Iran Conflict Impacting Major Markets
Middle East conflict jolts global shipping and energy logistics | EPA RFS Set 2 review moves into high gear at OMB
| LINKS |
Link: The Week Ahead: Oil Price Jumps on Iran Strikes
Link: Weekend Updates: GOP Lawmakers Rally Behind Trump
After Iran Strikes
Link: Special Report: U.S. and Israel Strike Iran: Markets Brace
for Energy Shock
Link: Video: Wiesemeyer’s Perspectives, Feb. 27
Link: Audio: Wiesemeyer’s Perspectives, Feb. 27
| Updates: Policy/News/Markets, March 2 , 2026 |
| UP FRONT |
TOP STORIES
— Iran conflict and markets — Sevens Report analysis
Markets are treating the Iran conflict as a short-term volatility shock rather than a structural bearish turning point. The Sevens Report says equities typically suffer only when geopolitical events create a sustained energy supply crisis — which, for now, has not occurred. Key risks remain escalation, prolonged conflict, or ground involvement; otherwise, macro factors like growth, AI sentiment, and Fed policy stay dominant.
— Middle East conflict jolts global shipping and energy logistics
Airstrikes and retaliation rapidly disrupted tanker routes, container shipping and air cargo across the region. Risk levels for commercial shipping were raised to “Critical,” carriers suspended Red Sea and Hormuz routes, and freight surcharges surged — turning the conflict into a direct logistics and energy-market shock with upward pressure on global shipping costs and oil prices.
— EPA RFS Set 2 review moves into high gear at OMB
The Renewable Fuel Standard Set 2 rule entered formal White House review, with biofuels and oilseed stakeholders meeting at OMB ahead of EPA’s end-of-month target. Outcomes could materially affect soybean oil demand, RIN credits, blending obligations, and renewable diesel economics — making this a key near-term policy watch for ag and energy markets.
— RFK Jr. signals unease with Trump’s glyphosate order
HHS Secretary Robert F. Kennedy Jr. said he was not fully supportive of President Trump’s glyphosate order but acknowledged the administration’s rationale and emphasized a gradual transition away from the pesticide. Comments highlight a balancing act between current agricultural realities and longer-term food and health policy changes, including planned ultra-processed food definitions and labeling initiatives.
— After Iran: China’s difficult calculus on Trump, oil and Taiwan
The Iran conflict complicates Beijing’s diplomatic and energy strategy ahead of a possible Trump/Xi summit. Analysts note China faces higher oil-price exposure, uncertainty around Taiwan policy leverage, and reduced room to maneuver diplomatically as instability raises risks across trade and geopolitical relationships.
FINANCIAL MARKETS
— Equities and markets today
U.S. equity futures are modestly lower as oil and gold rise sharply on geopolitical risk. European natural gas prices jumped amid disrupted shipping near Hormuz, while investors reassessed Fed rate-cut expectations. Markets remain focused on whether the conflict broadens — the primary trigger that could deepen risk-off flows.
AG MARKETS
— Farm machinery market faces prolonged downturn
A farmdoc daily analysis by Gerald Mashange finds continued contraction in farm equipment demand driven by weaker farm income, high borrowing costs, softer commodity prices, and tariff uncertainty. Sales and inventories continue adjusting downward, suggesting a slow recovery path unless farm economics and trade clarity improve.
FARM POLICY
— Farm Bill 2.0 frustration intensifies
Criticism is mounting as House lawmakers pursue a budget-neutral farm bill that some argue fails to modernize the safety net or adjust CCC borrowing authority. The debate highlights tension between fiscal restraint and calls for stronger, more automatic support mechanisms as trade and market volatility rise.
ENERGY & OTHER MARKETS REACT TO IRAN CONFLICT
— Global markets rattle as Iran conflict widens
Oil jumped, equities fell, and safe-haven flows strengthened as investors priced in risks of prolonged energy disruption. Infrastructure shutdowns and tanker hesitancy around Hormuz raised inflation and growth concerns, reinforcing risk-off positioning while markets monitor whether the conflict expands further.
