The mood this morning reflects that tension. Oil is climbing. Gold and the dollar are rising as investors drift toward traditional safe havens. And equities are wobbling as traders try to decide which story matters more: a resilient American economy or a rapidly evolving geopolitical crisis.

Later today, investors will get fresh remarks from Federal Reserve Vice Chair Michelle Bowman. Tomorrow comes the main event: the February jobs report. Economists expect hiring to have slowed markedly, with around 50,000 jobs added after 130,000 in January. That slowdown, if confirmed, would normally strengthen the case for interest-rate cuts.

The Federal Reserve has spent months hoping inflation would glide gently down toward its 2% target. An energy shock threatens to disrupt that plan. Analysts estimate that a large jump in crude prices-say, a 25% surge-could add roughly half a percentage point to consumer inflation. That may not sound dramatic, but central bankers tend to lose sleep over numbers like that.

In other words, the Fed's job just got harder. Rate cuts that investors once expected by mid-summer may now arrive later, if they arrive at all. And yet markets rarely move in a single direction. Even in tense moments, they find reasons to bounce.

One of those reasons this week is artificial intelligence-specifically, the companies supplying the chips and infrastructure powering the boom. Broadcom offered the latest reminder that the AI build-out is still very real. The company reported strong results and projected that its AI chip revenue could exceed $100 billion within the next few years, sending its stock sharply higher before the opening bell. For perspective, Broadcom's entire annual revenue today is under $70 billion.

Elsewhere, The Trade Desk jumped after reports that OpenAI had explored working with the advertising-technology firm. Cracker Barrel rallied on signs its turnaround plan might actually be working-proof that optimism can appear in the most unexpected corners of the market. Meanwhile, Morgan Stanley is reportedly cutting about 3% of its workforce.

The big variable remains oil. If tankers cannot move through the Strait of Hormuz, the consequences ripple quickly. Energy prices rise. Shipping costs climb. Inflation follows. And central bankers-who had hoped for a quiet year-suddenly find themselves back in crisis-management mode.

What a difference with the the start of the year! In January, the narrative looked reassuringly simple. Stocks would benefit from three powerful forces: interest-rate cuts from the Federal Reserve, massive investment in artificial intelligence, and fiscal stimulus in the United States and Europe. Many analysts expected another year of double-digit gains for major equity indexes.

Then the story began to change. First came turbulence around the AI trade itself, then came the war. The conflict between the United States and Iran, now entering its sixth day, has already stretched beyond the region. Military exchanges have intensified, political support in Washington has hardened, and officials have suggested the confrontation could last weeks. Meanwhile, the economic implications are spreading outward.

Thousands of ships have been delayed in and around the Persian Gulf. Oil producers are beginning to reduce output as storage fills with crude that cannot be shipped. Governments are scrambling to stabilize the flow of energy before the shock spreads through the global economy.

Yesterday's market rally offered a brief reminder that investors can still cling to hope. Western stock indexes rose after economic data suggested the U.S. economy remains solid. Private-sector hiring grew by 63,000 jobs in February. The ISM manufacturing index climbed above 50 for a second straight month, signaling expansion after nearly a year of contraction. Services activity reached its strongest level since late 2024. There was also a rumor that Iranian officials had reached out through intermediaries about potential talks with Washington.

Oil prices eased. Stocks rose. Technology companies led the rebound. European indexes recovered part of the heavy losses they had suffered earlier in the week, while U.S. markets closed broadly higher.

But hope, in markets as in geopolitics, tends to have a short half-life. Tehran denied the diplomatic outreach. Oil resumed its climb. And traders woke up this morning facing the same uneasy question: how long will this last?

Today's economic highlights:

On today's agenda: the balance of trade in Australia; industrial production in France; the unemployment rate in Switzerland; retail sales in Italy and the Euro Area; the construction PMI in the United Kingdom; the ECB monetary policy meeting accounts and President Lagarde's speech in the Euro Area; in the United States, initial jobless claims, unit labor costs, import and export prices, and nonfarm productivity. See the full calendar here.

