Recap | 09 March 2026

58 minutes ago
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Iran war extends reach, rhetoric escalates despite stated progress toward US goals
Ayatollah Mojtaba Khamenei named supreme leader as hardliners assert control in Iran
Fighting increasingly disrupts energy production and Strait of Hormuz transit
US and G7 seek to alleviate oil and gas shortages

Tumultuous oil trading points to exceptional uncertainty
Prospects for accelerated peace lead to turnaround in stocks and government bonds
Inflation concerns stemming from oil shock constrain monetary policy
Equity tokenization and prediction wagers take steps toward exchange trading

Europe's precautionary militarization follows wars in Ukraine, Middle East
US hosts LatAm summit to combat narcoterrorism
US, South Korea hold joint military exercises
China focuses on economic opportunity while competing with US

Anthropic takes White House, Pentagon to court
Insatiable AI hardware demand worsens lasting memory shortages
2020 investigations, SAVE Act highlight push for federal control of elections before midterms

Commentary - not advice.

EDWARD VON DER SCHMIDT

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Headlines

Iran war extends reach, rhetoric escalates despite stated progress toward US goals

The trajectory of the war in Iran remains uncertain, despite this weekend's pledge from Iran's president not to attack neighbors unless provoked and President Trump's assertion on Monday that US objectives were nearly complete. Revolutionary Guard forces lobbed missile and drone attacks at Saudi Arabia, Kuwait, and others while targeting US sites and critical infrastructure in vowing to extend and expand the conflict.

While the US expressed confidence in its aim to destroy Iran's ballistic missile program after decimating its leadership, navy, and other military assets, President Trump also stated that "we're going to go further" and "we haven't won enough." The Pentagon indicated that the fight had "only just begun", contradicting the expedited timeline put forward by the administration.

Comment: Iran's goal appears to be a war of attrition in which it inflicts as much collateral damage on the region and global markets as it can get away with in order to compel others to intervene to stop the fighting. The US endgame and pain threshold are unclear, but defensive armaments are not limitless and continued war risks escalating damage and casualties.

Sources:

Iran fires drones toward Saudi Arabia and Kuwait (AP)
Here are the Iran war's biggest unknowns, From Tehran's new leader to oil prices (AP)
Iran says oil block will continue until attacks end, Trump threatens to hit harder (Reuters)
Iran bets on endurance, energy disruption to outlast US, Israel (Reuters)
Trump says war could be over soon as Iran rallies behind new hardline leader (Reuters)
Trump Says War Will Resolve 'Very Soon,' Lifting Oil Sanctions (Bloomberg)
US Considers Idea of Special Operation to Seize Iran's Uranium (Bloomberg; 3/8)
Trump Advisers Urge Him to Find Iran Exit Ramp, Fearing Political Backlash (WSJ)
Iran's Leadership Signals It Is Still in Control and Able to Fight (WSJ)

See also:

Israel renews assault on Lebanon after Netanyahu promises 'many surprises' in next phase of war (AP; 3/7)
Almost 700,000 displaced in Lebanon as war enters second week (Reuters)
Lebanon Seeks Direct Talks With Israel to End Hezbollah Fighting (Bloomberg)

Ayatollah Mojtaba Khamenei named supreme leader as hardliners assert control in Iran

The selection of Ayatollah Mojtaba Khamenei by Iran's Assembly of Experts to follow his father as supreme leader edified the position of hardline factions as well as the IRGC's power and effective control. Drawing rebukes from the US and Israel, the younger Khamenei's ascension signaled entrenched resistance and a more difficult path to peace. The choice shed light on the absence of any moderate or reformist movement, let alone viable opposition.

Comment: Our previous reaction to President Pezeshkian's apology and pledge was premature and incorrect. While the president may have sought to defuse tensions with Saudi Arabia, the UAE, and others, the transition council appears to have lacked meaningful influence over the IRGC, who are leading Iran's military response and have threatened escalation.