CHINA
— USITC opens new China trade investigations
Two congressionally directed USITC investigations will examine potential revocation of China’s PNTR status and the impact of Chinese biotech subsidies. The probes could influence future trade policy, tariff debates, and U.S. supply-chain strategy.
FOOD POLICY & FOOD INDUSTRY
— Target to remove artificial dyes from cereal aisle
Target plans to eliminate cereals containing certified synthetic colors by the end of May, accelerating clean-label trends and pushing manufacturers to reformulate products amid rising consumer demand for fewer artificial additives.
WEATHER
— NWS outlook
A lifting frontal boundary will bring mixed precipitation and localized severe weather risks across parts of the U.S., while broader warmth expands nationwide — delivering more spring-like conditions this week.
| TOP STORIES — Iran conflict and markets — Sevens Report analysisLimited geopolitical shock for equities — unless escalation expands beyond air strikes The Sevens Report’s assessment of the Iran conflict argues that while the headlines are dramatic, the baseline market view remains relatively contained — unless the conflict widens or becomes prolonged. The report frames the situation as a near-term volatility event rather than a structural bearish turning point for global equities. Key market takeaways. According to the Sevens Report:• The U.S. and Israel launched a broad air campaign against Iran, prompting immediate retaliation across the region.• Markets are expected to respond first through higher oil prices and stronger safe-haven flows (gold) alongside weaker equities.• However, the report stresses that current expectations assume a short, air-focused operation without large ground deployments, limiting long-term market damage. The core thesis is straightforward: geopolitical shocks hurt markets mainly when they create a persistent energy supply problem. At this stage, the report argues that condition has not yet been met. Why Sevens Report says markets may stay resilient. The Sevens analysis points to several stabilizing factors:• Iran remains a marginal global oil producer, and OPEC production increases may offset supply risks.• Even with temporary disruption around the Strait of Hormuz, global supply is described as relatively well stocked.• Without sustained oil inflation, knock-on impacts to corporate margins and inflation expectations may stay limited. In short: higher energy prices may be sharp but not necessarily durable — reducing the likelihood of a deeper equity correction. What could turn this into a true bearish catalyst. The report identifies two clear escalation risks:• Boots-on-the-ground invasion by the U.S. or Israel• Regional expansion pulling additional countries directly into the conflict Either scenario would likely trigger sustained oil price gains and elevate inflation fears — the combination that historically pressures equities and risk assets most severely. What could calm markets. The Sevens Report says markets would likely stabilize quickly if:• The operation ends within days rather than weeks.• Iranian military capability is significantly reduced.• Regime change or a de-escalation opens the possibility of Iran eventually returning more oil to global markets. That outcome would actually increase global supply over time — a net positive for risk assets. Bottom Line: what investors should watch. The report’s conclusion is that AI sentiment, economic growth and Fed rate-cut expectations remain the dominant market drivers — not Iran — unless escalation materially intensifies. Near-term implications include:• Elevated volatility• Higher oil and gold prices• Risk-off trading flows But for now, Sevens Report stops short of calling the conflict a market “gamechanger,” emphasizing that the medium-term outlook still hinges primarily on macroeconomic data and monetary policy rather than geopolitics alone. — Middle East conflict jolts global shipping and energy logisticsAirstrikes and retaliation disrupt ocean routes, air cargo and oil flows — forcing carriers to reroute and raising freight and energy costs U.S. and Israeli airstrikes on Iran — and subsequent Iranian retaliation — triggered a sharp escalation in transportation and energy-market risk, severely disrupting shipping, tanker traffic and air-cargo operations across the Middle East. Regional maritime risk rose dramatically after the Joint Maritime Information Center — which advises commercial shipping on behalf of U.S. and UK naval forces — upgraded its threat assessment to “Critical” following missile and drone attacks that reportedly struck three tankers. Shipping officials also warned of heavy satellite-navigation interference and growing secondary hazards as vessels cluster outside danger zones. Key logistics infrastructure felt immediate pressure. Dubai’s Jebel Ali Port suffered a fire after debris from aerial defenses fell into the facility, while several regional container ports temporarily halted operations. Most tankers also stopped crossing the Strait of Hormuz, a strategic chokepoint that typically carries roughly one-fifth of global oil supplies, intensifying concerns about supply disruption and supporting higher oil prices. Global ocean carriers rapidly pulled back from regional routes:• A.P. Moller-Maersk halted transits through the Strait of Hormuz and rerouted vessels around the Cape of Good Hope rather than using the Suez Canal.