The war against Iran continues... Fear grows... Oil rises 10% in two days... Canceled insurance for oil tankers... It could be worse... The Mag Seven's earnings are carrying the S&P 500... Yet their shares are not...
Let the consequences begin...
We saw Secretary of State Marco Rubio on Capitol Hill on television yesterday, talking to reporters between briefing members of Congress... And we perked up when someone asked him a question about rising oil prices after the U.S.'s full-throated attack on Iran...
"Obviously, markets are going to be reacting to news about what's happening," Rubio said.
He added that Treasury Secretary Scott Bessent and Energy Secretary Chris Wright would announce plans today "to try to mitigate against" higher energy prices as the Middle East war develops. "We anticipated this could be an issue," Rubio said.
We don't know how much of an "issue" the White House expected... or if the market's reaction so far matches that anticipation.
But we can tell you that oil prices are up another 4% or so in the past 24 hours and about 10% since just before the U.S. attacks against Iran began early Saturday morning.
A barrel of West Texas Intermediate ("WTI"), the U.S. benchmark, now trades around $74. And Brent crude, the international standard, is at $81.
Yesterday, we told you that $70 is a technical "resistance" level for WTI in a downward trend stretching back several years. We said that if prices rose past that level and stayed there, we'd be writing a different story to you and considering the effects of a bigger oil spike.
Well, a day later, here we are...
Fear kept growing today...
What the end of this war looks like isn't clear. Yesterday, we wrote about what the best-case scenario could be. Today, a reporter asked President Donald Trump in the Oval Office about his worst-case scenario. As CBS News reported today...
At first, the president didn't have an answer, saying "I don't know if there's a worst case."
"We have them very much militarily from the military standpoint," he said.
After a moment, the president said the worst-case scenario would be if someone just "as bad" as Iran's now-deceased leaders takes over in Iran.
"I guess the worst case would be we do this and then somebody takes over who's as bad as the previous person, right?" he said. "That could happen. We don't want that to happen. That would probably be the worst."
From afar, it's hard to deduce the mood on the ground in Iran. The country's Internet is still blacked out. And by Trump's own timeline, we're several weeks away, at best, from some semblance of a short-term resolution.
But it's easy to judge what's happening with Iran's neighbors. What remains of the Iranian military is launching attack drones at countries across the Middle East, hitting airports, luxury hotels, embassies, Amazon data centers, and homes in their cities. And these countries are lined up against the Iranian government.
In the meantime, the Strait of Hormuz – a chokepoint for about 30% of all seaborne-traded oil and 20% of global liquefied natural gas ("LNG") supply – remains effectively shut down.
It's a practical matter...
Major marine insurance companies are either terminating "war risk coverage" or are charging a heck of a lot more to shippers seeking that coverage to pass through the waterway. As the Insurance Business trade publication reported yesterday...
Major marine war risk providers, including Oslo-based Skuld and NorthStandard P&I, have already begun issuing formal 72-hour cancellation notices for coverage in the Middle East Gulf and the Gulf of Oman. These notices, effective March 5, essentially reset the terms of engagement for any vessel entering the region...
And...
Before the strikes, war risk premiums for the Persian Gulf hovered around 0.25% of a vessel's hull value. Market analysts now expect those rates to jump by 50% or more as markets reopen. For a $100 million Very Large Crude Carrier (VLCC), a single voyage's insurance cost could climb from $250,000 to nearly $400,000.
This is not without reason.
An Iranian military commander speaking on state media threatened to light ships on fire... And even if ships move unharmed, Qatar has shut down its LNG export facility, limiting energy supplies to Asia and Europe.
That's why Asian markets have been taking hard hits, like South Korea's index losing 10% today... and European natural gas futures have nearly doubled in the past few days. The European Stoxx 600 lost 3% today.
Supply disruptions, delays, and higher shipping costs pass through to suppliers and ultimately consumers.
In the meantime, the U.S. is the world's largest oil producer and leading LNG exporter. And this afternoon, Trump said he was ordering the U.S. government to provide "political risk insurance and guarantees" for all trade moving through the Persian Gulf.
"If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible," Trump wrote in a Truth Social post announcing the moves. That doesn't ease all concerns, but it is a start.
So it could be worse, especially for the U.S...
Overall, energy prices notably rose for a second straight day... And today looked a bit different from yesterday, as if the market was pricing in a "regime change" of its own – a return to the days of high(er) inflation and a stronger U.S. dollar.
Bond yields rose, gold and silver sold off, and for several hours, it was an (almost) "everything is down" day with more than 400 of the S&P 500 Index's stocks in the red. The Dow Jones Industrial Average was down by more than 2% this morning, and the small-cap Russell 2000 Index was off by more than 3%.
Yet we noted some early signs of fear abating even before Trump's announcement. The losses in stocks (and oil) eased throughout the day. The S&P 500 and Dow Jones Industrial Average finished less than 1% lower, and the Russell 2000 finished down 1.7%.
And if you're looking for some evidence that the bull market did not die today, you could find it.
Retailers Target (TGT) and Best Buy (BBY) were each up roughly 7% after earnings reports. And a number of software companies, including Intuit (INTU) and Adobe (ADBE), moved higher by more than 3%... continuing rallies after weeks of taking a beating amid the AI story.
Believe it or not, the world is still spinning...
Now that earnings season is over...