Sources:

Iran names Mojtaba Khamenei to succeed his father as supreme leader and Saudi sharpens warning (AP; 3/8)
Iran names Khamenei's hardline son Mojtaba as new supreme leader, oil surges (Reuters)
Iran hardliners rally behind new leader, unsettling global markets (Reuters)
Iran Signals No Letup in War as Khamenei's Son Made Leader (Bloomberg)
Iran Picks Supreme Leader's Son to Run Country (WSJ)

Fighting increasingly disrupts energy production and Strait of Hormuz transit

The burgeoning war has increasingly disrupted energy production and shipping as key infrastructure - including desalinization plants vital to the water supply - has come under attack. Gulf countries are looking toward their own defense but remain vulnerable to attack with Iran targeting US military sites, defensive assets, and diplomatic outposts.

Several major oil and gas facilities have been taken offline indefinitely. In addition to production cuts, minimal passage through the Strait of Hormuz has strangled supplies of other key resources including aluminum.

Comment: The concentration of blocked shipments - namely to Asia - will compound production difficulties beyond elevated oil and gas prices generally as affected countries grapple with acute shortages.

Sources:

Crude oil prices surpass $100 a barrel as the Iran war impedes production and shipping (AP; 3/8)
Iran war puts at risk key pipelines, terminals and refineries that supply the world with oil and gas (AP)
How US-Israeli war on Iran is upending global business (Reuters)
How the Iran War Is Disrupting Global Oil and Gas Supply (Bloomberg)
Oil, Gas Prices Surge as Iran War Forces Gulf Producers to Cut Output (WSJ)
The Long-Feared Persian Gulf Oil Squeeze Is Upon Us (WSJ; 3/8)

See also:

Exclusive: Trump's Gaza plan on hold as Iran war pauses disarmament talks, sources say (Reuters)

US and G7 seek to alleviate oil and gas shortages

In response to shortages, unprecedented oil price swings, and budding concerns of prolonged energy supply disruptions and resurgent inflation narratives, the US, G7, and others weighed response measures and potential coordination. These include the release of strategic reserves, temporary lifting of sanctions, and various caps and subsidies.

Comment: While many leaders and officials publicly expect only limited dislocations, risks from an extended crisis can quickly spiral as costs, shortages, and delays propagate throughout the global economy.

Sources:

Exclusive: Trump reviews options to curb energy prices as Iran strikes roil markets (Reuters)
US considering selling oil from strategic reserve, US energy chief says (Reuters)
G7 ready to act on oil surge but holds off tapping reserves (Reuters)
G7 Ready to Release Oil Stocks If Needed But 'Not There Yet' (Bloomberg)
U.S. and Western Allies Turn to Reserves to Counteract Gulf Oil Crisis (WSJ)

Markets & Economies

Tumultuous oil trading points to exceptional uncertainty

Monday's oil price swings of up to 30% were breathtaking. Although crude retraced much of its climb as markets evaluated the prospect - likely or not - of a quick resolution to the war, the intraday volatility pointed to thin liquidity and tremendous outlook uncertainty. Gas prices appeared to rise inexorably.

Sources:

Crude oil prices spike as a broadening Iran war threatens both transport routes and production (AP)
Oil prices jump 7% on Iran war, settle at highest since 2022 (Reuters)
Oil Plunges After Trump Signals Iran War Will End 'Very Soon' (Bloomberg)
Dollar Falls With Oil as Trump Signals Iran War End Is Near (Bloomberg)
The 24 Hours When Oil Markets Went Wild (WSJ)

See also:

Middle East shipping disruptions propel aluminium to four-year highs (Reuters)

Prospects for accelerated peace lead to turnaround in stocks and government bonds

More sanguine prospects for peace, however fleeting, spurred a turnaround in US equities after losses overnight and at the morning open. Government bonds also recovered after selling off in accordance with inflation fears.