• Haag-Lloyd paused Hormuz and Suez crossings and added a $1,500 per 20-foot container surcharge on Gulf cargo.• CMA CGM suspended Suez Canal transits, ordered ships to seek safe harbor and introduced emergency fees starting around $2,000 per container.• Mediterranean Shipping Co. suspended cargo bookings to the Middle East altogether. The escalation also revived fears of renewed attacks in the Red Sea after Yemen’s Houthi movement warned it could restart missile and drone strikes targeting vessels tied to the U.S. or Israel. Shipping groups cautioned that even neutral vessels face higher risk amid regional conflict. Industry analysts said the renewed instability has effectively derailed expectations that container traffic would return at scale to the Red Sea in 2026 — a shift that had been expected to ease global shipping overcapacity and pressure freight rates lower. Instead, markets quickly priced in tighter capacity and rising costs, pushing shares of major shipping companies higher and fueling expectations that higher Gulf rates could ripple across global routes. Air transportation was also hit hard. Widespread airspace closures led to thousands of flight cancellations, including cargo operations. Airports in Dubai, Abu Dhabi, Kuwait and Bahrain were reportedly struck or affected, disrupting major hubs for global passenger and freight networks. Air-freight operators, including FedEx, suspended flights across parts of the region. Bottom Line: The conflict has rapidly transformed from a geopolitical event into a full-scale logistics shock — squeezing maritime capacity, disrupting cargo flows and reinforcing upward pressure on both shipping rates and oil prices at a time when global supply chains were only beginning to normalize. — EPA RFS Set 2 review moves into high gear at OMBInteragency meetings begin as biofuels and oilseed groups weigh in ahead of EPA’s end-of-month deadline The interagency review process for the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS) Set 2 final rule has formally moved into the Office of Management and Budget (OMB), marking a key procedural step before the rule is finalized. OMB meetings — a normal part of high-profile rulemakings — begin this week and are expected to intensify quickly. Two sessions are already scheduled, including a Friday meeting with the Clean Fuels Alliance America and another on March 10 with the National Oilseed Processors Association (NOPA). These stakeholder discussions give industry groups an opportunity to make final arguments on blending levels, compliance obligations, and market impacts before the rule clears the White House review process. The review follows an extensive earlier engagement period. A total of 18 sessions were previously scheduled and held on the combination of:• The proposed RFS volume obligations for the next compliance years• A supplemental proposal addressing how obligations are reallocated when small refinery exemptions (SREs) are granted That supplemental proposal remains one of the most closely watched elements of the rule, particularly for biodiesel and renewable diesel producers, who argue that reallocation decisions affect demand certainty, Renewable Identification Number (RIN) values, and long-term investment planning. EPA has pledged to finalize the RFS Set 2 rule by the end of this month, meaning the pace of OMB meetings is expected to accelerate in the coming days as additional stakeholders seek last-minute access to the review process. Why it matters for markets and agriculture. The Set 2 rule is especially important for soybean oil demand and crush margins — a key watchpoint for both farm groups and processors — because biofuel blending mandates directly influence renewable diesel production economics. Any shift in volume levels or the treatment of SREs could ripple through:• Soybean oil prices and processing margins• Biodiesel and renewable diesel capacity utilization• Corn-ethanol demand expectations• RIN credit values and compliance costs for refiners Given EPA’s compressed timeline, the OMB phase will likely be the last major battleground before the final rule is released, making the meetings an early signal of where negotiations and pressure points are headed. — RFK Jr. signals unease with Trump’s glyphosate orderHHS secretary says he understands the president’s rationale but emphasizes long-term transition away from the pesticide Health and Human Services Secretary Robert F. Kennedy Jr. said he was not pleased with President Donald Trump’s executive order aimed at