March 02, 2026 – U.S. stock futures tumbled more than 1% on Monday. The sell-off followed weekend military strikes by the United States and Israel against Iran. Investors rushed into safe-haven assets as geopolitical risk hit its highest point in years.
Crude oil prices surged roughly 8% in early trading. The spike raised immediate concerns about an inflation rebound. A prolonged energy shock could delay any Federal Reserve rate cuts planned for 2026.
Sector Winners and Losers
Defense stocks emerged as clear winners. Lockheed Martin and RTX each jumped about 6% in premarket trading. Oil giants Occidental Petroleum and ConocoPhillips also gained over 6%.
Airlines bore the brunt of the losses. Delta and United Airlines fell more than 5% each. Cruise operators Carnival and Royal Caribbean dropped roughly 6% amid fears of higher fuel costs.
Gold climbed about 2%, reinforcing its role as the ultimate crisis hedge. The U.S. 10-year Treasury yield briefly touched an 11-month low as bond prices rallied.
Inflation Risk Takes Center Stage
The conflict’s timing is particularly damaging for markets. Investors were already grappling with a hot inflation print. The S&P 500 and Nasdaq had just posted their steepest monthly declines since March 2025.
Wells Fargo’s chief equity strategist warned the S&P 500 could fall to 6,000. That worst-case scenario assumes crude prices breach $100 per barrel. It would represent a roughly 13% decline from the last close.
President Trump indicated military operations could last another four weeks. That timeline raises the stakes for energy markets and global supply chains. Investors now face a dangerous mix of geopolitical risk, sticky inflation, and monetary policy uncertainty.
What to Watch This Week
Key economic data could amplify volatility this week. Manufacturing PMI figures are due Monday. Retail sales, ADP employment, and non-farm payrolls follow in the days ahead. Each release will be viewed through the lens of rising geopolitical pressure.
