Weekly Economic Update
Last Week and the Economy
- The U.S. and Israel conducted military action in Iran.
- Oil prices rose amid increasing geopolitical tensions.
- Consumer expectations for future economic conditions improved.
The major U.S. stock indices closed lower amid volatile trading last week. The Dow Jones Industrial Average posted the largest weekly loss at 1.31% and the Russell 2k Small Cap Index was not far behind with a loss of 1.18%. The Nasdaq Composite and S&P 500 fared slightly better, declining by 0.95% and 0.44%, respectively. On the other hand, international stocks – represented by the MSCI-EAFE Index – ended the week 1.22% higher.
U.S. and Israel Attacked Iran
On Saturday, the U.S. and Israel launched a series of attacks on Iran that reportedly killed Supreme Leader Ayatollah Ali Khamenei and other high-ranking officials. The Supreme Leader acts as the country’s military and spiritual leader, and his death leaves a significant gap in power.
Attacks continued throughout the weekend, and more than 2,000 targets were struck. Iran responded with strikes against Israeli and U.S. facilities in the Middle East that killed 3 U.S. servicemembers and injured 5 more.
Following the escalating tensions in the Middle East, gold prices rose by 2% to $5,383.49 per ounce. The precious metal is generally viewed as a safe haven asset that investors use to hedge against turmoil in other markets.
European stocks, which begin trading earlier than U.S. stocks due to time zone differences, fell early this morning – the first trading day since the conflict began. The pan-European Stoxx 600 dropped by 1.2%, with most major sectors declining except for gas and national defense.
Oil Prices Rose Amid Middle East Conflict
As tensions continued to escalate in the Middle East, oil prices rose sharply on Sunday. U.S. crude futures rose by about 11%, reaching a high of $75 per barrel before retreating. Brent futures, which track global prices, rose by about 8% to $79 per barrel.
War in Iran could have an impact on the Strait of Hormuz, a narrow strip of sea at the Southern border of Iran through which about 20% of all the world’s oil travels. This key pathway could become a potential bottleneck for the global oil trade if Iran chooses to block trade through it. Reports on Iran’s intentions to utilize this strategy are conflicting, and uncertainty surrounding the oil trade is mounting.
Consumer Expectations for Future Economic Conditions Improved
The Conference Board’s Consumer Confidence Index reading for February showed a slight improvement from January, rising by 2.2 points to 91.2, on a scale where 100 equals the 1985 base level. The index consists of two main parts – the Present Situation Index and the Expectations Index, results for which differed for the month.
Assessments of the present economic situation worsened by 1.8 points for the month to 120.0, but this figure remains well above the base level. The gap between those with pessimistic and optimistic views of the current situation widened on several key issues.
The share of consumers who said business conditions were “good” increased slightly from 19.6% to 19.7%, while the share of respondents who said business conditions were “bad” also increased from 17.3% to 19.0%. Similarly, the share of consumers who said jobs were “plentiful” rose from 25.8% to 28.0% while the share who said they were “hard to get” rose from 19.0% to 20.6%.
On the other hand, expectations for future conditions improved by 4.8 points to 72.0 but remained far below the level of 80 that typically signals a recession ahead. In addition, the gap between optimistic and pessimistic views on the future narrowed.
The share of consumers who expect business conditions to improve rose from 16.5% to 17.6%, while the share who expect conditions to worsen declined from 23.7% to 21.0%. Further, the share of consumers who expect more jobs to be available in the future rose from 16.5% to 17.6% while the share who expect fewer future jobs fell from 28.7% to 26.1%.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Key Economic Data Points
| Data Point | Date | Current | Change from Prior Period | Next Report |
| Unemployment Rate | 01-2026 | 4.3% | -0.1 | March 6th |
| FOMC Target Rate | 1-2026 | 3.50% – 3.75% | 0 | March 18th |
| GDP | Q4 2025 | 1.4% | -3.0 | March 13th |
| PCE Inflation | 12-2025 | 2.9% | 0.1 | March 13th |
Data Sources: U.S. Bureau of Labor Statistics, FRED – St. Louis Fed, U.S. Bureau of Economic Analysis
Weekly Quote:
The best investment on Earth is earth.
-Louis Glickman, Real Estate Investor.
The Week Ahead – Economic Data & Events
Monday: Construction, ISM Manufacturing, R-Star (HLW Estimates)
Wednesday: ADP National Employment Report, ISM Non-Manufacturing
Thursday: Advance International Trade in Goods, Productivity & Costs (Revised), Trade Balance, Global Supply Chain Pressure Index (GSCPI), Manufacturing, Shipments, and Orders
Friday: Employment Situation, Wholesale Trade
Weekly Reports: Mortgage Applications (Wednesday), EIA Petroleum Status Report (Wednesday), Jobless Claims (Thursday), EIA Natural Gas (Thursday), Fed Balance Sheet (Thursday), Baker Hughes Rig Count (Friday)
Source: New York Fed
The Week Ahead – S&P 500 Companies Reporting Earnings
Monday: Norwegian Cruise Line (NCLH), Sealed Air (SEE)
Tuesday: AutoZone (AZO), Target (TGT), Ross Stores (ROST), Best Buy (BBY)
Wednesday: Broadcom (AVGO), Bath & Body Works (BBWI), Brown-Forman (BF.B)
Thursday: Costco (COST), Kroger (KR), Marvell Technology (MRVL), CooperCompanies (COO)
Source: Select Sector SPDRs Earnings Calendar
Weekly Tip:
Don’t forget inflation. A $1m portfolio today won’t have the same buying power in 20 years, so account for rising costs in your financial plan.
Data Sources for stock and index quotes: Yahoo Finance, WSJ
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Last Week's Riddle and Answer
Last Week's Riddle:
I am good at concealing what's real and hiding what's true. Sometimes, I bring out the courage in you! What am I?
Last Week's Answer:
Makeup. It excels at concealing and it sometimes brings out courage in people who enjoy wearing it.
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