/insights/articles/how-will-the-iran-conflict-impact-oil-prices

Researched and compiled with the assistance of Grok4. This newsletter represents our opined general assessment of the market environment at a specific time and is not intended to be a forecast or guarantee of future performance or results. The opinions and statements expressed are intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities or investment strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. This material may contain estimates and forward-looking statements, which may include forecasts and do not represent a guarantee of future performance. This information is not intended to be complete or exhaustive and no representations or warranties, either express or implied, are made regarding the accuracy or completeness of the information contained herein. The opinions expressed are as of March 3, 2026, and are subject to change without notice. Investing involves risks. Past performance is not a reliable indicator of current or future results, and index returns do not account for fees. It is not possible to invest directly in an index.  

Investment advisory and wealth management services are offered through Highline Wealth Partners, an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training and does not guarantee investment performance.