Mar 4, 2026
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“In wartime, truth is so precious that she should always be attended by a bodyguard of lies.” – Winston Churchill
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s been an up-and-down overnight session for US equity indices, and as we type this now, both the S&P 500 and Nasdaq futures are basically flat with moves of less than 10 bps to the upside. Treasury yields are slightly higher, crude oil is flat, and gold is up less than 1%. Pretty quiet day, huh?
Iran will have the potential to continue dominating market action for the day, but don’t forget about the ADP Employment report, ISM Services, and then Broadcom (AVGO) earnings after the close. Earlier this week, the ISM Manufacturing report had the highest Prices Paid reading since 2022, so that will be a key metric to watch in today’s report for the services sector.
The bottom fell out of Asian stocks overnight as the Nikkei fell 3.6%, and every other major benchmark index in the region fell at least 1%. The real damage, though, was in South Korea, where the KOSPI fell over 12% for its worst day on record. There have been major market panics over the last 40 to 50 years, but none of them featured a day when South Korean stocks had a worse one-day decline. Fallout from the war in Iran was the primary driver of the declines, but Chinese PMI data for the Manufacturing and Services sectors also came in weaker than expected.
European stocks are following a different path than Asia, as the STOXX 600 is up over 1%, and the only major country up by less than 1% is the UK. Spanish stocks have managed a gain of 1.4% despite threats from the Trump Administration to cut off trade with the country. Service sector PMIs for the Eurozone and individual countries were basically in line with or slightly better than expected.
After two full sessions of trading since the war in Iran started, the overall market reaction has been subdued, but there have been some larger moves among individual industry groups. While the S&P 500 is down less than 1%, 16 out of 25 industry groups are up or down more than 1%.
This morning, we wanted to focus on some of the extremes. Starting with the winners that have continued winning, the only two groups that were up YTD heading into the conflict and have continued higher since are Energy and Telecom Services. Along with those two groups, the only others that are up this week are Software & Services (3.0%), which took the opposite path of South Korea by going from worst to first, Commercial Services (0.9%), and Banks (0.2%).
To the downside, some of the worst-performing sectors this week were some of the best YTD performers heading into the conflict. Household & Personal Products, Food Beverages & Tobacco, and Materials were all up over 15% YTD heading into the week, and they’re all down over 3% this week. As painful as the declines may feel this week, they’re coming off of a high base. It’s also worth noting that while Software stocks have bounced, Autos and Real Estate Management- the second and third worst performing groups YTD heading into the conflict have continued lower.
Outside of the US, we’ve also seen some major reversals this week. In yesterday’s Chart of the Day, we noted the outperformance of US stocks relative to the rest of the world. Nowhere has this reversal been more evident than in the performance of South Korean stocks. On Monday, the iShares MSCI South Korea ETF (EWY) fell more than 10% for its largest one-day decline since the Covid crash (South Korea’s KOSPI last night had its worst day on record). As shown in the chart below, declines of this magnitude have only been seen during periods of major crises like Covid, the Financial Crisis, and the dotcom bust.
Besides Monday’s decline, EWY continued lower yesterday and is indicated down by another 3% this morning. That takes its decline this week to over 15%, and as sharp as that may sound, the ETF is still up over 7% in the last four weeks. It’s been a rocky few sessions, but if someone told you four weeks ago that you’d have a 7% gain in a month despite a major war in the Middle East, who wouldn’t have signed up for that?
From a longer-term perspective, EWY still looks extremely extended relative to its historical range. After breaking out above its 2021 highs late last year, it is still up over 32% YTD, making it the top-performing major country ETF, so it’s hardly oversold.
Mar 3, 2026
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Mar 3, 2026
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“The hardest hits are yet to come from the U.S. military,” – Marco Rubio, US Secretary of State
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Futures are off their overnight lows, but the optimism from the close yesterday evaporated quickly. The S&P 500 is indicated to gap down 1.4% at the open, while the Nasdaq will open down closer to 2%. These are even larger downside moves than at yesterday’s open! Treasury yields continue to move higher as the 10-year yield is back to 4.10%, and oil is on pace for its second day in a row of 6%+ gains. Unlike yesterday, though, there’s been no bid for gold or other precious metals as they’re all sharply lower. Bitcoin is also down 3%.
In Asia, markets are lower again this morning as the Nikkei fell 3.1%, China was down over 1%, and South Korea, after being closed on Monday, tanked 7.2%. It’s the same sea of red in Europe as well. The STOXX 600 is already down 3% on the day, on some of the most negative breadth we have seen in quite some time (24-1 to the downside and every group is down over 1.55%). As bad as US futures look this morning, the losses are a scratch relative to the gash in international markets. From an energy perspective, the US is much more insulated than the rest of the world is to Middle Eastern oil and gas. Therefore, the longer the conflict drags on, the more US assets should catch a bid, at least on a relative basis.
After an impressive turnaround from the morning lows yesterday, the ink was barely dry on the closing prices for the day when US Secretary of State Marco Rubio briefed the press with a statement that included the quote above. That, along with Iranian drone attacks on the US embassy in Riyadh, comments from the IRGC that the Strait of Hormuz was “closed” and any ships that attempted to traverse through it would be set ablaze, and a directive from the State Department for all personnel in Bahrain, Iraq, and Jordan to evacuate those respective countries, has caused a sharp reversal in sentiment as to the scope and duration of the current war situation in the Middle East.