  • Dollar index: 98.995
  • Gold: $5,167
  • Crude Oil (BRENT): $83.31 (WTI) $76.67
  • United States 10 years: 4.12%
  • BITCOIN: $72,980

In corporate news:

  • Brown-Forman plans to launch additional premium spirits brands in India over the next two to three years to capitalize on the country's fast-growing premium alcohol market.
  • Bunge is exploring alternative shipping routes to minimize disruptions from the Middle East conflict but says the impact on its ocean-going vessels remains limited.
  • Medline priced a secondary offering of 75 million shares at $41 each, with existing investors including Blackstone and Carlyle Group selling stakes.
  • Aptiv said a holding company for its electrical distribution systems unit priced an expanded $1.6 billion debt offering to support a planned spinoff.
  • Estee Lauder agreed to acquire the remaining stake it does not already own in Indian beauty brand Forest Essentials.
  • Tech Mahindra partnered with Microsoft to build an agentic AI platform for telecom and data mesh transformation.
  • Ford is recalling about 604,533 vehicles in the U.S. due to a windshield wiper motor issue that could reduce visibility and increase crash risk.
  • Japan's commercial launch ambitions suffered another setback after rocket startup Space One, backed by companies including Canon, IHI, and Shimizu, failed its third Kairos rocket launch.
  • Meta received a stern warning from Indonesia's government for insufficient action against disinformation and online gambling on its platforms.
  • Nvidia has halted production of China-bound H200 AI chips and shifted TSMC manufacturing capacity to its next-generation Vera Rubin hardware.
  • Exxon Mobil plans to ship gasoline from the U.S. Gulf Coast to Australia for the first time, highlighting disruptions in global fuel trade caused by the Middle East conflict.
  • South Africa is seeking local manufacturing of Gilead Sciences' HIV prevention drug lenacapavir to expand regional access.
  • Sanctions are forcing Lukoil to sell international assets worth about $22 billion, marking a major retreat from its global expansion strategy.
  • Broadcom gained 5% in after-hours trading following its quarterly results, reporting higher sales in the latest quarter, driven by a doubling of AI-related revenue to $8.4 billion.
  • Morgan Stanley will cut approximately 2,500 jobs, or 3% of its workforce, according to the WSJ.
  • CoreWeave signs multi-year partnership with Perplexity for AI inference.
  • Amazon is cutting jobs in its robotics division, according to Business Insider.
  • Johnson & Johnson launches J&J Direct to sell drugs directly to US consumers.

Analyst Recommendations:

  • American Airlines Group Inc.: Rothschild & Co Redburn downgrades to neutral from buy and reduces the target price from USD 17 to USD 12.50.
  • Builders Firstsource, Inc.: RBC Capital upgrades to outperform from sector perform with a target price of USD 119.
  • Meta Platforms, Inc.: Arete Research downgrades to neutral from buy and reduces the target price from USD 732 to USD 676.
  • Mongodb, Inc.: Scotiabank upgrades to sector outperform from sector perform and raises the target price from USD 275 to USD 310.
  • Telkonet: Wolfe Research downgrades to peerperform from outperform.
  • Adobe Inc.: Griffin Securities maintains its buy recommendation and reduces the target price from USD 605 to USD 405.
  • Bath & Body Works, Inc.: Goldman Sachs maintains its neutral recommendation and raises the target price from USD 17 to USD 26.
  • Broadcom Inc.: Baird maintains its outperform recommendation and raises the target price from USD 420 to USD 630.
  • Casey's General Stores, Inc.: BMO Capital Markets maintains its market perform recommendation and raises the target price from USD 540 to USD 700.
  • Coherent Corp.: Jefferies maintains its buy recommendation and raises the target price from USD 265 to USD 325.
  • Edison International: Argus Research Company maintains its buy recommendation and raises the target price from USD 65 to USD 85.
  • Intuit Inc.: CITIC Securities Co Ltd maintains its buy recommendation and reduces the target price from USD 821 to USD 628.
  • Okta, Inc.: Canaccord Genuity maintains its buy recommendation and reduces the target price from USD 120 to USD 95.
  • Southwest Airlines Co.: Rothschild & Co Redburn maintains its sell recommendation and raises the target price from USD 27 to USD 35.