protecting and expanding glyphosate manufacturing, even as he acknowledged why the administration pursued the policy. Speaking during a podcast interview with Joe Rogan, Kennedy said the move was “not something that I was particularly happy with,” signaling some internal tension between health-focused priorities and agricultural or economic considerations. He added that he understood the president’s perspective, noting that the current regulatory and farming system predates the administration and that transitioning away from glyphosate will take time. Kennedy’s remarks come after criticism from parts of the Make America Healthy Again movement, some of whom had expected a tougher stance on chemical pesticides. While he previously expressed support for increased glyphosate production, the latest comments suggest a more cautious posture — acknowledging both political realities and the long-term goal of reducing reliance on the herbicide. Food policy goals move forward. Beyond pesticides, Kennedy highlighted several upcoming food-policy initiatives. He said the administration plans to finalize a federal definition for ultra-processed foods by April — a step he framed as foundational for broader nutrition reforms. Once that definition is completed, Kennedy said the administration intends to advance front-of-package labeling, potentially using a simple color system (green, yellow, red) designed to help consumers quickly assess whether foods are healthy choices. Why it matters. The comments underscore a balancing act inside the administration: supporting current agricultural practices while signaling eventual changes in food and health policy. For producers and agribusiness stakeholders, the message suggests no immediate reversal of glyphosate policy — but growing discussion within the administration about a longer-term shift in chemical use and food labeling standards. — After Iran: China’s difficult calculus on Trump, oil and TaiwanU.S./Israeli strikes reshape Beijing’s diplomatic, energy and strategic trade-offs ahead of a possible Trump/Xi summit The U.S. and Israeli military strikes on Iran — including the killing of Supreme Leader Ayatollah Ali Khamenei — have abruptly reshaped the geopolitical environment just weeks before a planned summit between President Donald Trump and Chinese President Xi Jinping in Beijing, forcing China to reassess its diplomatic, energy and security calculations. According to Nikkei Asia, analysts are now debating whether the summit will proceed as scheduled or be delayed amid escalating tensions and growing mistrust between Washington and Beijing. Summit uncertainty as trust erodes. China’s official response to the Iran strikes has been notably restrained. Beijing described the killing of Khamenei as a violation of Iran’s sovereignty but stopped short of strong condemnation — a contrast to past responses to U.S. military action. Analysts cited by Nikkei Asia suggest that commentary from Chinese state media reflects a wider sentiment among China’s elites that Washington cannot be relied upon as a diplomatic partner. While most observers believe a Trump/Xi meeting is still likely, postponement is seen as a real possibility if the conflict widens. The summit is viewed by Beijing as a mechanism for “Trump management,” preserving the temporary easing of tensions reached in prior negotiations. But escalating military action in the Middle East threatens to overshadow diplomatic efforts and could alter the tone — or timing — of any high-level talks. Strategic signals and the Taiwan equation. Some analysts argue the strikes have unexpectedly strengthened Trump’s bargaining position. Before the operation, there were perceptions that the U.S. entered negotiations weakened by legal and trade setbacks, including court rulings affecting tariffs and speculation around delayed Taiwan arms sales. The Iran operation, however, has reframed that narrative. Analysts quoted by Nikkei Asia contend that U.S. military assertiveness may allow Washington to approach Beijing from a position of leverage — potentially linking restraint on Taiwan arms deliveries to broader strategic negotiations. Others caution that escalation could have the opposite effect, pushing China closer to Russia and encouraging Beijing to harden its resistance to U.S. pressure. If China were to cancel or postpone the summit, observers suggest Washington could feel less incentive to continue delaying sensitive Taiwan-related decisions. Oil and economic pressures on China. Energy markets represent one of Beijing’s most immediate concerns. China remains the largest importer of Iranian oil, absorbing most of Tehran’s seaborne exports at discounted prices under a long-term economic partnership. While analysts say replacement barrels are available elsewhere, the real risk is price inflation rather than supply loss. Oil prices surged following the strikes, intensifying concerns that higher energy costs could weigh on China’s already fragile domestic economy — just as leaders gather to set economic priorities for the year. Nikkei Asia reports that Iranian oil accounts for an estimated 14% of China’s seaborne imports, meaning prolonged conflict or disruption to the Strait of Hormuz could increase inflationary pressure and stress export competitiveness. Beijing’s ‘long game’ and limited maneuvering. Observers note that China’s cautious reaction reflects its limited room for maneuver. Despite close ties with Iran, Beijing has offered mainly rhetorical support, highlighting the reality that China is not positioned — or willing — to counter U.S. military action directly. Some analysts argue this restraint may temporarily damage China’s image among Global South partners, though expectations for Beijing to intervene militarily are generally low. Others suggest that prolonged instability could ultimately increase Iran’s dependence on China — providing opportunities for economic influence once the conflict stabilizes. Still, uncertainty remains high. If Western-backed reconstruction or political change reshapes Iran’s future orientation, China could lose strategic access it spent years cultivating. Bottom Line: The Iran conflict has placed China in a difficult balancing act — managing energy exposure, preserving diplomatic options with Washington, and reassessing risks around Taiwan and regional alliances. As Nikkei Asia highlights, Beijing’s leadership now faces a complex strategic test: maintain stability with the U.S. while adapting to a rapidly shifting global power landscape that could redefine superpower relations heading into the planned Trump/Xi meeting. |
| FINANCIAL MARKETS |
— Equities and markets today: U.S. equity futures are modestly lower as geopolitical concerns rise following the weekend’s U.S./Israeli strikes on Iran. Oil (up roughly 7%) and gold (up about 3%) are sharply higher, while global equities are weaker as markets price in higher geopolitical risk.
Energy prices have surged, with Brent crude, the global benchmark, trading above $78 a barrel. European natural gas prices climbed roughly 28% as ship traffic, including vessels carrying crude and liquefied natural gas, was effectively halted around the Strait of Hormuz, the vital trade route bordering Iran. For every $10 a barrel increase in the cost of oil, the price at the pump could rise by up to 30 cents a gallon, Amy Myers Jaffe, director of the Energy, Climate Justice and Sustainability Lab at New York University, told the New York Times.
Fed impact: The current situation could tie the Fed’s hand. Several central bank officials have already warned that inflation remains uncomfortably high. Investors now predict that the Fed will next cut interest rate cuts in July, not June.
Stocks across Asia and Europe sank this morning, and S&P 500 futures are under pressure. The sell-off hit the tech, banking and travel sectors, while Persian Gulf airport closures snarled traffic in the region and beyond. Defense and energy stocks are up, alongside safe-haven assets like 10-year Treasury notes and the U.S. dollar. Still, the moves remain largely in line with expectations — suggesting conditions are not materially worse than investors had feared.
In Asia, Japan -1.4%. Hong Kong -2.1%. China +0.5%. India -1.3%.
In Europe, at midday, London -0.9%. Paris -1.6%. Frankfurt -2%.
On the economic front, UK Manufacturing PMI came in slightly below expectations at 51.7 versus 52.0, while the EU reading met forecasts at 52.0. Neither report is materially influencing market direction.
Today’s focus will remain squarely on geopolitics, particularly whether the U.S./Iran conflict broadens. Any signs of escalation — such as additional countries becoming involved or a wider expansion of hostilities — would likely represent an incremental negative for markets.
| AG MARKETS |
— Farm machinery market faces prolonged downturn as tariffs and weak farm economics weigh on equipment demand
farmdoc daily analysis by Gerald Mashange shows falling sales, shrinking inventories and rising trade-policy risks for U.S. machinery manufacturers
A new farmdoc daily report (link) by Gerald Mashange of the University of Illinois concludes that the U.S. farm machinery and equipment sector remains under heavy pressure, as declining farm income, higher borrowing costs, weaker commodity prices and tariff-related margin pressures combine to suppress equipment demand and complicate the outlook for manufacturers.
The article provides a broad update on sales trends, manufacturer inventories, pricing behavior and the impact of recent trade policy shifts on companies such as Deere, CNH Industrial and AGCO.
Sales continue to contract across the sector. Mashange notes that the market has moved sharply away from the post-pandemic equipment boom. The Creighton University Farm Equipment Sales Index — shown in Figure 1 of the report — has remained below the growth-neutral 50 mark for roughly 30 consecutive months, signaling sustained contraction in sales activity.
