Weekly Market Outlook 2026/03/01
Hello traders,
I hope you all have had a good weekend.
First of all wishing peace and safety to my Middle-East/West Asia subscribers.
Yesterday US and Israeli forces attacked Iran and in the process eliminated top brass of IRGC and Ayatollah Khamenei. This has caused oil to spike in the early markets to about 8-10%. If the Strait of Hormuz stays impacted, crude can easily go to 90-100 per barrel.
Our idea to long oil through USO spreads into the week would likely work out well. However, since the options do not open until 9:30 am Monday, today’s globex session is key.
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Recapping last week’s trades
THE TIMELINE SO FAR AND WHAT IS NEXT
Feb 27, 2026: US-Iran talks in Geneva ended without any deal. Right after the talks, US authorized departures of non-essential Federal workers from Israel.
Feb 28th, 2026: US and Israel struck Iran with missiles and then Iran instantly retaliated by attacking US assets in neighboring countries like UAE, Qatar, Saudi Arabia, Bahrain and Oman. US also announced that Ali Khamenei was targeted and killed in a missile attack on his compound.
March 1, 2026: US strikes continue with attacks on Iranian Naval bases and ships with President Trump sharing it on his social media platform TruthSocial.
Readers, I’m gonna be honest here. I’m not a geopolitics expert. I can code and trade but I definitely do not know how this conflict is going to end . Past US attempts at installing Democracies failing in the region do not necessarily mean this one will also end up the same way.
However, these are three second-order effects that I believe are possible if this conflict extends beyond a few weeks.
Inflation expectations will start perking up based on Hormuz escalation. Crude spiking to 90 will first hit PPI and then passhtrough to CPI in a month or two, especially in the transport sector. Another concern is that the inflation might become “sticky” and even if crude prices go down, the CPI might stay higher for a while (primarily as companies would want to make as much profit as possible due to tariff uncertainity)
