Recap | 06 March 2026

1 day ago
14 min read

US demands Iran's capitulation to avoid protracted war
Middle East pressures Iran to contain retaliation; Israel expands front in Lebanon
Countries aim to secure energy infrastructure, maritime transit as fighting halts shipping
Iran war changes Russia's oil fortunes; Ukraine's drone expertise in demand

Risk assets falter amid energy price surge, credit concerns
February employment declines disappoint while retail sales underwhelm
Dueling risks from oil, weak labor market complicate Fed's dual mandate
Crypto and prediction market growing pains include lawsuits and stalled legislation

US resets Venezuela ties to open country for oil and mining business
Regime change eyed for Cuba with economy in freefall
Trade court tackles refunds as states challenge new tariffs
'Middle powers' look to source rare earths outside of US consortium

Anthropic designated supply chain risk against legal ambiguity, national security interests, cybercrime
US replaces head of DHS but immigration stance unchanged
Renewables to benefit from oil frictions amid rising temperatures, natural resource loss
Virginia to hold redistricting vote while legal challenge proceeds

Commentary - not advice.

EDWARD VON DER SCHMIDT

| Disclaimers

Headlines

US demands Iran's capitulation to avoid protracted war

War in Iran concluded its first week with President Trump demanding "absolute surrender" as aerial strikes and drone retaliation continued. The US has insisted on having a say in Iranian succession plans, objecting to consideration of the late supreme leader's son.

Regime change appears unlikely absent a land invasion, which Iranian officials say they are preparing for. The US and Israel have considered supporting Kurdish factions in the west to that end, but no such intervention has materialized.

A war of attrition raises asymmetric costs, where plentiful and cheap Iranian drones draw down limited and expensive missile defense systems.

Comment: The US strategy appears to rely on overwhelming bombardment compelling political capitulation at the risk of a more protracted conflict requiring ground forces.

Sources:

Trump rules out talks absent Iran's 'unconditional surrender' as Israel strikes Lebanon (AP)
Trump says he wants to be involved in picking Iran's next leader as war ripples across the region (AP; 3/5)
What to know as a son of Iran's late supreme leader is a possible candidate to replace his father (AP; 3/5)
House narrowly rejects Iran war powers resolution in test of Trump's strategy (AP; 3/5)
Trump demand's Iran's 'unconditional surrender,' complicating diplomatic paths (Reuters)
Trump wants say on Iran's next leader as war intensifies (Reuters; 3/5)
US House rejects war powers resolution, backs Trump on Iran war (Reuters; 3/5)
Trump Demands Iran Relent as US Aims to Calm Energy Markets (Bloomberg)
Iran Hits Key US Radar, Deepening Gulf Missile Defense Woes (Bloomberg)
Trump Says Defense Firms to Quadruple Output of Some Weapons (Bloomberg)
Who's Who in Iran? Guide to the Islamic Republic's Power Players (Bloomberg)
Trump Is Rewriting the Iran Endgame in Real Time (WSJ)
Iran's High-Risk Strategy for a No-Limits Middle East War (WSJ)
Pentagon Races to Secure Money for Iran Operations, Munitions (WSJ; 3/5)

See also:

Kurdish Iranian dissidents in Iran deny attack plans but say they would join a US invasion of Iran (AP)
What to know about the Kurds and their potential involvement in the Iran war (AP; 3/5)
Exclusive: Israel backing Iranian Kurdish plans to seize Iran border areas, sources say (Reuters)

Middle East pressures Iran to contain retaliation; Israel expands front in Lebanon

The expanding theater of war - including Israel's growing campaign against Hezbollah in Lebanon - has raised existential concerns for regional neighbors. They have sought to remove themselves from the hostilities only to be subjected to Iran's indiscriminate counterattacks. Major population centers and infrastructure have come under fire, presenting longer-term economic and reputational threats.

Many countries have called for a measure of containment to protect their interests. Gulf states have sought diplomatic and other means to dissuade Iran from further antagonism.

Update: On Saturday, Iranian President Pezeshkian apologized for the lack of coordination in their military response, pledging to avoid attacking regional neighbors further unless provoked. While this may greatly diminish the risk of spiraling retaliation engulfing the Middle East, US demands have not changed and hostilities will continue.

