Ex US Gets Hit on Energy Price Spike
The S&P 500 opened down more than 1% to start the week after the US attacked Iran over the weekend, but the index closed slightly positive by day’s end. Yesterday we published a write-up highlighting the recent outperformance of international equities versus the US, but that script was flipped on its head today.
As shown below, key international equity ETFs like CWI (all world ex. US), EEM (emerging markets), VPL (Pacific region), and FEZ (Europe) were solidly green through February, but they fell sharply today. China (MCHI) also fell nearly 1% today, while the US (SPY) posted a small gain of 0.05%.
The reason for today’s global equity divergence was a spike in energy prices due to the attack of Iran. With oil and natural gas prices spiking, countries that rely on energy imports got hit hard, while the US — which is energy independent — held strong.
As shown below, oil prices spiked into the mid-$70s at the highs today before pulling back to close just below $72. It was a fresh six-month high for crude.
Even after today’s spike, though, oil prices remain stuck in a downtrend dating back to 2022 highs:
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The Closer – Reversals, LNG and Rates, PMIs – 3/2/26
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- Today’s morning selloff in stocks appeared to be severe at first, but equities managed to pivot into the green by the close.
- Energy stocks and prices caught a bid on the latest Iran news while US LNG exports continue to swell.
- ISM Manufacturing data indicated continued robust activity in the month of February.
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Daily Sector Snapshot — 3/2/26
The Triple Play Report: 2/26/26
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Bespoke Market Calendar — March 2026
Please click the image below to view our March 2026 market calendar. This calendar includes the S&P 500’s historical average percentage change and average intraday chart pattern for each trading day during the upcoming month. It also includes market holidays and options expiration dates plus the dates of key economic indicator releases.Click here to view Bespoke’s premium membership options.
Chart of the Day: March Seasonality
February 2026 Headlines
Bespoke’s Morning Lineup – 3/2/26 – March into War
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“If what you have done yesterday still looks big to you, you haven’t done much today.” – Mikhail Gorbachev
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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.
US vs. Rest of World
Through the first two months of 2026, the rest of the world has crushed the US when it comes to stock market performance. Using ETFs as a proxy, the US (SPY) is up just 0.6% YTD, while the MSCI All World ex US ETF (CWI) is up 10.86%. In addition to CWI beating SPY by more than ten percentage points through February, the emerging markets ETF (EEM) is up even more with a YTD gain of 14.38%.
The rest of the world has outperformed the US over the last year as well. Below is a look at one-year performance for seven ETFs: the US (SPY), the rest of the world (CWI), emerging markets (EEM), Latin America (ILF), the Pacific (VPL), Europe (FEZ), and China (MCHI).
Of these seven, Latin America (ILF) leads the pack with a one-year gain of 59.5%. The Pacific (VPL) is up the second-most at +47.7%, followed by emerging markets (EEM) at +42.8%.
Europe (FEZ) is beating the US by exactly ten percentage points with a gain of 27.3% versus 17.3% for SPY. The only ETF of the group that has done worse than the US over the last year is the MSCI China ETF (MCHI).
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A Mag-7-less Start to the Year
Given the massive geo-political events that have taken place this weekend with Operation Epic Fury taking out Iran’s Supreme Leader Khamenei, no one knows what will happen once the dust settles from tomorrow’s trading action. We do know, however, that 2026 has so far seen the tightest range on record for the S&P 500 through the first two months of the year.
Just 2.65% separates the S&P 500 ETF’s (SPY) highest and lowest close so far this year. That’s its tightest year-to-date high/low spread ever through February, and the same record holds for the actual S&P 500 index throughout its history.
Needless to say, the “market” as measured by the large-cap S&P 500 is a coiled spring heading into March.
While the cap-weighted S&P 500 has been flat as a pancake this year, the average stock in the index is actually up 7%.
This means the largest stocks in the index, the mega-caps, have underperformed. The Roundhill Mag 7 ETF (MAGS) is made up of Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), NVIDIA (NVDA), and Tesla (TSLA).
So far this year, MAGS is down 7%.
Below is a look at the huge 14-percentage point YTD performance gap between the S&P 500 Equal Weight ETF (RSP) and the Mag 7 ETF (MAGS):
As we get set for March, not one of the Mag 7 stocks is up on the year. As shown below, Alphabet (GOOGL) has been the best performer of the group this year with a small decline of 0.4%. On the flip side, Microsoft (MSFT) is down the most with a decline of 18.8%.
With such big concentration at the top of the S&P 500, investors have been worried that weakness in the mega-cap cohort would inevitably take down the rest of the market. During the recent Mag 7 sell-off, the rest of the market has stepped up enough to essentially keep the major cap-weighted indices flat.
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