At points yesterday, there was growing confidence that the operation against Iran would be quick, but this morning, we’ve seen some warnings from analysts that it already looks as though the US is getting involved in a prolonged quagmire (even though it hasn’t even been four days to this point). The next several days promise to feature multiple swings in sentiment as the situation unfolds, but remember this: no one knows exactly how this will all play out. The comments from Rubio above and the ones from the IGRC regarding the Strait of Hormuz sound dire, but what else do you expect them to say in the middle of a war?
We’ve only had one day of trading since the war began, and already the market action has been a roller-coaster. After gapping down more than 1% at the open yesterday, the SPDR S&P 500 ETF (SPY) bounced throughout the trading day to finish marginally higher, in what was only the 60th time since its launch 33 years ago that the ETF gapped down at least 1% and finished the day higher. With futures trading sharply lower again this morning, SPY is on pace to gap down more than 1% again today, and of those 59 prior reversals, SPY only gapped down more than 1% the following session six other times
This type of volatility only occurs under one condition – massive uncertainty. As shown by the red dots in the chart, the prior back-and-forth reversals were in December 2002, coming out of the dotcom bust, late 2008 following the collapse of Lehman, January 2022 when inflation started to spike, and last April during the tariff-tantrum. What’s somewhat unique about the current period, however, is the level of the VIX. In the six prior occurrences, the average level of the VIX was 40, and it was never below 30. As of this morning, the VIX is trading just under 26. Also, while the S&P 500 remains close to 52-week highs, all of the others, except the one in January 2022, occurred closer to 52-week lows.
While these types of reversals have been rare for SPY, the Nasdaq 100 is inherently more volatile, so it shouldn’t come as a surprise that they have been more common in QQQ. Today’s reversal will be the 19th such reversal. As shown in the chart below, most of these reversals occurred during the dot-com bust, with 12 between the March 2000 peak and the October 2002 lows. As the Nasdaq has ‘matured’ since then, occurrences have been much less frequent, with three during the financial crisis, one in early 2019, another in January 2022, and most recently in April of last year.
Mar 2, 2026
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“If what you have done yesterday still looks big to you, you haven’t done much today.” – Mikhail Gorbachev
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Markets are poised to open the week sharply lower following the start of the war in the Middle East. Both the S&P 500 and Nasdaq are indicated to open down by over 1%, crude oil is sharply higher, gold is surging, and even Bitcoin is higher.
Overnight in Asia, major averages were all lower except for China, which rallied 0.5%. European markets are also joining in on the weakness, with the STOXX 600 down 1.5% and Spain and Germany both down over 2%.
It’s tempting to look at the initial moves in the opening hours of trading and extrapolate them to a specific endpoint, but we’d stress that we’re still very early in this process. While a short conflict would likely be received positively by the market, the longer it drags on, and the higher energy prices stay, the more of an economic/market impact this will have.
Markets are mostly reacting just as you’d expect given the news of the weekend. Crude oil is sharply higher, stocks are down, and the dollar is up. The only asset class not following the playbook is the 10-year yield. US Treasuries are actually selling off modestly this morning, with the yield on the 10-year up about 3 bps to 3.98%. Higher yields will inevitably raise questions over the sell America trade, but two points are worth highlighting. First, on Friday, yields closed right near 52-week lows even as PPI came in higher than expected, so there was certainly some front-running of the attack on Iran heading into the weekend. Secondly, it’s not just US yields that are higher. Sovereign yields are also higher by similar amounts in Europe as well, so the move is more a reflection of concerns over inflationary impacts of the war.
Crude oil has followed the playbook just as you would expect, though. If the pre-market gains hold through the end of the session, it will be the largest one-day rally in WTI crude oil since the early days of the Russia-Ukraine war in March 2022. While crude oil is off the highs from overnight, at over $72 per barrel, it’s right near its highest levels of the last year.
It’s been a large move, but today’s gain would only rank as the 80th largest one-day gain in crude oil since 1984. Given the enormity of the military action, an even larger move in crude oil wouldn’t have been a surprise.
Feb 27, 2026
There’s still time in the trading day, but the Dow Jones Industrial Average (DJIA) is barely hanging on to a gain for the month (+0.05%). If it can hold on to these levels, it would extend the current monthly winning streak to ten, tying the streak that ended in January 2018 for the longest since February 1959 (12 months). As shown in the chart below, if the gains for February hold, it would be just the sixth double-digit monthly winning streak in the Dow’s history.
With the Dow up for ten straight months, it’s natural to wonder whether the index is stretched by historical standards. With a gain of just over 20% in the last ten months, its performance ranks in the 81st percentile relative to all other 10-month periods in its history, so the returns have been significantly better than average. However, looking at the chart of the index’s rolling 10-month performance over time shows that relative to prior streaks, the Dow’s gains during this run were actually the lowest of any comparable winning streak in its history. So, yes, the Dow’s performance over the last ten months has been much better than average, but far from extreme.
