Latest / Markets with Megan: A Quick Financial Markets Update / Iran Strike After 6% Oil Spike: Inflation Rise Risk | S3 E124 | 03-02-26

Transcript

Iran Strike After 6% Oil Spike: Inflation Rise Risk | S3 E124 | 03-02-26 · Markets with Megan: A Quick Financial Markets Update

• 0:00
  Megan Horneman: It was a busy weekend from a geopolitical standpoint.
• 0:02
  Megan Horneman: It's Monday, March the 2nd, and this is Markets with Megan.
• 0:05
  Megan Horneman: If you like this podcast, subscribe, hit the alarm bell, share it with your friends, family, or colleagues.
• 0:10
  Megan Horneman: But we're here today to break down some of the information we received over the weekend, specifically around the coordinated attack from the United States and Israel on Iran.
• 0:21
  Megan Horneman: Now, we have often been talking about some of the looming risks this year, and we knew that the US addressing the global risks with Iran was something on the table.
• 0:32
  Megan Horneman: We just didn't know the timing.
• 0:33
  Megan Horneman: So here we are.
• 0:35
  Megan Horneman: We do have this operation taking place right now.
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  Megan Horneman: This has spread into a bit of a more wider Middle East conflict.
• 0:44
  Megan Horneman: And we want to address specifically what it means from the investment standpoint.
• 0:49
  Megan Horneman: Let's break down the reaction that we've seen in the markets today.
• 0:52
  Megan Horneman: As we would expect, oil has been a big beneficiary of this, meaning that the oil prices have risen.
• 0:59
  Megan Horneman: We've seen oil up about 6% today.
• 1:02
  Megan Horneman: It was up higher than that over the weekend, but today it's up about 6%.
• 1:07
  Megan Horneman: It's the highest that we've seen since June of last year.
• 1:10
  Megan Horneman: Natural gas as well is up about 7%.
• 1:13
  Megan Horneman: It has come down from its overnight high, but it is up about 7% right now.
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  Megan Horneman: And that's because 20% of the global oil runs through the Strait of Harmuz.
• 1:23
  Megan Horneman: And this is something that Iran has threatened to shut down.
• 1:27
  Megan Horneman: So that any disruption in this strait does call and cause an increase in commodity prices.
• 1:33
  Megan Horneman: We've seen from an equity perspective that equity markets opened up significantly lower, but we have settled down quite a bit.
• 1:40
  Megan Horneman: We're down a little bit, but really fractionally for the day.
• 1:43
  Megan Horneman: Energy stocks are up big, they're up about 1.5% on the day alone.
• 1:48
  Megan Horneman: And as you would expect, when energy rises, that does take discretionary spending out of consumer pockets.
• 1:54
  Megan Horneman: So we're seeing discretionary stocks down about one and a quarter percent on the day alone.
• 2:00
  Megan Horneman: Now, U.S.
• 2:00
  Megan Horneman: equities have been able to recover a bit today.
• 2:03
  Megan Horneman: International equities, specifically in Europe, they did end the day lower.
• 2:07
  Megan Horneman: And we'll see how they open up tomorrow.
• 2:10
  Megan Horneman: But higher oil prices also does translate into the risk of inflation.
• 2:14
  Megan Horneman: So we've often talked about the risks that we see to inflation this year.
• 2:18
  Megan Horneman: This does compound that risk.
• 2:21
  Megan Horneman: What we've seen from the inflation expectation component, and we look at break-even rates in the treasury market, short-term break-even rates, and that's on two-year tips, that's jumped to 2.9%, and that's the highest we've seen since April of 2025.
• 2:39
  Megan Horneman: And again, the safe haven of gold also is back up and closing in on its record high.
• 2:45
  Megan Horneman: We are seeing higher interest rates, and that because that's strictly because of the increase we've seen in commodity prices and what that means for inflation.
• 2:54
  Megan Horneman: Higher inflation means higher interest rates.
• 2:57
  Megan Horneman: So this is all very fluid situation.
• 3:00
  Megan Horneman: We don't think we're going to get a resolution overnight.
• 3:03
  Megan Horneman: This probably will take several weeks.
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  Megan Horneman: So we will see markets on edge as this continues to materialize.
• 3:10
  Megan Horneman: And as we get more information on any supply chain disruptions and any disruptions from the oil markets.
• 3:16
  Megan Horneman: But that's all we have today.
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  Megan Horneman: If you want a history of our podcast, you can go to marketswithmegan.