Sources:

Gulf allies complain US didn't notify them of Iran attacks and ignored their warnings, sources say (AP)
Israel strikes Beirut's southern suburbs after issuing a blanket evacuation order (AP; 3/5)
Israeli airforce pounds Beirut, Lebanon death toll rises (Reuters)
Exclusive: Saudi Arabia Has Intensified Engagement With Iran to Defuse War (Bloomberg)
Trump Faces Criticism From UAE Business Community Over Iran War (Bloomberg)
The Iran War Is Hitting Gulf Markets, Lifting Israel and Shifting Risk Across the Region (WSJ)
The Trillions of Dollars of U.S. Investment at Stake in the Gulf (WSJ)
Large-Scale Attacks Intensify Tensions in Middle East (WSJ)
It's Missile Threat Degraded, Iran Is Taking Fewer Shots at More Targets (WSJ; 3/5)
Exclusive: U.A.E. Explores Freezing Iranian Assets to Punish Tehran for Attacks (WSJ; 3/5)

See also:

Germany's Merz warns against spread of war in Middle East (Reuters)
EU countries joining US, Israel attacks would become Iran's "legitimate target", Deputy Minister says (Reuters)
EU's Costa, von der Leyen talk to Middle Eastern leaders on Monday, spokesperson says (Reuters)
Merz Warns of Economic Damage Due to 'Endless' War Against Iran (Bloomberg)

Countries aim to secure energy infrastructure, maritime transit as fighting halts shipping

To date, the fighting has crippled transit through the vital Strait of Hormuz - akin to a stroke. Coupled with refineries and other processing facilities going offline as storage capacities are exhausted, the effective blockage of the strait has restricted the flow of oil and natural gas (especially to Asia). Shipping and insurance costs have risen commensurately with the hazards of war and the curtailed movement of goods and people.

While countries around the world seek to source and stockpile energy imports, critical resources including fertilizer and exports essential to chip production have also been affected to threaten additional supply chain disruptions.

Update: Given international pressure to secure transit through the Strait of Hormuz, Saturday's announcement that Iran would pull back the scope of its attacks may bode favorably for maritime security and the resumption of energy production and other vital shipping activity.

Sources:

US-Israel war with Iran sends shockwaves through global business (Reuters)
Qatar energy minister warns war will face Gulf to halt energy exports within weeks, FT says (Reuters)
More tankers come under attack as US-Iran conflict spreads in the region (Reuters; 3/5)
US to reinsure maritime losses in Gulf up to about $20 billion (Reuters)
Maritime insurance premiums surge as Iran conflict widens (Reuters)
Iran crisis could disrupt supply of key chipmaking materials, South Korea warns (Reuters; 3/5)
Maersk suspends two shipping services due to Middle East crisis (Reuters)
Iran war chokes aid corridors, obstructing global relief efforts (Reuters)
Asia struggles to find fuel oil as Middle East exports plummet, sources say (Reuters)
China in talks with Iran to allow safe oil and gas passage through Hormuz, sources say (Reuters; 3/5)
Russian fertiliser makers can't offset potential Iran-related supply crunch, sources say (Reuters)
Traders Warn $100 Oil Is Imminent If Iran War Keeps Raging (Bloomberg)
US Launches $20 Billion Reinsurance Plan to Ease Gulf Oil Trade (Bloomberg)
Strait of Hormuz Shipping Is at Near-Total Halt, JMIC Says (Bloomberg; 3/5)
Iran War Spurs Scramble for Energy Export Routes Out of Gulf (Bloomberg)
Reinsurers Triple Ship Insurance Costs After US Torpedo Attack (Bloomberg)
China Tells Top Refiners to Halt Diesel and Gasoline Exports (Bloomberg; 3/5)
Queues, Price Hikes and Shortages as Asia Battles Fuel Crunch (Bloomberg)
America Braces for Oil Shock as Iran War Throttles Supply (WSJ)
Exclusive: Kuwait Cuts Oil Production as Fallout From Iran Conflict Intensifies (WSJ)
Maersk and Hapag-Lloyd Suspend Key Middle East Shipping Routes (WSJ)
Korea Warns That Prolonged Middle East Conflict Could Hurt Chip Industry (WSJ; 3/5)

Iran war changes Russia's oil fortunes; Ukraine's drone expertise in demand

The US and Israeli war with Iran has dramatically altered the landscape of peace negotiations between Russia and Ukraine. Surging oil prices and sanctions relief from countries seeking to address supply shortages represent a fiscal boon for Russia's war-battered finances.

At the same time, Russian intelligence provision to Iran risks drawing the White House's ire even though US officials have downplayed its importance. Note that the US provides intelligence to Ukraine.

Russia's reduced incentives to accelerate negotiations will prolong the conflict in Ukraine. However, Ukrainian drone expertise has never been in greater demand and represents important leverage and an opportunity for closer collaboration with the US and European partners. No one is more proficient in dealing with Iran's ubiquitous Shahed drones.

