March 7, 2026 • Global
GLOBAL MARKETS IN TURMOIL: Oil Surges, Stocks Slide as Middle East War Spreads - Full Infograph Inside
Mohamed El-Erian: The global economy faces a stagflationary shock as the US-Israel war on Iran expands, sending oil prices to record weekly gains and triggering market volatility. With supply chains disrupted and inflation fears resurging, central banks face a policy dilemma, while China lowers its growth target to its lowest level since 1991.
📝 SMikhail
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Record
Oil Price Surge
Brent crude recorded its second-largest weekly increase on record; WTI saw its largest.
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2%
S&P 500 Loss
The S&P 500 sold off 2% for the week, despite two 'buy the dip' attempts by investors.
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4.14%
10-Year Treasury Yield
Yields rose as inflation concerns dominated, with the 10-year US Treasury yield ending the week at 4.14%.
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-92,000
US Jobs Lost
The US economy lost 92,000 jobs in February, pushing the unemployment rate to 4.4%.
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4.5%–5.0%
China's 2026 Growth Target
Beijing reduced its 2026 growth target to the lowest range since 1991, as it grapples with headwinds.
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40 bps
UK Gilt Yield Spike
The 10-year Gilt yield rose 40 basis points, doubling the move of the US Treasury.
- The US-Israel war on Iran quickly spread conflict and disruptions to twelve other countries, blowing a stagflationary wind through the global economy.
- Oil and gas prices surged as the energy price rally accelerated, reflecting a realization of systemic fragility in production facilities and cross-border supply chains.
- Kuwait announced cuts to oil and refinery production due to shipping disruptions in the Strait of Hormuz, with similar signals from Qatar and UAE.
- Stocks sold off despite two 'buy the dip' attempts, with the Nasdaq down 1.2%, the S&P 2%, and the Dow 3%.
- The most visceral volatility hit Asia, with South Korea seeing double-digit moves in both directions.
- Yields rose as inflation concerns dominated, pushing the 10-year Treasury yield to 4.14%, while the dollar strengthened, with the DXY closing at 98.99.
- Asia is particularly hard hit by the economic effects, with China losing its second major source of discounted oil after already grappling with the loss of Venezuelan supply.
- Beijing reduced its 2026 growth target to 4.5%–5.0%, the lowest since 1991, which may prove overly ambitious without a massive policy effort.
- The February jobs report showed a significant miss, with the economy losing 92,000 jobs and unemployment rising to 4.4%, though it was clouded by 'noise' from weather and strikes.
- Average weekly earnings grew at a 3.8% annual rate, exceeding consensus.
- ISM readings were more upbeat, with the forward-looking component reaching its highest level in a year.
- February inflation in Europe surprised on the upside for both headline and core figures.
- Between the inflation data and the oil spike, markets are now pricing in an ECB rate hike this year.
- Challenges facing private credit dominated headlines, with a major asset manager marking a loan to zero that was at par only weeks ago.
- The same manager imposed withdrawal limits on one of its flagship funds, underscoring mounting liquidity pressure and concerns about valuations.
- Focus remains on the economic and market fallout of the Middle East conflict, but it is also a pivotal data week for the US and UK.
- US releases include JOLTS, GDP revisions, Personal Income/Spending, CPI, PPI, and PCE. The Fed is in a blackout period ahead of the March 17-18 FOMC meeting.
- The UK will release monthly GDP, with projections suggesting the energy shock could pull annual growth below 1% while pushing inflation from a path to 2% up to 3%.
KEY QUOTES
"The global economy and markets have just emerged from a week that will not be forgotten quickly—unless, of course, the coming week proves even more disruptive." — Mohamed El-Erian
"This wasn't just 'war premium'; it was a realization of systemic fragility. Energy producers are signaling that certain production facilities and cross-border supply chains do not handle 'sudden stops' well." — Mohamed El-Erian
"My current (and inevitably tentative) projections suggest this shock could pull annual GDP growth below 1% while pushing inflation, which was on a path to 2% up to 3% for the year." — Mohamed El-Erian
Global Economy
Markets
Mohamed El-Erian
Middle East war
US-Israel war
Iran
stagflation
oil prices
Brent
WTI
supply chains
Strait of Hormuz
Kuwait
Qatar
UAE
stocks
S&P 500
Nasdaq
Dow Jones
South Korea
volatility
Treasury yields
dollar
DXY
China
growth target
Venezuela
US jobs report
unemployment
ISM
Europe
ECB
inflation
UK
Gilt yields
private credit
liquidity
asset manager
JOLTS
GDP
CPI
PPI
PCE
FOMC
Federal Reserve
blackout period
Oracle
Dick's Sporting Goods
Kohl's
2026