With the news over the past weekend, it seems like last week was an eternity ago. Throughout the week, equities moved higher and lower on good news and bad, with no real direction. Earlier in the week, there were fears that Artificial Intelligence (AI) would take millions of jobs and push unemployment into double digits. Later in the week, news of an imminent attack in Iran sent traders fleeing markets and scrambling to a flight to quality in U.S. Treasuries. In our view, it’s pretty simple: markets hate uncertainty. Whether it’s questions around AI, global markets, consumer demand, or broader risks to economic growth, uncertainty is what tends to drive volatility. These are the times for investors to understand why long-term investment plans include diversified portfolios with exposure to varied asset classes. With buyers increasing their U.S. Treasury exposure last week, the 10-year Treasury yield fell 14 basis points, closing at 3.94%.

U.S. & Global Economy

• Against this backdrop of heightened geopolitical risk and macro uncertainty, investors executed a classic flight to quality into U.S. Treasuries, driving yields lower across the curve. Safe-haven demand pushed the 10-year Treasury yield down sharply from recent highs, while shorter-term yields also retraced, flattening the curve as risk assets wavered amid escalating Middle East tensions and the resulting attacks by the U.S. and Israel on Iran’s leadership. This repricing reflected broad risk aversion and was accompanied by tighter financial conditions, even as last week’s economic data painted a somewhat mixed picture, with consumer confidence coming in better than expected while the Producer Price Index surprised to the upside, reinforcing lingering inflation pressures. Together, the crosscurrents of geopolitical strain and uneven macro signals have kept investors focused on capital preservation as markets balance growth resilience against persistent price pressures.

Policy and Politics

• Geopolitical risk moved back to the forefront over the past week, injecting fresh volatility into markets and pushing crude prices higher as traders priced in supply-disruption risk. Oil benchmarks climbed several percentage points on the week and held near recent highs as diplomatic efforts between Washington and Tehran showed little progress, and officials signaled that key U.S. conditions remained unmet. The backdrop was further complicated by stalled Ukraine-Russia negotiations, which reinforced concerns about ongoing sanctions pressure on Russian exports and kept energy markets sensitive to headline risk.
• Tensions escalated sharply at the start of March following reported U.S.- and Israel-linked strikes on Iranian targets and subsequent retaliatory actions, heightening fears of broader regional conflict and potential disruption to shipping through the Strait of Hormuz, a critical artery for global oil flows. Some carriers reportedly scaled back transit activity, adding to the risk premium.

Markets will navigate a complex mix of geopolitical tensions and key economic catalysts this week. Front and center this week is the U.S.–Israel joint military strike on Iran and the potential ripple effects across energy markets, particularly any disruption to tanker traffic through the Strait of Hormuz. That narrow waterway is one of the world’s most critical energy chokepoints, with about one-fifth of global oil and LNG supply flowing through it, so even the threat of disruption can move prices and sentiment. Oil price volatility will likely help set the tone for overall risk sentiment. Even though we’re at the tail end of earnings season, several influential companies including CrowdStrike, Target, Costco, and Broadcom are set to report, offering fresh insight into consumer demand and technology spending trends. We’ll also get an important update on the U.S. labor market with the February jobs report, which could influence expectations around growth and policy in the months ahead. In environments like this, when headlines can quickly move markets, keeping a steady perspective matters, and it’s a good reminder of why diversification is so important when navigating periods of heightened uncertainty. As always, the team at Valley National Financial Advisors is here to help you navigate these developments and answer any questions you may have.

Economic Numbers to Watch This Week

• S&P Final U.S. Manufacturing PMI for February 2026, prior 51.2
• ISM Manufacturing for February 2026, prior 52.6%
• ADP Employment for February 2026, prior 22,000
• S&P Final U.S. Services PMI for February 2026, prior 52.3
• ISM Services for February 2026, prior 53.8%
• Initial Jobless Claims for week ending February 28, 2026, prior 212,000
• U.S. Employment Report for February 2026, prior 130,000
• U.S. Unemployment Rate for February 2026, prior 4.4%