Update: Iran's pledge to reduce the scope of its attacks may allow for a faster normalization of energy supplies to Russia's detriment, but this may also reduce the near-term impetus for countries to partner with Ukraine on drone defense.

Sources:

Russia has provided Iran with information that can help Tehran strike US military, AP sources say (AP)
A boost for Moscow in the shadow of Iran war: US allows India to buy Russian oil for a month (AP)
US and Mideast countries seek Kyiv's drone expertise as Russia-Ukraine talks put on ice (AP; 3/5)
Russia is providing Iran intelligence to target US forces, Washington Post reports (Reuters)
Russia gets export boost from Iran war as price of oil to India surges (Reuters)
US Grants Temporary Waiver for India to Import Russian Oil (Bloomberg; 3/5)
Indian Refiners Are Snapping Up Russian Oil After US Waiver (Bloomberg)
Bessent Says US May 'Unsanction' More Russia Oil Post India Move (Bloomberg)
Putin Urges End to Hostilities in Call With Iran's Pezeshkian (Bloomberg)
Russia Secretly Sharing Location of U.S. Targets With Iran, U.S. Officials Say (WSJ)

See also:

Hungary's top diplomat stokes anger at anti-Ukraine protest with allegation of election meddling (AP)
Zelenskyy says he's reluctant to repair pipeline that brings Russian oil to Central Europe (AP; 3/5)
Russia warns Finland it will be more vulnerable if it hosts nuclear weapons (Reuters)
Lithuania says Russia is expanding military units on NATO borders (Reuters)
For the First Time, U.S. Sides With Russia and China in Ukraine Energy Dispute (WSJ; 3/5)

Markets & Economies

Risk assets falter amid energy price surge, credit concerns

Crude oil posted some of its largest intraday and weekly gains in years as acute shortages triggered concerns of cascading costs. Material gas price increases introduced new political risk and could unsettle inflation expectations if sustained.

Rising energy costs present a significant headwind to profitability and have weighed on stocks while amplifying private credit fears amid rising borrowing rates. Together these highlight the increasing precariousness of risk assets.

Sources:

Oil surges to its highest price since 2023, and stocks drop after data shows a weaker US job market (AP)
US stocks close down as oil spikes 12%, job market weakens (Reuters)
Europe stocks mark biggest weekly drop in almost a year as Middle-East conflict persists (Reuters)
Oil derivatives signal traders see Middle East shock as short-lived (Reuters)
Exclusive: Trump on rising gas prices during Iran operation: 'If they rise, they rise' (Reuters)
US pump prices surge as Iran war upends global energy supply (Reuters)
White House seeks bolder action on energy prices amid Iran conflict (Reuters)
US Oil Posts Biggest Weekly Gain Ever as Iran War Rages On (Bloomberg)
Oil Leaps, Stocks Fall on War and Credit Fears: Markets Wrap (Bloomberg)
Shrinking Labor Force, Surging Oil Prices Drive Stocks to Worst Week Since April (WSJ)

See also:

US private credit defaults hit record 9.2% in 2025, Fitch says (Reuters)
Banks, Asset Manager Stocks Fall as Credit Concerns Persist (Bloomberg)
Secondary Buyers Eye Private-Credit Assets as Redemptions Mount (WSJ)

February employment declines disappoint while retail sales underwhelm

An unanticipated reduction in jobs and pickup in unemployment in February challenged narratives of labor market stability. Relatively weak retail sales figures further clouded the domestic economic outlook.

Sources:

The US lost a surprising 92,000 jobs last month as the unemployment rate ticked up to 4.4% (AP)
Retail sales fall modestly in January as American consumers pull back on spending (AP)
Unexpected job losses, rise in unemployment rate fan US labor market doubts (Reuters)
Surprise Drop in US Payrolls Casts Doubt on Steadying Job Market (Bloomberg)
Here Are the Key Takeaways From the US Jobs Report for February (Bloomberg)
US Retail Sales Fell in January on Fewer Vehicle Purchases (Bloomberg)
US Loses 92,000 Jobs in Widespread and Unexpected Downturn (WSJ)
U.S. Retail Sales Sagged in January (WSJ)

See also:

How War in Iran Is Colliding With Trump's Economic Priorities (WSJ)

Dueling risks from oil, weak labor market complicate Fed's dual mandate

Sustained oil and gas price rises threaten to raise costs across the economy and unanchor inflation expectations if consumers and businesses begin to anticipate ever-higher price adjustments that could be aggravated by tariffs. If energy market and logistics disruptions prove more lasting than transitory, this would represent a substantial risk to the Fed's mandate with inflation already above-target for five years running.

