Today’s Outlook :
• US MARKET : U.S. stocks closed in negative territory on Tuesday, though well off their session lows, as the widening conflict in the Middle East heightened concerns over slowing economic growth. The retail sector was also in focus after Target posted solid results. The benchmark S&P 500 index fell 0.9% to 6,817.13, after earlier plunging as much as 2.5%. The tech-heavy NASDAQ Composite declined 1% to 22,516.69, trimming losses from an intraday low of 2.7%. Meanwhile, the Dow Jones Industrial Average slipped 0.8% to 48,501.27, after earlier falling as much as 2.6%.
Sentiment deteriorated despite a relatively positive close on Monday, amid fears that the Middle East conflict is expanding. The U.S. Embassy in Riyadh was hit by Iranian drones, as were Amazon data centers in the United Arab Emirates and Bahrain, as part of Iran’s retaliatory actions across several neighboring countries. On Tuesday, the U.S. State Department ordered the departure of non-emergency government personnel and family members from Bahrain, Iraq, and Jordan. The U.S. and Israel launched an air campaign against Iran on Saturday, striking Tehran and killing Iran’s Supreme Leader, Ali Khamenei. In response, Iran and its proxy Hezbollah carried out retaliatory attacks, drawing the Gulf region into an escalating conflict.
In his first public appearance since the attacks began, President Donald Trump said “we’re already substantially ahead of our time projections,” but added that “whatever the time is, it’s okay—whatever it takes.” He later claimed on social media that the U.S. has a “virtually unlimited” supply of certain types of weapons.
Inflationary shock stemming from the conflict is a major concern for investors, especially as oil prices surged sharply on fears of supply disruptions. Markets worry that a sustained rise in oil prices could drive up global inflation and prompt a more hawkish stance from major central banks.
• EUROPEAN MARKET : European stocks fell on Tuesday, weighed down by the ongoing Middle East conflict and an unexpected rise in eurozone inflation in February. Germany’s DAX dropped 3.6%, France’s CAC 40 slid 3.5%, and the U.K.’s FTSE 100 fell 2.8%. The pan-European STOXX 600 sank 3.1%, nearing its 2026 lows.
• ASIAN MARKET : Most Asian markets weakened further on Tuesday as hostilities between the U.S., Israel, and Iran showed no signs of easing. South Korean markets led losses in catch-up trading after a long weekend. Declines in China were relatively limited as investors awaited stimulus signals from upcoming economic policy meetings, while Hong Kong was supported by gains in energy and technology shares. Airline and tourism stocks fell across Asia, while energy stocks advanced in line with rising oil prices.
South Korea’s KOSPI was the worst performer, plunging 4.3% after the long weekend, also pressured by profit-taking following strong performance in February. Tech heavyweights SK Hynix and Samsung Electronics, along with automaker Hyundai Motor—previously buoyed by AI optimism—fell between 5% and 8%.
In Japan, the Nikkei 225 and TOPIX each dropped more than 2%, with mixed domestic data adding to uncertainty. Capital spending surged in the fourth quarter, signaling some growth resilience, but separate data showed the unemployment rate unexpectedly rose in January.
Across the broader region, China’s CSI 300 and Shanghai Composite indexes declined by a smaller margin, around 0.2% each. Market focus is squarely on the annual “two sessions” political meetings scheduled for March 4–11.
• COMMODITIES: Oil prices settled up 4.7% on Tuesday—the highest since January 2025—as intensifying U.S.-Israel conflict with Iran disrupted energy shipments from the Middle East and fueled fears of a prolonged conflict. Brent crude rose USD 3.66 (4.7%) to USD 81.40 per barrel, its highest since January 2025. U.S. WTI crude gained USD 3.33 (4.7%) to USD 74.56, the highest since June.
Israeli and U.S. forces struck targets across Iran on Tuesday, prompting Iranian retaliatory attacks around the Gulf and extending to Lebanon. Iraq—the secondlargest oil producer in OPEC after Saudi Arabia—cut production by nearly 1.5 million barrels per day, with the potential for deeper cuts due to limited storage capacity. Iran also targeted regional energy infrastructure and tankers in the Strait of Hormuz, a route that typically carries about one-fifth of the world’s oil and LNG supply. Many tankers and container ships are avoiding the strait after insurers withdrew coverage and shipping rates surged, compounded by Iranian media reports that any vessel attempting to pass would be fired upon.
• INDONESIA : The JCI closed lower again, slipping below the level to 7,939.77, as markets digested Iran’s continued retaliatory actions. In light of the escalation, investors are advised to hedge positions and maintain exposure to commodity-sector stocks, which are expected to remain a key trading theme this year amid rising prices for oil, gold, and nickel. Following successful breakouts in oil and gas, coal prices have also begun to break out, potentially offering upside for coal-related stocks. Investors are reminded to remain cautious, using tight stop-losses and trailing stops amid ongoing volatility.
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