Weekly Roundup Feb. 23-27

IRAN CONFLICT SURGES | CPI & PPI | MARKETS VOLATILE

By: Lorenzo Alfonso and Hollis Costa

Mar. 1, 2026 

The Economy at a Glance

Major U.S. stock indexes declined during the week amid ongoing concerns surrounding AI, global trade, and tariff uncertainty. Equities started the week on a negative note, selling off on Monday after a widely circulated research report amplified worries about potential AI-driven disruption risks across various industries and the broader economy. Sentiment improved on Tuesday and Wednesday ahead of NVIDIA’s quarterly earnings. However, indexes ultimately declined through the end of the week, as the chipmaker’s consensus-topping results failed to reverse the broader risk-off tone in markets.

CPI and PPI

The Consumer Price Index (CPI) and Producer Price Index (PPI) released this week showed two sides of the inflation story.

PPI came in hotter than expected, with final demand up 0.5% and core measures rising between 0.3% and 0.8%, depending on the definition used. The increase was not isolated to one category. Price pressures appeared broadly across goods and services, suggesting production-level inflation has not fully cooled.

CPI, on the other hand, showed some easing. Inflation fell to 2.4% from 2.7% in December, the lowest level since mid-2025. Shelter remained the largest contributor, rising 0.2% on the month and continuing to apply pressure to overall prices.

The gap between PPI and CPI is worth monitoring. Businesses can absorb higher producer costs by compressing margins, which can delay those increases from reaching consumers. However, if producer prices remain elevated, those costs often work their way into CPI over time.

Markets will now turn their attention to the upcoming PCE report, which should provide further clarity on where inflation and broader economic momentum are heading next.

U.S and Israel War

On February 26th, the U.S. and Israel launched a coordinated strike referred to as Operation Epic Fury (U.S.) and Operation Roaring Lion (Israel). This was described as a significant military escalation in the region. Using Israeli military intelligence alongside U.S. military capabilities, the operation was conducted and remains ongoing.

The stated objective was to target high-level leadership, including Supreme Leader Ayatollah Ali Khamenei, who was reported killed over the weekend on March 1st. Iran has since entered a period of political instability, reportedly overseen by an interim leadership structure.

The administration stated the goal of the strike was to prevent Iran from advancing its nuclear program after negotiations surrounding enrichment limits failed. Officials described Iran as posing a serious threat to regional stability.

Additionally, Iran has faced ongoing internal unrest, with anti-government protests occurring over recent years. Reports indicate thousands of Iranian citizens have been killed during clashes and crackdowns. U.S. leadership has characterized the regime as dangerous and cited this instability as part of the broader geopolitical concern.

Iran has also maintained relationships with groups such as Hamas and Hezbollah, increasing regional tensions.

As mentioned last week, this conflict directly impacts U.S. consumers through energy markets. Roughly 20% of the world’s oil supply passes through the Strait of Hormuz near Iran. Since the escalation, crude oil prices have surged. Analysts warn oil could move above $100 per barrel if tensions continue.

Looking Ahead

Next week, markets will continue to monitor crude oil prices as the conflict develops.

Key economic releases on Friday include jobs and unemployment data from the U.S. Bureau of Labor Statistics, retail sales and business inventories from the U.S. Census Bureau, and consumer credit data from the Federal Reserve.

Glossary

Risk-Off Tone

This is when investors pull money out of stocks and move into safer assets like bonds or cash. It usually happens when there’s fear in the market — geopolitical tension, inflation concerns, or uncertainty about growth.

CPI (Consumer Price Index)

This measures how much everyday goods and services cost compared to last year — things like rent, food, and gas. When CPI goes up, it means consumers are paying more.

PPI (Producer Price Index)

This tracks inflation at the business level. It measures what companies are paying for materials and services before products ever reach consumers. If PPI stays high, businesses may eventually pass those costs on to us.

Core Inflation

This removes food and energy from inflation data because those prices swing around a lot. It gives a cleaner look at underlying price trends.

PCE (Personal Consumption Expenditures)

This is the Federal Reserve’s preferred inflation gauge. It measures how much people are spending and how prices are changing within that spending. The Fed watches this closely when deciding on interest rates.

Margin Compression

When companies face higher costs but don’t raise prices, their profits shrink. That squeeze on profits is called margin compression.

Consensus Estimate

This is the average forecast from economists and analysts before a report is released. Markets often react not just to the number itself, but to whether it beats or misses expectations.

Strait of Hormuz

A narrow waterway in the Middle East where a large portion of the world’s oil supply passes through. If tensions rise there, oil prices usually react quickly.

Geopolitical Risk

This refers to global political tensions — wars, trade disputes, sanctions — that can affect markets and economic stability.

Retail Sales

A report that shows how much consumers are spending in stores and online. Since consumer spending makes up a large part of the economy, this number matters a lot.