Comment: Bonds offer a fixed rate of return. In order to compensate for the loss of purchasing power arising from inflation, investors demand a greater implied return or yield. Given a bond with fixed payment and maturity characteristics, lowering the bond's price raises its implied rate of return - hence the inverse relationship between price and yield.

When investors demand higher compensation in the form of yield, bond prices must fall. Conversely, when demand to purchase bonds pushes prices higher, yields decline as a result.

Sources:

US stocks trim much of an early drop as market remains twitchy after oil spikes to nearly $120 (AP)
Shares slip, dollar gains as surging oil prices stoke inflation fear (Reuters)
Wall St ends higher as hopes of Iran war resolution affect inflation fears (Reuters)
Global bond markets plunge as oil surge towards $120 prompts rate hike bets (Reuters)
Stocks Climb as Trump Hints War Could Be Over Soon: Markets Warp (Bloomberg)

Inflation concerns stemming from oil shock constrain monetary policy

The growing possibility of an inflationary supply shock has complicated central banks' decision-making. Weak demand may still yield to more restrictive monetary inclinations if price pressures dominate policy discussions.

It's worth noting that the latest Survey of Consumer Expectations, concluded before the onset of the Iran war, reflected stable inflation expectations (which are now stale).

Comment: Oil and gas price rises become a much more intractable problem if they lead people to believe that prices across the economy will continue to increase at a faster rate. Preventing this is what central banks mean by keeping inflation expectations anchored. In many ways, the battle against inflation is psychological.

Sources:

Iran war fuels central bank rate hike bets on inflation fears (Reuters)
Iran conflict forces Asian central banks into sharp policy rethink (Reuters)
NY Fed survey finds relative calm in inflation expectations ahead of Iran war (Reuters)
Inflation Expectations Largely Steady in Fed Survey (Bloomberg)

See also:

Germany's Industrial Rebound Stumbles as Orders, Production Fall (WSJ)
China Consumer Inflation Beats Expectations on Holiday Boost (WSJ; 3/8)

Equity tokenization and prediction wagers take steps toward exchange trading

Crypto and prediction markets continue to take incremental steps toward mainstream trading. The Nasdaq exchange is looking to offer tokenized stock trading, wherein blockchain technology will be used to transact and settle shares directly. Meanwhile, Cboe (formerly the Chicago Board Options Exchange) is eyeing a move into prediction markets with fractional (as opposed to binary-only) payouts.

Comment: Having major equity and options exchanges facilitate blockchain settlement and standardized prediction wagers is an important step toward eventual institutional adoption, but legal frameworks and regulatory clarity are lacking.

Sources:

Cboe to launch prediction market contracts beyond binary bets, offering partial payouts (Reuters)
Exclusive; Nasdaq Partners With Kraken in Plan for 24/7 Tokenized Stock Trading (WSJ)
Tokenized Stocks Are Coming to a Market Near You: Five Things to Know (WSJ)

See also:

Oil Trades Are Booming on 24/7 Crypto Exchange Hyperliquid (Bloomberg)

Around the World

Europe's precautionary militarization follows wars in Ukraine, Middle East

The wars in Ukraine and Iran have forced Europe to pursue greater military preparedness, whether to secure the Mediterranean or contend with Russia's antagonism. France is leading naval and nuclear deployments while the EU explores new defense agreements and the bloc quietly amasses arms.

Sources:

Europe rallies around Cyprus days after the Iran war's first drone attack on EU territory (AP)
EU can no longer rely on 'rules-based' system against threats, von der Leyen says (Reuters)
France to deploy almost dozen warships, mulls Hormuz mission, Macron says (Reuters)
Europe new world's biggest arms importer, think tank says (Reuters; 3/8)
EU to sign defence partnerships with Australia, Iceland and Ghana, Kallas says (Reuters)

See also:

Ukraine seeks more talks, but Kyiv's partners focused on Iran, Zelenskiy says (Reuters)
Putin says energy crisis has arrived but Russia is ready to work with Europe (Reuters)
Kremlin: Putin, in a phone call with Trump, shares proposals to end Iran war quickly (Reuters)
U.S. Army Sends Ukraine-Tested Drones to Hit Iran's Drones (WSJ; 3/7)

US hosts LatAm summit to combat narcoterrorism

The US hosted a regional security summit with leaders from Latin America in which it encouraged military intervention to combat drug trafficking in an initiative dubbed "Shield of the Americas".