The report highlights several key trends:
• Farm tractor sales surged during 2020–2021 but began falling in 2022 and have continued to decline.
• By 2025, preliminary data showed tractor sales down nearly 10% year-over-year.
• Combine sales experienced an even sharper deterioration, plunging more than 35% in 2025.
Dealer sentiment mirrors these numbers. According to industry survey data cited in the article, a majority of dealers reported declines in new equipment sales during 2025, and a significant share expects further weakening in 2026.
Inventories adjusting — but prices remain elevated. The report explains that manufacturers have scaled back production as demand softened. Census data referenced by farmdoc daily shows total farm machinery inventories falling from a peak of roughly $7.23 billion in late 2022 to about $5.72 billion by December 2025 — a decline of about 21%.
The used-equipment market is also showing strain:
• Used tractor inventories declined for eight straight months.
• Asking prices have moved lower, reflecting softer demand.
• Auction values remain volatile but generally weaker on a year-over-year basis.
Despite slower sales, Mashange emphasizes that machinery prices remain high compared to pre-pandemic levels. Prices surged during Covid-era supply chain disruptions and have only recently leveled off rather than falling materially.
Tariffs add significant financial pressure. A central theme of the farmdoc daily article is the role of trade policy. The report details how 2025 tariffs significantly increased costs for manufacturers:
• Deere reportedly absorbed roughly $600 million in tariff-related costs in fiscal 2025 and projected higher burdens in 2026.
• CNH Industrial and AGCO similarly reported tariff-driven earnings pressure.
Mashange also discusses the potential implications of the U.S. Supreme Court ruling in Learning Resources v. Trump, which struck down tariffs imposed under IEEPA authority. While that ruling briefly offered relief, renewed tariff proposals under Section 122 have revived uncertainty for equipment makers and farmers alike.
Outlook: Recovery depends on farm economics and policy clarity. The author concludes that the farm machinery sector is likely to remain under pressure until several core conditions improve:
• Grain prices and farm incomes rebound
• Borrowing costs decline
• Equipment demand stabilizes
• Trade-policy uncertainty is reduced
In short, Mashange’s farmdoc daily assessment suggests the industry is still navigating a cyclical correction made more difficult by policy and macroeconomic headwinds. While inventories have begun to adjust, the combination of tight farm margins and tariff risk points to a slower recovery trajectory for equipment manufacturers and dealers.
| FARM POLICY |
— Farm Bill 2.0 frustration boils over as safety net debate intensifies
Budget-neutral approach and outdated CCC authority fuel criticism that U.S. farm policy is failing to keep pace with market and trade realities
Frustration is mounting on Capitol Hill as House Ag panel lawmakers move forward with a budget-neutral farm bill markup that critics argue does little to strengthen the agricultural safety net at a time of mounting trade and market volatility. The central complaint from many producers and policy observers is simple: agriculture is being asked to absorb increasing risk while Congress avoids structural fixes.
At the center of the debate is the Commodity Credit Corporation (CCC) — USDA’s primary financial backstop for farm programs and emergency assistance. Critics note that the CCC’s borrowing authority has not been meaningfully adjusted in nearly four decades, despite dramatic growth in farm operating costs, export exposure, and global market volatility. As a result, USDA has increasingly relied on ad-hoc or “out-of-cycle” replenishments from congressional appropriators to fund emergency payments and trade-related assistance.
Pressure on the farm safety net. Supporters of stronger reform argue that the current framework forces USDA into a reactive role — repeatedly stepping in with temporary aid programs rather than operating through a predictable, rule-based safety net. That approach, they say, creates uncertainty for producers and fuels political conflict whenever new assistance is needed.
The frustration is amplified by a broader policy disconnect:
• Trade policy volatility has contributed to uncertain export demand and price swings, increasing pressure on farm support mechanisms.
• Congressional constraints limit lawmakers’ direct role in negotiating trade agreements, leaving agriculture exposed to executive-branch trade strategies.
• Some critics argue that previous administrations failed to modernize farm policy or trade frameworks, contributing to today’s structural gaps.