As of Friday, 96% of S&P 500 companies had reported their earnings for the fourth quarter. Their average earnings per share ("EPS") grew 14.2%, marking the fifth straight quarter of double-digit earnings growth.
Still, that growth was driven by strength in a few names. And like quarters past, the Magnificent Seven companies did much better than the "rest" of the market...
According to FactSet's weekly Earnings Insight report, the Mag Seven grew earnings by more than 27% in the fourth quarter. That was higher than the 18.4% earnings growth that the group reported for the third quarter.
And they accounted for three of the top five contributors – Nvidia (NVDA), Alphabet (GOOGL), and Microsoft (MSFT) – to overall S&P 500 earnings growth.
The "rest" of the market wasn't as good. From FactSet's report...
On the other hand, the blended earnings growth rate for the other 493 S&P 500 companies for Q4 is 9.8%, which is below the earnings growth rate of 12.2% for these 493 companies for the third quarter.
So the best of the best are still going strong.
And this trend is expected to continue through this year. FactSet estimates that the Mag Seven will grow their earnings per share by 23.5% in 2026. The other 493 companies in the S&P 500 are "only" expected to grow EPS by 11.8% this year.
But while the Mag Seven's businesses are thriving, their shares are not...
Take Nvidia as an example. As we wrote about last week, after the company beat Wall Street estimates for a 14th straight quarter, the stock fell by 5% the next day...
In the first two months of the year, this stock has been defined by two things... high expectations for AI companies and concerns about the consequences of AI's growth. The breakout of war isn't changing that.
As Ten Stock Trader editor Greg Diamond wrote in his Weekly Market Outlook yesterday, the stock market's "Generals" – the Mag Seven – haven't been leading as of late, and others have fallen in line. From Greg...
The "Generals" have been faltering, and the "troops" have been following them down.
The troops are companies like International Business Machines (IBM), Oracle (ORCL), and CrowdStrike (CRWD).
The Generals are the tech and semiconductor leaders we're analyzing this week... We'll examine the topping-out process in a number of those stocks.
Greg went on to outline recent price action in five of the Mag Seven, with Apple (AAPL), Alphabet, Microsoft, Amazon (AMZN), and Nvidia failing to make new highs recently.
Not only are these companies weighing down other tech companies like Greg highlighted, but they have been pulling down the whole market.
As DailyWealth Trader editor Chris Igou wrote in his "sector check-up" for subscribers...
It's not that a lot of stocks aren't going up... It's that the biggest stocks are struggling.
The five stocks Greg highlighted make up more than 27% of the S&P 500. So when these stocks turn lower, the overall index can stall out.
When the market is near all-time highs, it doesn't take much to spark a downturn. A developing war in the Middle East and disrupted global energy supplies are both reasons for investors to get nervous. That's what we saw today, but while volatility reigns right now, the market also didn't panic as much as it could have.
We'll keep watching what each new day brings and continue to keep you updated.
New 52-week highs (as of 3/2/26): Agnico Eagle Mines (AEM), Altius Minerals (ALS.TO), Antero Midstream (AM), Atmus Filtration Technologies (ATMU), BAE Systems (BAESY), BHP (BHP), Alpha Architect 1-3 Month Box Fund (BOXX), BP (BP), CF Industries (CF), Ciena (CIEN), CME Group (CME), Canadian National Railway (CNI), Coca-Cola Consolidated (COKE), Simplify Managed Futures Strategy Fund (CTA), Chevron (CVX), Duke Energy (DUK), Equinor (EQNR), EQT (EQT), FirstCash (FCFS), Federal Realty Investment Trust (FRT), Freehold Royalties (FRU.TO), GE Vernova (GEV), Honeywell International (HON), iShares U.S. Aerospace & Defense Fund (ITA), Kinder Morgan (KMI), Lamar Advertising (LAMR), Liberty Energy (LBRT), L3Harris Technologies (LHX), Linde (LIN), Lumentum (LITE), Lockheed Martin (LMT), Cheniere Energy (LNG), Magnolia Oil & Gas (MGY), Marathon Petroleum (MPC), Matador Resources (MTDR), New York Times (NYT), Realty Income (O), OR Royalties (OR), Plains All American Pipeline (PAA), Pembina Pipeline (PBA), Invesco Oil & Gas Services Fund (PXJ), Royal Gold (RGLD), Sprott (SII), Snap-on (SNA), TKO Group (TKO), Travelers (TRV), Tenaris (TS), Valero Energy (VLO), Viper Energy (VNOM), Wheaton Precious Metals (WPM), State Street Energy Select Sector SPDR Fund (XLE), and State Street Industrial Select Sector SPDR Fund (XLI).
In today's mailbag, feedback on yesterday's edition on the war against Iran and possible outcomes... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Color me skeptical [on the best-case scenario with the war in Iran]. [Trump] always promotes the best case from his standpoint. Sometimes it comes to pass, often not. I really hope it does in this case, as the alternative is total chaos in the Middle East, as evidenced by the Iranian drone attack on a Saudi oil field.
"For what it's worth, I believe Los Angeles, where I live, has the largest Iranian population in the US, and they have been demonstrating for months in support of the overthrow of the rule of the Ayatollahs, and they were out in force this weekend supporting the Trump war. I fear their hopes will be dashed, but I really, really hope I'm wrong." – Subscriber Sherwin R.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
March 3, 2026
