MarketPulse Summary
Wartime, a boon for Markets? – North American Mid-Week Market Update
By Elior Manier
Date: March 4, 2026
Market Overview
North American stock markets are experiencing a rebound after a challenging end to February 2026. Despite ongoing conflicts in the Middle East, risk sentiment and North American currencies remain robust. The article discusses the interplay of various factors affecting market dynamics, particularly the impact of geopolitical tensions and economic indicators.
Key Developments
Since the start of 2026, market participants have faced a mix of pessimistic factors, including tariffs and escalating tensions in the Middle East. A significant Supreme Court decision to block IEEPA tariffs has positively impacted major exporters, reducing duties from 30-50% to a general 15%. This development has provided a boost to equities, helping them maintain support within a five-month consolidation phase.
Middle East Tensions
The U.S. and Israel have declared war on Iran following decades of hostility. The Iranian regime's aggressive stance, coupled with internal revolts and a rise in uranium enrichment, has led to military operations against Iranian targets. This conflict has caused oil prices to surge by 10-15%, raising concerns about supply disruptions, particularly in the Strait of Hormuz.
Market Sentiment and Currency Performance
Despite the ongoing military operations, market sentiment has improved, with the U.S. and Canadian dollars reaching new highs. The article notes that the Beige Book indicates an uptick in economic activity, suggesting that the Federal Reserve may delay rate cuts. The U.S. dollar has seen significant gains against major currencies, driven by a petrodollar trade amid the conflict.
North American Indices Performance
U.S. indices have remained near their highs, with the Nasdaq showing slight gains while the Dow Jones has seen a minor retraction. The Canadian dollar has also performed well against other currencies, particularly European ones. The article provides technical levels for the U.S. dollar and Canadian dollar, indicating potential resistance and support levels for traders to monitor.
Upcoming Economic Data
The economic calendar for North America is busy, with key data releases expected, including Non-Farm Payrolls and Retail Sales on Friday, and U.S. CPI next Tuesday. Market participants are advised to keep a close watch on developments in the Middle East as they could significantly impact market conditions.