The result, according to many in the farm sector, is a system that increasingly relies on emergency measures rather than long-term planning — a cycle viewed as inefficient for both farmers and taxpayers.
The core policy tension. The debate reflects a deeper philosophical divide on agricultural policy:
• One side favors maintaining strict budget neutrality and limiting permanent spending increases.
• The other argues that failing to update baseline tools — including CCC authority and farm program references — only guarantees more expensive emergency aid later.
For producers, the concern is less about partisan positioning and more about predictability. Farmers facing high input costs, trade disruptions, and volatile commodity prices want a safety net that functions automatically rather than depending on periodic political negotiations.
Why this matters now. The current markup comes amid broader uncertainty — including geopolitical risk, trade tensions, and shifting global demand — all factors that raise the likelihood USDA will again be asked to support farm incomes outside normal program structures.
In short, the criticism reflects a growing sentiment in agriculture policy circles: the system increasingly expects USDA to stabilize the farm economy without providing the modern financial tools to do so. Whether lawmakers adjust CCC borrowing authority or strengthen core farm programs during this cycle remains one of the key questions hanging over the farm bill debate.
| ENERGY & OTHER MARKETS REACT TO IRAN CONFLICT |
— Global markets rattle as Iran conflict widens
Oil surges, stocks fall and the dollar strengthens as investors brace for prolonged energy disruption and renewed inflation risks
Oil, currency and equity markets moved sharply Monday as the widening Iran conflict raised fears of prolonged instability in the Middle East — a scenario investors worry could derail the global recovery and re-ignite inflation pressures.
Energy prices spike on supply fears. Crude markets led the reaction. Brent crude jumped more than 8% to roughly $78.50 a barrel after briefly topping $82, while U.S. crude climbed about 7.5%. The move reflected escalating geopolitical risk after new Israeli strikes on Iran and regional retaliation, including missile and drone attacks across multiple countries.
Energy infrastructure has already been hit. Oil and gas facilities across the region were forced to shut down, and Saudi Arabia reportedly closed its largest domestic refinery following a drone strike. Traders are now closely watching the Strait of Hormuz, the crucial shipping chokepoint that handles roughly one-fifth of global seaborne oil and a significant share of LNG flows. Tankers have reportedly begun piling up near the passage as insurers reassess risk and shipping companies hesitate to transit.
The key market question is duration. Historically, markets absorb isolated Middle East conflicts, but broader regional escalation — and especially sustained energy disruption — tends to trigger sharper financial responses.
Of note: President Trump told the New York Times that the military campaign could last up to five weeks.
Defense Secretary Pete Hegseth said there were no U.S. forces on the ground in Iran but didn’t rule out the possibility there could be in the future, saying he wouldn’t divulge what the U.S. may or may not do. “President Trump ensures that our enemies understand we’ll go as far as we need to go to advance American interests,” Hegseth told reporters during a news conference.
Inflation and growth concerns return. A sustained rise in oil prices threatens to revive global inflation at a time when central banks were beginning to contemplate easing policy. Higher energy costs act as an immediate tax on consumers and businesses, potentially slowing demand and complicating monetary decisions.
Even though OPEC+ approved a modest output increase for April, markets remain skeptical that additional supply will ease pressure if shipments cannot safely move through regional waterways.
Stocks slide as investors cut risk. Equity markets turned lower worldwide:
• European stocks fell sharply, led by banks and travel names amid growth worries.
• Technology shares weakened as investors rotated out of riskier assets.
• Energy and defense companies outperformed, benefitting from higher oil prices and rising geopolitical risk.
• Middle East exchanges in the UAE and Kuwait temporarily halted trading under “exceptional circumstances.”
The shift reflects a classic risk-off environment — investors moving away from growth-sensitive sectors while favoring assets tied to energy and security.
Safe-haven flows lift dollar and gold. The U.S. dollar staged a strong rebound as investors sought safety, gaining against major currencies including the yen and Swiss franc. Analysts noted that traditional risk correlations — shaken in recent months — appear to have returned amid the crisis.
