# March 4, 2026 — Market Report Date: 2026-03-04 Three forces collided today: the US-Iran war entered its fifth day with Iran claiming control of the Strait of Hormuz, Trump's tariffs on Canada and Mexico took effect at midnight, and ADP jobs data showed surprising resilience. Markets spent the day digesting all three. --- ## The War: Day 5 The US-Israeli campaign against Iran continued to intensify. Defense Secretary Hegseth said the US was "just getting started." Israel launched a broad wave of strikes targeting Iranian missile sites and air defense systems. The IRGC declared "complete control" of the Strait of Hormuz — through which 20 million barrels of oil pass daily (roughly 20% of global seaborne oil trade). Behind the scenes, Iranian intelligence sent word through a third country to the CIA that it could be prepared to open talks. CNN reported the messages were conveyed through an intermediary. However, Washington does not consider the overture serious, and Israeli officials — who want a weekslong campaign to inflict maximum damage — urged the US to ignore the approach. The diplomatic signal, thin as it was, mattered to markets. It was enough to prevent further escalation pricing and helped US equities stabilize. --- ## Tariffs: Canada and Mexico Kick In At 12:01 AM ET, 25% tariffs on Canadian and Mexican goods took effect after a 30-day suspension. Trump also increased China tariffs by another 10% as of today. Treasury Secretary Bessent signaled that the temporary global tariff rate would rise from 10% to 15% this week under Section 122 of the Trade Act of 1974. The tariff news was largely priced in. Markets had already sold off on the announcement, and the actual implementation produced no additional shock. Attention shifted to whether exemptions would follow — and they did: auto imports were exempted the next day, and USMCA-covered goods got a reprieve through April 2. --- ## Jobs: ADP Beats Expectations The ADP National Employment Report showed private payrolls increased by 63,000 in February, beating the 48,000 consensus estimate. Education/health services added 58,000 jobs and construction contributed 19,000. Annual pay growth for job-stayers held steady at 4.5%. The catch: January was revised down sharply from 22,000 to just 11,000 — the weakest since 2020. The labor market is sending mixed signals: February recovery looks decent, but January's collapse suggests underlying fragility. Markets chose to focus on the beat. --- ## US Markets US equities rallied, recovering much of Monday's war-driven selloff. | Index | Close | Change | |-------|-------|--------| | S&P 500 | ~5,890 | +1.0% | | Nasdaq Composite | — | +1.6% | | Dow Jones | +308 pts | +0.6% | Tech led the recovery. Micron and AMD each gained ~6%. Nvidia and Broadcom rose ~2%. Amazon added 2.8%. Moderna surged 11% on a settlement agreement, now up 95% for 2026. CoreWeave popped 8% on a deal with Perplexity. The dip-buy reflex held. For the second straight session, investors bought the geopolitical dip rather than panic-selling into it. This pattern has been remarkably persistent — most single-day geopolitical selloffs reverse within 48 hours, and this one followed the script. --- ## Oil Oil prices stabilized after the prior session's surge. | Benchmark | Price | Change | |-----------|-------|--------| | WTI Crude | $75.28 | +0.2% | | Brent Crude | $82.21 | ~flat | Brent is up ~13% since the conflict began on February 28. The Hormuz closure remains the key risk — if sustained, analysts project oil could reach $100-150/barrel. But Treasury Secretary Bessent signaled upcoming measures to ease fuel prices, which capped the upside for now. The market is pricing a short conflict. If that assumption breaks, oil reprices violently higher. --- ## Gold Gold surged to new highs on safe-haven demand. | Metric | Value | |--------|-------| | Spot Gold | $5,175/oz (+1.8%) | | April Futures | $5,178/oz | The conflict is the primary driver. Analysts note that if the military campaign extends, gold could stay above $5,000 and retest recent highs. The counterforce is a strong dollar and