To The Moon

The market’s recent “ignore geopolitics” mindset faded Tuesday morning as U.S. stocks opened sharply lower amid escalating conflict with Iran. By late morning, however, equities began to recover as oil prices pulled back and volatility cooled.

Market Close (March 3, 2026)

• Dow Jones Industrial Average: 48,501.27 (-0.83%)

• $S&P 500(.SPX)$ : 6,816.63 (-0.94%)

• Nasdaq Composite: 22,516.69 (-1.02%)

• Best Sector: Financials (-0.2%) Worst Sector: Materials (-2.7%)

  Hot Stock: $Workday(WDAY)$ (+7.2%) Biggest Loser: $SanDisk Corp.(SNDK)$ (-8.7%)

  Defensive positioning remains selective rather than broad-based, suggesting investors are hedging rather than fully de-risking.

The Cboe Volatility Index (VIX) surged as much as 26% intraday before settling to close up about 10%, suggesting elevated, but possibly stabilizing, market stress.

$VIX

Strait of Hormuz in Focus

Strait of Hormuz

Investor anxiety intensified after reports that Iran struck a U.S. embassy in Saudi Arabia and targeted two Amazon data centers overnight.

The broader concern remains the Strait of Hormuz, a critical corridor through which roughly 20% of the world’s oil supply flows.

Trump helped calm markets in the afternoon, stating that the U.S. Navy would escort tankers through the strait “as soon as possible” if necessary. The U.S. International Development Finance Corporation also announced it would provide political risk insurance and guarantees to maritime trade firms operating in the Gulf. That reassurance helped oil prices retreat from earlier highs, easing fears of a severe global supply shock.

“Down but Not Out”

The key driver of the rebound:

• Oil prices stabilizing

• Volatility pulling back from extreme levels

• No immediate spillover into credit markets

For now, markets appear stressed, but not broken…

Small Business Outlook: Resilient but Cautious

Amid geopolitical turmoil, fresh data from the 2026 Report on Employer Firms, released in collaboration with the 12 Federal Reserve Banks, show small businesses have largely weathered recent economic turbulence, but optimism for 2026 has stalled.

Key takeaways:

• Revenue, employment, and profitability held steady over the past year

• Slightly more firms reported revenue declines than gains for the second straight year

• Expectations for revenue growth and hiring in 2026 are at their lowest since 2020

Small businesses account for nearly 40% of private-sector payrolls, making their outlook economically significant.

Rising Costs Remain the Top Concern

• 84% of firms sourcing foreign inputs reported higher costs

• 76% have passed along some costs to customers

• 60% are still absorbing part of the burden

According to a recent Bank of America Institute survey, tariff payments among small-business clients rose 142% year over year in January (three-month moving average).

The implication: pipeline inflation pressures may persist, even if consumer demand remains resilient.

What to Watch Next

Earnings Reports:

• Abercrombie & Fitch

• American Eagle Outfitters

• Bath & Body Works

• $Broadcom(AVGO)$

• Brown-Forman

• Okta

• Rigetti Computing

• Veeva Systems

Economic Data:

• ISM Services PMI (expected 53.8, matching January)

• Federal Reserve Beige Book release

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.

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