On the other hand, a rapid deterioration in labor market conditions might mitigate inflation concerns if demand retreats and firms lose pricing power - absent a sustained input cost supply shock. These dueling challenges complicate the Fed's dual mandate of achieving maximum employment in the context of price stability.

Accordingly, Fed officials have conveyed a split over which threats (employment, inflation) are more pressing. Regardless, the FOMC is likely to remain on hold at its March meeting and in the months ahead to better assess the balance of risks given clarity on faltering domestic employment and the scope of war in the Middle East. Key inflation data will be released in the week ahead.

For more on how the Fed deals with goal tension: Points | The Fed's Consensus Statement, Annotated

Sources:

Fed faced with hard choice on weak jobs, high inflation (Reuters)
Fed's Schmid says hiring is on pause amid AI, aging (Reuters)
Amid oil shock uncertainty, Fed's Hammack says central bank must lower inflation (Reuters)
Fed's Collins sees rate policy holding steady for some time (Reuters)
Fed's Daly: job market vulnerable, but risks two-sided (Reuters)
Fed's View of Stabilizing Employment Gets Tested by Surprise Slump (Bloomberg)
Fed's Waller Doesn't See Sustained Inflation from Iran War (Bloomberg)
Fed's Bowman Says Labor Market May Need More Support (Bloomberg)
Fed's Daly Says Labor Market Weakness Shows Risks Persist (Bloomberg)
Fed's Hammack Says She Sees Two-Sided Risks to Interest Rates (Bloomberg)

See also:

Global bond markets tumble on inflation fears (Reuters)
ECB policymakers warn of inflation spike if Iran war lasts (Reuters; 3/5)
Bond Traders Pile Into Inflation Hedges as War Drives Up Oil (Bloomberg)
Bonds Pare Worst Weekly Loss Since April on Labor, Oil Angst (Bloomberg)
ECB Must Be 'Vigilant' to Upside Price Risks, Schnabel Says (Bloomberg)

Crypto and prediction market growing pains include lawsuits and stalled legislation

Prediction and crypto markets continue to undergo growing pains in their quest to encourage greater institutional adoption. A lack of guardrails and contract clarity in prediction markets will not preclude high-profile initial public offerings (IPOs), however.

Meanwhile, a dispute between banks and crypto custodians over interest-like "rewards" on cryptocurrency deposits has stalled pivotal stablecoin legislation.

Sources:

Kalshi sued over ouster of Iran leader prediction market (Reuters)
Crypto bill hits new impasse, raising doubts over its future (Reuters; 3/5)
Bitcoin's Correlation With Stocks Surges as Volatility Returns (Bloomberg)
Exclusive: Kalshi and Polymarket Are Each Eyeing Roughly $20 Billion Valuations (WSJ)
'Is This Insider Information?' The Prediction Market Bets Driving a Campus Frenzy (WSJ; 3/5)

Around the World

US resets Venezuela ties to open country for oil and mining business

The US diplomatic reset with Venezuela gathered pace after Interior Secretary Burgum's visit to Caracas. The US is seeking to leverage Venezuelan oil while establishing strategic mining interests.

Sources:

US issues a license that authorizes sales of Venezuelan gold (AP)
US and Venezuela agree to reestablish diplomatic relations in major shift after Maduro's ouster (AP; 3/5)
Venezuela is offering security assurances to foreign mining companies, US interior secretary says (AP; 3/5)
After official hails mining potential, US allows some transactions of Venezuelan gold (Reuters)
Venezuelan Oil Cargoes Are Surging at an Opportune Time (WSJ; 3/5)
U.S. Looks to Tap Venezuela's Lawless Mineral Frontier (WSJ)

Regime change eyed for Cuba with economy in freefall

In contrast, the US Department of Justice (DOJ) is reportedly exploring avenues to exert pressure on the Cuban regime or perhaps create pretext for intervention. The administration has drawn attention to the collapse of basic services and governance on the island as a harbinger of imminent change.

Iran remains a priority for now. Pressure on Cuba is also consistent with the Trump administration's muscular approach to hemispheric security.

Source:

DOJ Official Pushes for Cases Against Cuban Leaders, as Trump Eyes Regime Change (WSJ)

See also:

Jamaica to end decades-long agreement with Cuba over medical missions criticized by US (AP; 3/5)
Trump takes forceful steps to pressure Latin American leaders to reduce China ties (AP; 3/5)

Trade court tackles refunds as states challenge new tariffs

While Customs and Border Patrol (CBP) finalizes a streamlined process to initiate tariff refunds, a group of states has sued to block temporary Section 122 tariffs ostensibly enacted to address balance of payments issues.

