Business Lookahead: Gauging the war's impact

March 28, 2026 - 02:11

The first quarter of the year is concluding with financial markets firmly in the grip of geopolitical turmoil. The ongoing conflict in the Middle East has erased an estimated $7 trillion from global stock valuations since its onset. This shock has fundamentally altered the economic landscape, sending oil prices soaring by nearly 70% since January and forcing a dramatic reassessment of interest rate expectations.

Suddenly, the trajectory for borrowing costs is pointing upward rather than down, casting a shadow over energy-intensive sectors like artificial intelligence. Meanwhile, gold has tumbled 16% from its recent peaks, breaking a powerful rally. As the second quarter begins, the central question is whether markets will stabilize or succumb to further pressure.

All eyes will be on the U.S. jobs report for March, due Friday, for a critical read on the domestic economy's resilience. Analysts anticipate a modest payroll increase, a stark contrast to February's unexpected decline. The war's uncertainty is complicating the Federal Reserve's path, with Wall Street scaling back predictions for interest rate cuts as surging energy costs reignite inflation fears.

Internationally, South Korea's March trade data will serve as an early bellwether for global demand, given its export-driven economy and pivotal role in supplying vital DRAM chips for AI. In Europe, preliminary inflation figures for March are expected to show a sharp uptick, driven by higher energy prices, with money markets now anticipating a potential interest rate hike—a scenario deemed improbable just weeks ago. The coming days will be crucial in gauging the war's sustained economic impact.