Markets ended lower after a choppy, headline filled week. Surging energy prices and inflation concerns weighed on investor’s minds as markets slowly came to terms with the reality that the war in Iran may last longer than initially expected.
US equities were volatile, with the S&P 500 slipping 1.6% over the week1. Investors largely looked past the February inflation print, which came in as expected at 2.4% YoY, and instead focused on Brent crude futures closing above US$100 per barrel for the first time since 2022 and a downward revision to Q4 2025 GDP, from 1.4% to 0.7%2. With growth slowing while inflation expectations rise, markets are increasingly grappling with the risk of stagflation.
Australian equities also fell for the week with the ASX 200 dropping 2.6%. Investors had very few places to hide with energy being the only sector to end the week positive. As energy prices continue to rise due to the war in Iran, the RBA is now expected to hike rates by two further times in 2026 in order to keep inflation in check. The higher-for-longer rate outlook has weighed on all equities, with rate sensitive sectors like real estate and info tech falling the most.
Crude oil (OOO) continued to be the top performing asset for the week as the war continues to constrict global supply. Cryptocurrencies (BTXX, CRYP, EBTC, EETH, IBIT, QBTC, QETH, VBTC) were surprising outperformers, with Bitcoin in particular surging to a six-week high as ETF investors stepped in to buy the dip3.
In the world of commodities:
- Gold (GOLD) was lower as its traditionally inverse relationship with US bond yields and the US dollar kicked in. Precious metals tend to underperform in high interest rate environments due to being non-yielding assets.
- Copper (WIRE) prices continued to grind lower as the odds of a near-term resolution to the Iran war fell.4 With higher energy prices historically weighing on global growth, investors grow increasingly concerned around the demand for industrial metals.
- Battery technology and lithium names (ACDC) rose over the week, as markets began pricing in potentially stronger EV demand following the petrol price shock triggered by the conflict in the Middle East.5
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