Trading partners are seeking assurances that the levies imposed in the wake of the Supreme Court's ruling invalidating IEEPA tariffs wont' breach the terms of previously announced trade agreements.

Sources:

Customs and Border Protection official says new process for tariff refunds could be ready in 45 days (AP)
US customs agency expects tariff refund system to be ready in 45 days (Reuters)
Twenty-four US states file lawsuit to stop Trump's latest global tariffs (Reuters; 3/5)
Japan asked US not to disadvantage Tokyo under new tariff rules (Reuters)
Japan Seeks Exemption From US Tariff Hike Amid Trade Concerns (Bloomberg)
States Sue to Stop Trump's Latest Global Tariff (WSJ; 3/5)
Judge Gives Trump Administration More Time to Distribute Tariff Refunds (WSJ)

'Middle powers' look to source rare earths outside of US consortium

In addition a US-led initiative, some G7 nations are exploring other means of securing rare earths - for which demand is expected to climb significantly.

Source:

Japan, France, Canada work on alternatives to US-led trade bloc for rare earth supplies (Reuters)

See also:

Demand for minerals to power technology could triple by 2030, UN political chief says (AP; 3/5)

Odds & Ends

Anthropic designated supply chain risk against legal ambiguity, national security interests, cybercrime

The Department of Defense / War formally designated Anthropic a supply chain risk, which the company intends to challenge in court. The designation complicates the use of Anthropic software by government vendors, potentially even for non-defense purposes.

The Pentagon is seeking to remove any restrictions on its ability to use artificial intelligence software for any lawful purpose.

The dispute comes amid broader legal uncertainties over the use of AI tools and the increasing prominence of nation-state and criminal cyber exploitation.

Sources:

Pentagon says it is labeling AI company Anthropic a supply chain risk 'effective immediately' (AP)
Pentagon designates Anthropic a supply chain risk (Reuters; 3/5)
US draws up strict new AI guidelines amid Anthropic clash, FT reports (Reuters)
Anthropic at Risk of Huawei-Like Ban After Pentagon Punishment (Bloomberg)
Anthropic CEO Says It Will Fight New Pentagon Move as CEO Apologizes for Leaked Memo (WSJ)

See also:

OpenAI hit with lawsuit claiming ChatGPT acted as an unlicensed lawyer (Reuters; 3/5)
Proposed New York law would bar AI chatbots from posing as lawyers, allow duped users to sue (Reuters; 3/5)
Trump Signs Order to Bolster Efforts to Combat Cybercrime (Bloomberg)
Trump Signs Executive Order Aimed at Cybercrime Gangs (WSJ)
Exclusive: China Suspected in Breach of FBI Surveillance Network (WSJ)

US replaces head of DHS but immigration stance unchanged

Senator Markwayne Mullin replaced Kristi Noem as the acting head of the Department of Homeland Security (DHS). The administration's immigration priorities have not changed.

Comment: Reduced migration leading to declining population growth and associated activity represent a latent risk to long-term output potential.

Sources:

Trump fires Homeland Security Secretary Noem after mounting criticism over her leadership (AP; 3/5)
Trump to forge ahead with immigration crackdown driven by top aide Stephen Miller (Reuters)
Trump Ousts Kristi Noem from DHS (WSJ)

Renewables to benefit from oil frictions amid rising temperatures, natural resource loss

Bloomberg profiled climate studies examining the pace of global temperature rises, natural resource destruction's implications for interest rates, and how renewables industries stand to benefit from energy market dislocations.

Sources:

How Fossil Fuel Disruptions Lead to Booms in Solar and Batteries (Bloomberg; 3/5)
Earth Is Warming Faster Than Previously Estimated, New Study Shows (Bloomberg)
Nature Loss Tied to Higher Government Borrowing Costs in New Study (Bloomberg)

Virginia to hold redistricting vote while legal challenge proceeds

The Supreme Court of Virginia allowed a redistricting referendum to go forward while the case proceeds in a lower court. A swing in favor of Democrats of up to four House seats is in play in November's midterm elections.

Source:

Virginia court allows a referendum on Democratic-led redistricting that could flip 4 US House seats (AP; 3/4)

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Sources were published/accessed on the date of the Recap unless otherwise noted. Article headlines are subject to change and may not correspond to those given here.

This is not advice - financial or otherwise - and should not be taken as such.