The Iran Impact on Markets 🚨

Welcome back to the the Day Trading newsletter 📈 

Just when you thought February's volatility was over, the U.S. and Israel launched military strikes on Iran early Saturday morning.

Markets are closed, but futures and crypto are already moving, Bitcoin dropped, oil spiked, and gold is holding near all-time highs. We'll get to that.

But first, let's look back at a week that had everything: hotter-than-expected inflation, Nvidia continuing its post-earnings slide, and the biggest AI-driven layoffs in S&P 500 history.

Buckle up 👇️ 

📆 Monday 3/2 — ISM Manufacturing PMI: First read on factory activity for February. Expansion above 50 signals resilience, but watch the prices paid component for inflation signals.

📆 Tuesday 3/3 — Target & Best Buy Earnings (Pre-market): Consumer discretionary health check. Both retailers exposed to tariff uncertainty and cautious shoppers.

📆 Wednesday 3/4 — Broadcom Earnings (After-hours): The AI chip story beyond Nvidia. Custom silicon for hyperscalers is Broadcom's bread and butter. Guidance will be closely watched.

📆 Thursday 3/5 — Costco Earnings: The one retailer that seems immune to everything. Watch membership growth and same-store sales.

📆 Friday 3/6 — Nonfarm Payrolls: The big one. January's 130K print was solid. February data will be the first clean read post-shutdown recovery. Consensus expects ~150K.

📉 Nvidia is now negative for 2026. Despite crushing Q4 earnings last week, the stock fell another 4% Friday, extending its post-earnings slide to nearly 10%. The AI darling has lost more than $250 billion in market cap since reporting. When perfection is priced in, even a beat isn't enough (Motley Fool)

🔥 PPI came in hot, much hotter than expected. Wholesale prices rose 0.5% in January vs. 0.3% expected, with core PPI jumping 0.8% (double estimates). The Dow shed 520 points on Friday as traders pushed rate cut expectations further out. The Fed is now likely stuck at 3.50-3.75% through summer (CNBC)

🤖 OpenAI lands Pentagon deal hours after Trump blacklists Anthropic. The same day the administration ordered federal agencies to stop using Anthropic (labeling the AI lab a "supply-chain risk" after a clash over safety guardrails) OpenAI announced its own DoD contract. The deal includes three red lines: no mass surveillance, no autonomous weapons, no high-stakes automated decisions. OpenAI says it retains full control over its safety stack and can terminate if the government breaches terms (Reuters)

🎬️ Paramount-WBD merger is done: $111 billion deal closes as Netflix walks away. David Ellison's Paramount Skydance outbid Netflix's $27.75/share offer with $31/share. Netflix stock jumped 14% on relief it dodged a potentially dilutive deal, while Paramount surged 21%. The combined company will be one of Hollywood's largest content portfolios (Reuters)

✂️ Jack Dorsey is cutting 40% of Block's workforce, 4,000 people, because of AI. In a letter to shareholders, Dorsey said "intelligence tools have changed what it means to build and run a company" and predicted most companies will make similar cuts within a year. The stock jumped 17%. It's the most significant AI-driven workforce reduction in S&P 500 history (Reuters)

💻️ Dell surged 22% on monster AI server demand. The company reported $64 billion in AI-optimized server orders and a record $43 billion backlog. Dell expects AI server revenue to double in fiscal 2027. It announced a $10B buyback and 20% dividend increase. The AI infrastructure buildout is very much alive, just not evenly distributed (Reuters)

The U.S. and Israel launched military strikes on Iran early Saturday morning. By the time you read this, markets will be a matter of hours from reopening into a world that looks very different than it did Friday.

Here's what moved immediately:

• Bitcoin dropped 3% to $63K within hours of the first reports.

• Oil futures spiked 3-5% in overnight trading.

• Gold, already at all-time highs above $5,200, held firm as the ultimate safe-haven bid.

• Flight cancellations rippled across the Gulf region.

The historical playbook says geopolitical shocks create short-term volatility but rarely derail markets for long. The Gulf War, the Iraq invasion, even the initial COVID crash - markets found their footing within weeks.

But this situation has variables we haven't seen before.

Iran controls the Strait of Hormuz, through which 20% of the world's oil flows daily. Any disruption there sends energy prices vertical and reignites inflation fears just as the Fed thought it was winning that fight.

Friday's hot PPI print was already pushing rate cut expectations out. Add an oil shock and we're looking at a very different monetary policy trajectory.

Then there's the broader risk-off trade.

Crypto's immediate drop suggests it's still trading as a risk asset, not digital gold. Tech stocks, already under pressure from Nvidia's post-earnings slide, could see further rotation into defensives.

The VIX closed Friday at 19.86. Expect that to gap significantly higher Monday morning.

The bull case: Conflict stays contained, oil supply remains stable, and markets shrug it off like they usually do.

The bear case: Escalation, supply disruption, and a flight to safety that punishes anything with "growth" in its description.

Monday will tell us a lot. Position sizing matters more than direction right now.

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.