Gold also rallied sharply, rising more than 2% as another haven trade. Currency markets were additionally influenced by energy exposure: the U.S. benefits as a net energy exporter, while Europe and Japan face higher import costs, putting further pressure on the euro and yen.
Bond markets send mixed signals. U.S. Treasury markets reflected competing forces:
• Safe-haven demand pushed benchmark 10-year yields toward recent lows.
• Shorter-term yields rose as traders priced in inflation risk from higher oil prices.
Markets still expect Federal Reserve rate cuts later this year, but persistent energy-driven inflation could force policymakers to stay more cautious.
What markets are watching next. Investors now face two major variables:
• Geopolitical escalation — whether the conflict broadens and disrupts regional oil flows more severely.
• U.S. economic data this week — including manufacturing figures, retail sales, and the closely watched payrolls report, which could reshape interest-rate expectations.
For now, the market tone suggests caution: higher energy prices, stronger demand for safe havens, and growing concern that a longer conflict could push inflation back to the forefront just as economies were beginning to stabilize.
| CHINA |
— USITC opens new China trade investigations under FY 2026 spending directives
Congress-ordered probes will examine revoking China’s trade status and the impact of biotech subsidies on U.S. competitiveness
The U.S. International Trade Commission (USITC) has launched two major self-initiated investigations focused on China, following directives included in Fiscal Year 2026 appropriations legislation.
The first investigation — “Effects on the U.S. Economy of Revoking China’s Permanent Normal Trade Relations (PNTR) Status” — was ordered by the House Appropriations Committee. The study will analyze how ending PNTR treatment for Chinese imports could affect the broader U.S. economy, domestic industries, and product sourcing over a six-year period.
According to the USITC, the report will provide detailed analysis of trade flows, production trends, and pricing impacts in sectors most likely to be affected if higher “column 2” tariff rates under the Harmonized Tariff Schedule were applied to Chinese products. The commission will also evaluate an alternative scenario involving a five-year phase-in of tariffs on a narrower list of national-security-related goods from China. Link to notice.
The agency does not plan to hold a public hearing for the PNTR investigation. Public comments are due by April 13, and the final report is expected to be published no later than Aug. 21, 2026.
A second investigation — ordered by the Senate Appropriations Committee — will examine China’s state support and pricing practices in the biotechnology sector and their potential effects on U.S. market share and industrial competitiveness. Link to details.
For this biotechnology review, the USITC will hold a public hearing on May 27–28, with requests to appear due by May 11. Pre-hearing briefs and statements must be submitted by May 14, while electronic copies of oral testimony are due by May 20. Post-hearing briefs are required by June 11, and July 17 is the final deadline for additional written submissions. The final report must be issued within 12 months of enactment of the legislation, with publication expected by Jan. 22, 2027.
Together, the two investigations signal growing congressional scrutiny of China’s trade relationship with the United States — particularly around tariff policy and state-backed industrial strategies — and could shape future debate over trade measures, supply chain restructuring, and industrial policy.
| FOOD POLICY & FOOD INDUSTRY |
— Target to remove artificial dyes from cereal aisle
Retailer accelerates clean-label push as brands reformulate products
Target said it will only carry cereals made without certified synthetic food colors by the end of May, citing customer demand for foods with fewer artificial additives. The company said it has worked with national brands and private-label partners to reformulate products where needed.
The move comes as food makers face mounting pressure to eliminate artificial dyes, with companies such as Kraft Heinz, General Mills, Nestlé USA, and WK Kellogg already setting timelines to remove synthetic colors from U.S. products.
Target’s deadline moves faster than many manufacturers’ plans and aligns with a broader industry shift toward cleaner labels. The change is also part of the retailer’s wider strategy to sharpen its merchandise mix and rebuild momentum through updated store offerings and stronger consumer health positioning.
| WEATHER |
— NWS outlook: A lifting frontal boundary will bring a swath of mixed precipitation from the central to eastern U.S. today into Tuesday… …Locally strong thunderstorms are possible Tuesday across the central Plains, while locally heavy rainfall is possible across the Ohio Valley… …Warmth will surge across the most of the CONUS this week, feeling very much like Spring.
