Stocks Undeterred By Iranian Conflict

0:00Welcome to Risk Reversals Market Matrix, your AI-generated podcast, curated by Guy Adami and Dan Nathan, breaking down the day's most impactful stock market and business headlines. I'm your host Brunson, and all of today's market data is provided by FACTSAT, its Monday, March 2nd, and these are your top stories. US stocks rebounded from early losses today, as investors bought the dip following US Israeli strikes on Iran. With the US and P500 closing in the green, after being down more than 1% at its lows, sentiment improved as oil prices pulled back from session highs, despite still being elevated, easing fears of an immediate economic shock, while investors rotated into mega-cap tech names like Nvidia and Microsoft viewed as resilient. Defense and energy stocks also rallied, and traders pointed to historical patterns, showing equities often recover within weeks of major geopolitical conflicts. Still, risks remained tied to oil, particularly after Iran's signaled the Strait of Hormuz

1:04was closed, raising concerns that a prolonged disruption could push energy prices higher and reignite inflation pressures. In an interview with CNBC, JP Morgan, CEO Jamie Diamond, said the US Israeli strikes on Iran are unlikely to significantly hurt the US economy, or drive sustained inflation unless the conflict becomes prolonged, noting markets typically absorb short-lived geopolitical shocks. He cautioned gasoline prices could rise in the near term, and warned retaliation is likely through cyberattacks or terrorism, with banks and critical infrastructure potential targets. While acknowledging those immediate security risks, Diamond emphasized investors should focus on the duration of the conflict, rather than the initial shock to markets. The ultimately expressed cautious optimism the situation could even improve long-term geopolitical stability, and potentially act as a catalyst for a more durable peace in the Middle East. The FT reports that hedge funds are reassessing heavy positions in emerging markets after

2:05the US Israeli strikes on Iran, pushed investors towards safe havens, sending EM stocks, currencies, and bonds lower. The MSCI emerging markets equity index fell nearly more than 1 percent, reversing a rally that had been fueled by a weaker dollar and low energy costs. Investors worry the crowded long EM trade, which had become one of the year's most popular macro bets, could unravel if higher oil prices persist, especially for energy importing economies such as Turkey and India. Still, managers say a lasting sell-off likely depends on whether the conflict becomes prolonged, with many funds hedging exposures rather than exiting positions entirely while they wait for clarity. Bloomberg reports that wagers on geopolitical events surged to record levels on the prediction market platform, Polly Market, following US Israeli strikes on Iran, with $425.4 million bet in a single week and total site activity reaching $2.4 billion. Much of the activity centered on Iran-related outcomes, including contracts tied to the

3:09timing of military strikes, and even whether Iran's Supreme Leader Ayatollah Ali Khamenei would remain in power while blockchain analysts flagged trading patterns that suggested possible advance knowledge of the attacks. The boom has intensified legal and ethical concerns, because US regulators generally prohibit financial contracts linked to war, assassination, or terrorism, yet Polly Market operates offshore and outside direct oversight. Lawmakers are now urging the commodity futures trading commission to crack down, highlighting how rapidly growing prediction markets are colliding with national security risks and regulatory gray areas. Mortgage rates bounced higher to start the week, with the average 30-year fixed rising 13 basis points to 6.12%, after briefly dipping below 6% and touching 5.99% last week. The move tracked the 10-year treasury yield climbing back above 4%. As geopolitical tensions and higher oil prices stirred renewed inflation concerns.

4:12However, Mortgage News Daily's Matthew Graham said the rate increase was likely more technical than geopolitical, driven by month and bond buying reversing into new month positioning rather than oil volatility. As a result, further declines in mortgage rates may be difficult without supportive economic data, putting added importance on upcoming releases like the monthly jobs report and potentially complicating the spring housing market for sideline buyers. Turning to some other headlines, catching our attention, Apple announced a new round of hardware updates led by the iPhone 17E, its lower price smartphone, which keeps the $599 starting price while adding the A19 processor in-house wireless chips, MagSafe charging, and more durable glass. According to Bloomberg, the phone maintains the same 6.1-inch design and single 48-megapixel camera, positioning it as a mid-tier option aimed at price-sensitive buyers and emerging markets like India, competing with Samsung and Google's budget lines.

5:14Apple also upgraded the iPad Air to an M4 chip, about 30% faster, while keeping prices at $599 for the 11-inch and $799 for the 13-inch, with pre-orders starting March 4th and store availability March 11th. The launches begin a broader product wave this week, with new Macs expected and a foldable iPhone planned for later in the year, as Apple tries to sustain recent strength in its iPad and hardware sales. Nvidia shares were up 3% today after the company announced a multi-year partnership with Lumentum that includes a multi-billion dollar purchase commitment and a $2 billion investment to expand production of optical and laser components essential for AI data centers, particularly silicon photonics, and high-speed interconnects that improve efficiency and scale. The deal highlights how the AI build-out now extends beyond GPUs into networking and optical infrastructure needed to run large computing clusters. At the same time, Morgan Stanley reiterated an overweight rating and $260 price target,

6:20arguing the recent pullback offers an attractive entry point, and that fears of AI spending peaking are overstated. The bank believes hyper-scaler demand and next-generation platforms will keep AI infrastructure growth durable into 2027, supporting continued optimism around Nvidia's longer-term outlook. Anthropics AI chatbot Claude briefly went offline Monday after a surge in usage, with the company citing unprecedented demand, as free users rose more than 60% since January, and paid subscribers more than doubled since October. The outage affected consumer apps, but not enterprise customers, using the models through integrations, and service was restored later in the morning. The spike in interest comes amid a public dispute with the Pentagon, which labeled Anthropic a supply chain risk over its refusal to allow its AI to be used for domestic surveillance, or fully autonomous weapons. The controversy has broadened the competitive landscape, as rival open AI simultaneously

7:22agreed to deploy its models inside a defense department's systems, highlighting a growing divide in how major AI companies approach military and government use of their technology. Bloomberg reports Elon Musk's social network, X, and AI company, XAI Plan, to fully repay about $17.5 billion of debt. With Morgan Stanley informing Lenders, the liabilities will be paid off, though the funding source hasn't been disclosed. X had taken on roughly $12.5 billion during Musk's Twitter acquisition, and XAI borrowed about $5 billion, but recent equity fundraising, including XAI raising $20 billion, and corporate restructuring across Musk's companies, appear to have strengthened their balance sheets. The move comes, as Musk consolidates his businesses under XAI holdings, and prepares for a potential space XIPO, while some bonds will be redeemed early at a premium to investors. Paying down the debt reduces heavy interest burdens for X and XAI, both of which have

8:25been cash intensive, and signals an effort to clean up finances ahead of public market ambitions. That's your risk reversal market matrix. Be sure to follow us to get alerts on new episodes every day. All of the articles mentioned on today's podcast can be found in the show description. To get Guy Adami and Dan Nathan's market analysis, on these topics and more, listen to market call on risk reversals YouTube page Monday through Thursday. Story curation by risk reversal, scripts by perplexity pro, voice by 11 laps. I'm Brunson. Thanks for listening.