tempered rate-cut expectations. --- ## Treasuries The 10-year yield traded around 4.09-4.10%, relatively stable. Yields halted their recent surge as oil prices paused, easing inflation fears modestly. The bond market is caught between two forces: war-driven inflation risk (higher yields) and flight-to-safety flows (lower yields). For now, they're roughly canceling out. --- ## Asia: The Carnage Asian markets were devastated. South Korea suffered its worst single-day drop in history. | Index | Change | |-------|--------| | KOSPI (Korea) | -12.06% (worst ever, eclipsing 9/11) | | Nikkei 225 (Japan) | -4.15% | | Hang Seng (Hong Kong) | -2.28% | | CSI 300 (China) | -1.14% | | ASX 200 (Australia) | -1.94% | Korea was the epicenter. Trading was halted after the 8% circuit breaker triggered, but selling resumed when it lifted. Forced liquidation of leveraged positions amplified the crash. Major losses: Samsung -9.9%, SK Hynix -11.5%, Hyundai Motor -11.7%, Kia -11.3%. Korea's vulnerability: it imports virtually all its oil. A sustained Hormuz closure directly threatens Korean industry — higher input costs, higher inflation, weaker won. The market priced in a scenario where energy-dependent export economies bear the brunt of the conflict. --- ## The Narrative Today's market action told a story of divergence. The US, with its domestic energy production and reserve currency, shrugged off the war and bought the dip. Asia, particularly Korea, priced in worst-case energy disruption. Oil stabilized on thin diplomatic signals. Gold hit new highs. Tariffs arrived on schedule but were already in the price. The key tension: US markets are betting this ends quickly (diplomacy, limited escalation, Hormuz reopens). Asia is betting it doesn't. Someone is wrong. If Iran's back-channel overtures lead to real talks within weeks, the US market's optimism gets validated and Asia snaps back. If the conflict drags into April with Hormuz still closed, the US dip-buy trade breaks and oil reprices toward triple digits. For Palace Fund, the implications are: 1. **USD/KRW pressure continues.** Korea's market crash and energy dependence weaken the won. Capital flight accelerates. This matters for the parents' wire transfer timing. 2. **Pre-IPO AI shares are holding.** As noted in today's earlier report, mega-cap AI secondaries haven't moved much. The war isn't an AI-specific event. This remains a favorable buying environment if we can get capital deployed. 3. **Oil is the variable that matters most.** Everything else — equities, currencies, gold, bonds — is downstream of whether Hormuz stays closed. --- ## Sources - [CNBC — Dow jumps 300 points, S&P 500 turns positive](https://www.cnbc.com/2026/03/03/stock-market-today-live-updates.html) - [CNBC — Asia markets: KOSPI circuit breaker](https://www.cnbc.com/2026/03/04/asia-markets-hang-seng-index-kospi-nikkei-225.html) - [Al Jazeera — Korea stock market worst drop in history](https://www.aljazeera.com/economy/2026/3/4/south-koreas-stock-market-in-meltdown-amid-us-iran-war) - [CNN — Iran sends word to US on potential talks](https://edition.cnn.com/2026/03/04/politics/reachout-iran-us-potential-talks) - [ADP National Employment Report — February 2026](https://mediacenter.adp.com/2026-03-04-ADP-National-Employment-Report-Private-Sector-Employment-Increased-by-63,000-Jobs-in-February-Annual-Pay-was-Up-4-5) - [CNBC — Gold gains as Middle East conflict revives safe-haven bid](https://www.cnbc.com/2026/03/04/gold-gains-as-middle-east-conflict-revive-safe-haven-bid.html) - [Al Jazeera — IRGC says Iran in complete control of Strait of Hormuz](https://www.aljazeera.com/news/2026/3/4/irgc-says-iran-in-complete-control-of-strait-of-hormuz-amid-trump-threats) - [Euronews — Hormuz shutdown keeps oil prices on upward trajectory](https://www.euronews.com/business/2026/03/04/passage-denied-hormuz-shutdown-keeps-oil-prices-on-an-upward-trajectory) - [Tax Foundation — Tariff Tracker 2026](https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/) - [CNBC — Canada tariffs take effect](https://www.cnbc.com/2026/03/04/us-iran-war-live-updates.html)