MPC Morning Call 2nd March 2026 – Stocks set for horrible session as US/Iran Conflict ignites
There was plenty to be concerned about Friday night with Private credit fears, hot inflation and AI uncertainty. add to this the US-Israeli strikes on Iran over the weekend and the Session is in for a horrible session
WATCH ON YOUTUBE Due to increasing inaccurate AI generated financial markets news, MPC is endeavouring to verify all sources in the morning call. MPC Morning Call 2nd March 2026 – Stocks set for horrible session as US/Iran Conflict ignites Friday Night: The last session of the month saw global equities finish weaker, with US indices closing out their worst month since March last year as tech sector softness, hotter producer inflation and geopolitical concerns weighed on risk appetite. The S&P 500 fell 0.9% and the Nasdaq dropped 3.4% for February, while the Dow managed a small monthly gain, reflecting a rotation out of mega-cap tech into other sectors. Market commentators highlighted ongoing worries about AI disruption to software and services and the risk that hyperscalers’ heavy AI capex could pressure free cash flow, even as others argued that AI should ultimately broaden productivity and profitability across the market. On the macro front, US producer price inflation surprised to the upside, with headline PPI rising 0.5% month‑on‑month and 2.9% year‑on‑year, while core PPI jumped 0.8% month‑on‑month and 3.6% year‑on‑year, all above consensus. The stronger‑than‑expected print revived concerns that the Federal Reserve may delay rate cuts into the second half of the year and reinforced fears around “sticky” inflation. JPMorgan noted that the data nudged its estimate for the Fed’s preferred core PCE deflator higher, adding to a cautious tone among policymakers already worried about above‑target inflation. In credit and corporate news, stress in private credit markets resurfaced after the collapse of UK mortgage firm Market Financial Solutions, which triggered sharp share price falls in exposed lenders Barclays, Apollo, Jefferies and Wells Fargo. Creditors warned of a £930 million shortfall in collateral and alleged widespread “double pledging,” where the same assets were used to secure multiple loans, leaving an unaccounted‑for deficiency of more than 80% on £1.2 billion of debts. Elsewhere in corporate activity, Netflix rallied strongly after walking away from its bid for Warner Bros Discovery, Paramount surged on its preferred offer status, and Dell and Block both jumped on AI‑related catalysts, underscoring how company‑specific AI themes continue to drive dispersion despite broader market weakness Weekend: Over the weekend, the conflict escalated dramatically with a coordinated US‑Israeli strike campaign on Iran followed by Iranian retaliation across the region. In the early hours of 28 February (Tehran time), joint airstrikes hit Iranian military bases, missile sites, nuclear facilities and leadership compounds around Tehran, including the state broadcaster and key military infrastructure. By late Saturday, Iranian state media and US/Israeli leaders confirmed the killing of Supreme Leader Ayatollah Ali Khamenei and senior IRGC figures, prompting Iran to declare 40 days of mourning and form a temporary leadership council, while launching initial missile and drone attacks on Israel and US‑linked Gulf targets. Through 1 March, Iran fired further waves of missiles and drones at Israel and Gulf states, killing civilians in Israel, striking areas in Dubai and Abu Dhabi, disrupting airports and ports across the Gulf, damaging or sinking tankers near the Strait of Hormuz, and prompting the UAE to close its Tehran embassy and shut Abu Dhabi and Dubai stock markets for 2–3 March. The US confirmed three service members killed and additional wounded, while President Trump claimed extensive damage to Iran’s naval assets and leadership, even as missile exchanges and explosions continued into the early hours of 2 March AEDT Likely near‑term winners Oil & energy: ExxonMobil, Chevron, Occidental, Saudi Aramco on higher crude and Hormuz disruption. Defense/aerospace: Lockheed Martin, RTX, Northrop Grumman, General Dynamics, Boeing on missile/drone demand and interceptor replenishment. Tankers: Frontline, DHT, Euronav on higher spot freight and insurance rates as flows are rerouted. Safe havens: Gold miners and gold‑linked ETFs on risk‑off and inflation hedging. Likely losers Airlines & cruises: Qantas, major US/EU carriers, Carnival, Royal Caribbean, Norwegian on higher fuel, airspace closures and cancellations. Container shipping & ports: Maersk, DP World, Hapag‑Lloyd, ZIM on suspended Gulf bookings and Jebel Ali shutdown. UAE‑exposed assets: Emaar and local banks on market closures, security fears and tourism/expat risk. Broader risk assets: Global consumer discretionary, growth/tech, refiners and EM cyclicals on higher energy costs, supply‑chain stress and risk‑off rotation. Commodities, Energy & FX ASX Overnight: SPI 9150 (-0.18%) Banks will be weak, energy, defense and precious metals higher
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