Comment: The Trump administration has not been shy about exerting its influence in the Western Hemisphere.

Sources:

Trump encourages Latin American leaders to use military action to help US fight cartels (AP; 3/7)
Aggressive Trump launches Latin America cartel coalition (Reuters; 3/7)

See also:

Security Hardliner Could Become Colombia's First Woman President (Bloomberg)

US, South Korea hold joint military exercises

The US began joint "Operation Freedom Shield" exercises with South Korea. Japan also tested new missiles amid latent tension in the Indo-Pacific.

Sources:

US begins large military drill with South Korea while waging war in the Middle East (AP; 3/8)
Japan prepares for deployment of its first home-developed long-range missile (AP)

See also:

NATO drills for war in Arctic with focus on civilians being ready (Reuters)

China focuses on economic opportunity while competing with US

China's foreign minister Wang Yi spoke to opportunities for economic cooperation with the US alongside the countries' accelerating technological competition.

At the same time, President Xi continued military purges to further his consolidation of power.

Sources:

China hopes 2026 will be a 'landmark year' for relationship with US (AP; 3/8)
What China's latest economic plans say about its tech ambitions and rivalry with the US (AP; 3/8)
China's Xi calls for political loyalty in the military as anti-corruption purge widens (AP; 3/7)

Odds & Ends

Anthropic takes White House, Pentagon to court

Anthropic PBC filed multiple lawsuits in federal court to challenge the company's designation as a supply chain risk as well as a federal government ban.

Comment: The Anthropic vs. DOD confrontation raises an important societal question: under what circumstances are the mass surveillance of Americans and the use of autonomous weapons lawful?

Sources:

Anthropic sues Trump Administration seeking to undo 'supply chain risk' designation (AP)
Anthropic sues to block Pentagon blacklisting over AI use restrictions (Reuters)
Anthropic Sues US Government Over Supply Chain Risk Label (Bloomberg)
Anthropic Sues U.S. Defense Department, Pete Hegseth for Targeting the Company (WSJ)

See also:

Microsoft taps Anthropic for Copilot Cowork in push for AI agents (Reuters)
How AI Is Turbocharging the War in Iran (WSJ)

Insatiable AI hardware demand worsens lasting memory shortages

In its latest earnings release, Hewlett Packard Enterprise (HPE) lifted its revenue forecasts but cautioned that memory chip shortages could last through next year.

Comment: Memory chip shortages don't just present a risk to profitability from higher input costs - they threaten to raise prices and reduce production across the digital ecosystem, especially in mobile and consumer goods.

In this way, the relentless drive to invest in data center AI processing could very well kneecap broader growth and innovation by stifling the availability of sufficiently capable digital processors.

Sources:

HPE Projects Sales That Top Estimates on AI Hardware Demand (Bloomberg)
HPE Revises Earnings Outlook, Expects Memory Shortage to Persist (WSJ)

2020 investigations, SAVE Act highlight push for federal control of elections before midterms

President Trump insisted that Congress pass the SAVE Act despite filibuster hurdles in the Senate. Meanwhile, spurious investigations into the 2020 elections may offer a pretext for federal intervention in midterm voting as the White House faces the possibility of losing control of Congress after November.

Sources:

FBI examines Arizona election records in widening probe of Trump vote fraud claims (Reuters)
Trump again presses Congress on voter bill, says he will not sign other legislation (Reuters; 3/8)
GOP Leader Warns Trump on Muscling Senate Over Voting Bill (Bloomberg)

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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.