Global Risk Monitor: Week in Review – March 6

The global market narrative has been utterly hijacked by the seventh day of the U.S./Iran conflict. While Washington demands “unconditional surrender,” the energy markets are issuing a surrender of their own, to pure, unadulterated upward momentum. Crude oil prices surged a staggering 35% this week (and another almost $20 in Sunday night trading), have climbed approximately $40 in less than a fortnight, with WTI crude breaking above $108 per barrel. Despite this parabolic spike and the very real threat of a prolonged closure of the Strait of Hormuz, a choke point for one-fifth of global oil consumption, the S&P 500 remains down a mere 1.5% for the year. This disconnect is, frankly, staggering. Our view is that U.S. equities are currently a “screaming short,” though we’d advise keeping your hand firmly on the rip cord given the market’s irrational resilience.

As of Sunday night, March 8, 2026, the oil futures market is in a state of historic upheaval, characterized by a massive price surge and extreme backwardation. Following a week of record gains, West Texas Intermediate (WTI) crude futures opened Sunday evening at approximately $108 per barrel, an 18% jump from Friday’s close. Brent crude similarly surged to over $111 per barrel.

The table below illustrates the steep backwardation in the crude oil  market, where near-term “spot” prices are significantly higher than longer-dated contracts, indicating an urgent demand for immediate

The complexities of forecasting in this environment cannot be overstated. We are moving beyond normal market cycles into a period of extreme volatility, where exogenous shocks override traditional economic data. While equity markets eventually stabilized following the 2022 invasion of Ukraine, the “how high for how long” question regarding energy prices remains the $100-per-barrel elephant in the room. The stagflationary risk is palpable: higher energy costs act as a global tax on consumers and businesses, just as labor markets begin to show significant cracks.

“Significant Moves” this past

week were dominated by a “one-two punch” of soaring oil and jumping Treasury yields. Global yields spiked as the market began to price in the inflationary passthrough of energy costs, with the U.S. 10-year yield reclaiming the 4.15% level. The labor market, meanwhile, delivered a “discouraging” blow; February nonfarm payrolls saw a net loss of 92,000 jobs—the largest monthly drop since the pandemic—sending the unemployment rate up to 4.4%.

Beneath the headline levels, technical deterioration is accelerating. The S&P 500 and Russell 2000 have both dropped below their key 100-day Simple Moving Averages, shifting the near-term outlook to “moderately bearish”. While “dip buyers” appeared with daily hammers to try and stem the tide, they were ultimately overwhelmed by the geopolitical premium being baked into every asset class. Private credit is also feeling the heat, with Blackstone’s BCRED and BlackRock funds facing record redemption requests as investors scramble for liquidity.

Regional Performance

United States

• Indices Tumble: The S&P MidCap 400 was the week’s laggard, shedding 4.61%, while the Dow Jones Industrial Average fell 2.9% on a total return basis.
• Sector Divergence: Energy and Software (IGV) managed to buck the trend, with IGV up ~7.5% for the week despite being down 17% YTD.
• Labor Market Shock: The surprise loss of 92,000 jobs in February completely reversed January’s upside surprises, suggesting a “lethargic” hiring environment.
• Yield Reversal: The 10-year Treasury yield jumped 18 basis points to 4.14%, reflecting renewed inflation fears fueled by the oil spike.
• Breadth Contraction: S&P 500 market breadth sank, with the percentage of members above their 200-day SMA dropping to 59.76% from 67.27% the previous week.

International

• Global Sell-off: Ex-U.S. stock indexes sustained much deeper losses than domestic markets, with the MSCI EAFE and MSCI Emerging Markets indexes both plunging nearly 7%.
• Korea: After leading the world with a 50% gain in the first two months of the year, Korean equities were hit hard as investors reconsidered global growth prospects.
• Europe: The STOXX Europe 600 tumbled 5.55% as military strikes on Iran decimated risk appetite; Germany’s DAX and France’s CAC 40 both retreated over 6.7%.
• Japan: The Nikkei 225 declined 5.49% as the “prolonged Hormuz closure” poses a significant threat to Japan’s energy-dependent economy.
• China: Beijing set its 2026 GDP growth target at a modest 4.5%–5%, signaling comfort with slower growth as policymakers focus on technology self-sufficiency.

The Week Ahead

Prepare for a “volatile” forecast where geopolitical headlines will likely override standard economic cycles.

• Inflation Litmus Test: Wednesday’s CPI and Thursday’s PPI reports will offer “clarity” on whether the energy spike is already manifesting in consumer and producer prices.
• GDP and PCE: Friday brings the second estimate for GDP and PCE prices, providing a look at whether growth is decelerating as fast as the Atlanta Fed’s nowcast suggests (recently revised down to 2.1%).
• Energy Watch: All eyes remain on the Strait of Hormuz; any confirmation of Gulf oil and gas exporters stopping production would send benchmarks into uncharted territory.
• Central Bank Complications: The stagflationary shock puts the ECB and the Bank of England in a “knife edge” position regarding planned rate cuts.

Corporate Pulse: Key earnings from Oracle (Monday) and Adobe (Thursday) will test if the “AI disruption” narrative can still provide a tailwind amidst the broader macro carnage.

Source: https://global-macro-monitor.com/2026/03/08/global-risk-monitor-week-in-review-march-6/