MPC Morning Call 6th March 2026 – Chip stocks and Oil drive market lower
modest overnight market weakness despite escalating oil prices and Strait of Hormuz disruptions, praising US indices for their resilience and the software sector for its consistent outperformance; he highlights positive earnings beats from Broadcom and Berkshire Hathaway…
MPC Morning Call 6 th March 2026 – Chip stocks and Oil drive market lower Equity markets U.S. stocks ended lower on Thursday but closed well off their intraday lows, as the escalating conflict with Iran pushed oil prices higher and reignited inflation concerns while weakness in semiconductor shares added pressure following reports of draft rules to restrict AI chip exports. The S&P 500 fell 0.6%, the 10‑year Treasury yield rose four basis points to 4.13%, and the dollar gained 0.4%, reflecting a global bond selloff and renewed haven demand. Even so, U.S. equities have recently outperformed the rest of the world by the widest margin since April, supported by the U.S. position as a net oil exporter and relatively greater resilience versus energy‑importing regions. Iran/US/Strait of Hormuz Iran has launched a fresh wave of missile and drone attacks across the Gulf, hitting or threatening targets in the UAE, Bahrain, Qatar, Kuwait and Azerbaijan; Bahraini refinery infrastructure has been damaged, there have been explosions near Abu Dhabi’s airport, and widespread airspace closures are severely disrupting regional air travel. Tehran has also targeted U.S. forces in Iraq and Kuwait and struck an oil tanker in the Persian Gulf, while the U.S. and Israel continue airstrikes on Iranian military and intelligence assets; more than 1,230 people have been killed in Iran and dozens elsewhere, and the Revolutionary Guard has warned that retaliatory attacks will intensify. Traffic through the critical Strait of Hormuz has been effectively closed after Iran targeted tankers, forcing Saudi Arabia to divert millions of barrels of crude to its Red Sea port, while China is in talks with Iran to secure safe passage for crude and LNG shipments through the chokepoint. Summary of Trump announcements, soundbites President Donald Trump has stressed that the U.S. has an “unlimited supply of weapons,” signalling his readiness to sustain a prolonged campaign against Iran. He told Axios that he should personally be involved in selecting Iran’s next supreme leader and that Mojtaba Khamenei would be “unacceptable” as a successor, highlighting his intent to influence post‑Khamenei leadership dynamics. The administration is also considering sweeping regulations that would require U.S. approval for virtually all AI accelerator chip exports globally, effectively positioning Washington as a gatekeeper for AI infrastructure and potentially turning export licenses into a diplomatic and trade lever. Ironically, the Iran war is now undermining Trump’s earlier market objectives of lower oil prices, lower Treasury yields and a weaker dollar, as the conflict‑driven spike in oil and yields and the stronger dollar risk constraining his economic agenda in a midterm year that is heavily focused on affordability. Private Credit In private credit, BlackRock TCP Capital abruptly marked a roughly $25 million private loan to Infinite Commerce Holdings down from par to zero within three months, after previously merging and restructuring debt exposures tied to Amazon aggregators Infinite Commerce and Razor Group. This sudden par‑to‑zero move, alongside earlier write‑downs on borrowers such as Zips Car Wash and Renovo Home Partners, underscores a key faultline in private credit: the lag between reported valuations on illiquid loans and the rapid deterioration in the underlying companies’ fundamentals amid a prolonged period of higher interest rates. The episode is feeding mounting concerns over defaults and underwriting standards in the $1.8 trillion private credit market, where large exposures to pandemic‑era growth stories and software companies now pressured by AI have fueled heightened redemption demands, including a record 7.9% redemption allowance at a flagship Blackstone private credit fund. While leading managers continue to post relatively strong returns, industry leadership is split, with Apollo’s CEO warning of an impending shakeout in private credit firms, while Ares’ CEO dismisses projections such as UBS’s call for default rates to reach 15% as “absolutely wrong.” Looking Ahead: key Payrolls numbers tonight Into tonight’s nonfarm payrolls report, the pre‑release data point to a still‑firm labor market: jobless claims remain near the lowest levels of the past year in what is described as a “low‑firing” environment, Challenger job cuts dropped sharply in February to 48,307 from 108,435 in January, and initial claims held steady at 213k, slightly better than the 215k expected. Expectations in the document are for hiring to moderate from January’s strong pace while unemployment holds steady; a stronger‑than‑expected print would be seen as constructive given rising inflation expectations from higher energy prices, whereas a softer figure would support additional rate‑cut pricing but raise near‑term stagflation risk. Against a backdrop of robust services PMI and an upbeat Beige Book, markets have already been pricing out an early‑2026 Fed cut…
Read on MPC Markets Mosaic
