Tuesday, March 3, 2026…4:10 PM ET
[4:00 PM ET closing prices for stocks; 3:50ish for commodities and bonds.]
When I turned on the computer at 4:00 a.m. ET this morning, it sure looked ugly in the global markets as the war in Iran spread, with Israel sending troops into Lebanon after Hezbollah militants said they are ready for open war.
The State Department closed its embassies in Saudi Arabia and Kuwait Tuesday after Iranian drone attacks struck those facilities.
Amazon said some of its data centers in the UAE and Bahrain were damaged by drone strikes, disrupting cloud services and making a recovery “prolonged.”
A strike on the UAE facility marks the first time a major U.S. tech company’s data center has been disrupted by military action; raising questions around Big Tech’s pace of expansion in the region.
Oil soared as Iran said the Strait of Hormuz was closed after the regime hit a number of tankers in retaliation for the U.S.-Israeli airstrikes and the killing of Ayatollah Khamenei, with supertanker costs in the Middle East hitting all-time highs, according to shipping data and industry sources on Tuesday.
Saudi Arabia’s biggest refinery was still shut and output in Iraqi Kurdistan has virtually ceased. British gas prices and European and Asian LNG prices all jumped.
Here’s one industry example from Reuters as to shipping costs:
“The benchmark freight rate for the very large crude carriers (VLCCs) used to ship 2 million barrels of oil from the Middle East to China, also known as TD3, rose to an all-time high of W419 on Monday on the Worldscale industry measure used to calculate freight rates, or $423,736 per day, LSEG data showed. The rate has doubled from Friday.”
Daily freight rates for LNG tankers jumped more than 40% on Monday after Qatar halted production. Atlantic rates rose to $61,500 per day on Monday, up 43%, or $18,750, from Friday, according to Sparks Commodities, a pricing assessment agency for LNG shipping. Pacific rates rose to $41,000 per day, up 45%, or $12,750, from Friday.
Some experts thought LNG shipping rates could rise above $100,000 this week on tight supply.
Of course you have the insurance angle as well. Most insurers flat-out cancelled coverage for vessels.
Personally, the price of regular gas at the lowest-priced gas station in my area of New Jersey soared 30 cents just today, from $2.99 to $3.29. I have a station one block away and it rose from $3.15 to $3.39. This is happening all over the world. The question is, for how long?
Stocks were down big. We had a major inflation scare if the conflict continued for more than a few weeks, let alone if it spread much further.
Among the major markets, Tuesday….
Tokyo’s Nikkei was down 3.1%.
South Korea’s high-flying Kospi cratered 7.2%…this being the past year’s best performer.
London’s FTSE -2.8%
German DAX -3.4%
France CAC 40 -3.5%
Bond markets across the pond took it on the chin a second day though bounced back some before their close.
In two days, the yield on the British 10-year has risen from 4.23% to 4.47% (though it hit 4.51% this morning); the German bund has seen its yield rise from 2.64% to 2.75%; and the 10-year in Italy has risen from 3.27% to 3.45%.
The Dow Jones Industrial Average was down 1200 points late this morning, with all three major U.S. indices falling over 2%.
But just like on Monday, stocks rallied back, especially following a Politico report that the U.S. military was going to escort tankers through the Strait of Hormuz.
And then at 2:37 PM ET, President Trump posted on Truth Social:
“Effective IMMEDIATELY, I have ordered the United States Development Finance Corporation (DFC) to provide, at a very reasonable price, political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf. This will be available to all Shipping Lines. If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible. No matter what, the United States will ensure the FREE FLOW of ENERGY to the WORLD. The United States’ ECONOMIC and MILITARY MIGHT is the GREATEST ON EARTH – More actions to come. Thank you for your attention to this matter! President DONALD J. TRUMP”
Stocks rallied further on this news, but still finished down on the day, and down more after Trump’s post. Oil fell as well, though up from Monday’s close, and it’s up $6+ on West Texas Intermediate since Friday.
Kenneth S. Rogoff, a former chief economist at the International Monetary Fund and a professor at Harvard observed: “We’re in a very precarious period.”
A chess grandmaster and a student of history, Rogoff was skeptical of the consensus that the conflict will be short-lived. He cited the assassination of the presumptive heir to the throne of the Austro-Hungarian Empire more than a century ago – an episode that set off a global conflagration.
“It’s a little bit like asking, when the Archduke Ferdinand got killed, what the macroeconomic consequences would be, and having no idea what was next,” Rogoff said. “When World War I started, everyone thought it would end in a month.” [New York Times]
At the end of the day….
Dow Jones -403…-0.8% [48501]
S&P 500 -64…-0.9% [6816]
Nasdaq -232…-1.0% [22516]
Oil (WTI) $73.75…up 4%
Gold $5110…down 4%….
Silver $82.25…down 8%….
Bitcoin $68,240 [4:00 PM ET]
U.S. 2-yr. 3.50%
U.S. 10-yr. 4.06%…had hit 4.10% earlier after closing Friday at 3.96%….
Japanese 10-yr. 2.12%
Back Wed.
Brian Trumbore
