New York, March 2, 2026, 12:33 EST — Standard session
The Dow Jones Industrial Average reduced its earlier losses on Monday, although it remained in negative territory as investors responded to a surge in oil prices due to the ongoing conflict in the Middle East. By 12:25 p.m. EST, the index had declined by 0.14% to 48,907.26. MarketScreener
Market Response to Oil Surge
Currently, the focus is on inflation. Oil prices have jumped over 5%, a rise that is expected to quickly impact gasoline and shipping costs—heightening the risk that easing price pressures may falter, particularly as investors anticipate the possibility of interest-rate reductions. wplg
The future hinges on whether the supply crunch intensifies around the Strait of Hormuz, a crucial passage for nearly 20% of the globe’s oil. William Jackson from Capital Economics estimates that a prolonged conflict could push Brent prices close to $100 and increase global inflation by 0.6 to 0.7 percentage points. Reuters
The potential for additional losses remains. As of 09:52 a.m. ET, the Dow Jones had fallen by 355.68 points, equating to a 0.73% decrease. The Cboe Volatility Index rose to 21.96. Adam Turnquist from LPL Financial remarked, “The market is handling it relatively well.” However, Ohsung Kwon at Wells Fargo warned of a more significant decline in the S&P 500—possibly down to 6,000—if crude oil prices exceed $100 per barrel. Reuters
Impact of Inflation on Stocks
Sherwin-Williams and 3M stocks significantly impacted the Dow from the start, collectively reducing the index by approximately 112 points. Since the Dow is weighted by price, shares with higher prices exert more influence—a $1 change in any Dow component alters the index by roughly 6.16 points. MarketWatch
Inflation continued to be a key topic following the release of new data. The Institute for Supply Management reported that the manufacturing PMI fell to 52.4 in February. However, costs are increasing: factory input prices have reached their highest level in over three years, influenced by tariffs and rising energy costs. Reuters
Markets are continuing to process the repercussions of the Iran conflict, particularly concerning possible interruptions to shipping and travel, following the assassination of Supreme Leader Ayatollah Ali Khamenei by U.S. and Israeli forces, as reported by Reuters. Commerzbank’s chief economist Joerg Kraemer characterized the current response as “relatively moderate.” Conversely, Jefferies economist Mohit Kumar expressed his reluctance to invest just yet, anticipating “further declines in the days ahead.” Reuters
Future of Oil Supply Chain
Talks of a deal have emerged on a different front. BlackRock’s Global Infrastructure Partners, in collaboration with EQT, plans to purchase AES for $33.4 billion, including debt. The cash proposal is set at $15 per share, with a target closing date in late 2026 or early 2027. “Enhanced access to capital for investment,” is how Evercore ISI’s Nicholas Amicucci described the potential benefits for AES. Reuters
Ed Yardeni from Yardeni Research believes that the current risk-averse sentiment won’t last long. “We wouldn’t be shocked if any downturn … evolves into a rally,” he mentioned, noting that oil prices could decline once the conflict concludes. Investopedia
In addition to geopolitical matters, traders are closely monitoring economic indicators and corporate earnings for a sense of reality. The U.S. jobs report for February is drawing attention, with forecasts predicting an increase of 60,000 jobs, as noted by Reuters in their Week Ahead summary. Retail sales figures are also on the horizon, along with earnings reports from Broadcom, Best Buy, and Target. Reuters
On Friday, the next significant event is set to occur: the U.S. employment report for February, scheduled for release at 8:30 a.m. ET. Following that, the February CPI will be published on March 11 at the same hour. Traders are closely monitoring oil prices—if they remain stable before these reports, it could influence expectations for rate cuts. bls.gov