Markets brace for heightened volatility as the US and Israel launch major combat operations against Iran, with analysts warning of far larger market consequences than the Venezuela campaign and potential oil price spikes threatening any remaining Fed rate cut hopes in 2026.
Market Recap
US equities closed sharply lower on Friday, with the Dow falling more than 500 points as February ended in the red for the S&P 500 and Nasdaq amid mounting concerns about AI's economic impact and a hot inflation report. The session capped a difficult month as core wholesale prices rose 0.8% in January, significantly above expectations and up from December's 0.6% gain. Weekend developments have dramatically escalated geopolitical risk, with President Trump confirming Saturday morning that the US and Israel launched "major combat operations" attacking Iran, with explosions heard as Iran retaliated against US military bases.
Key Movers & Themes
- Iran strikes dominate: Investors are bracing for impact after the US attacks on Iran, which analysts view as carrying "bigger ramifications than Venezuela" with far larger market consequences. The next 24-48 hours will be crucial for markets, with any chance of a Fed rate cut in 2026 "evaporating before our very eyes" as the conflict threatens to stoke oil prices.
- Inflation remains sticky: Core PPI jumped 0.8% in January versus expectations, adding to concerns after earlier data showed core PCE at 3% and Q4 GDP growth of just 1.4%, badly missing the 2.5% estimate.
- Berkshire transition: Warren Buffett's final quarter as CEO saw operating earnings fall nearly 30%, while successor Greg Abel's first shareholder letter pledged to maintain Buffett's disciplined investing culture. The company's cash pile declined 2.1% to $373.3 billion at year-end 2025.
Economic Calendar – What to Watch Today
Markets are closed for weekend trading. No scheduled economic releases for Saturday, 28 February 2026. Focus remains on geopolitical developments and potential emergency policy responses. Monday's open will be critical for gauging market reaction to Iran conflict escalation.
Technical Levels to Watch
| Instrument | Support | Resistance |
|---|---|---|
| FTSE 100 | 7,850 / 7,780 (approx.) | 8,100 / 8,180 (approx.) |
| S&P 500 | 5,650 / 5,580 (approx.) | 5,850 / 5,920 (approx.) |
| NAS100 | 19,200 / 19,000 (approx.) | 19,800 / 20,000 (approx.) |
| US30 | 42,500 / 42,200 (approx.) | 43,500 / 43,800 (approx.) |
Note: Levels are approximate based on recent price action. Monday's open likely to gap significantly on Iran developments.
Trading Outlook
Risk-off sentiment will dominate Monday's open as markets digest the Iran conflict, with energy and defence sectors likely to see volatility while broader indices face downside pressure. Safe-haven flows into bonds, gold, and the dollar are expected, though the trajectory of the conflict over the next 48 hours will determine whether this becomes a sustained risk event or a brief spike – Morgan Stanley's bullish call on names like Nvidia now faces a significant geopolitical headwind that could override fundamental catalysts in the near term.
This briefing is generated using AI analysis of market data and news feeds, reviewed by the ChartsView team. It does not constitute financial advice. Always do your own research before making trading decisions.