The conflict involving Iran continues to intensify at the start of the new week, pushing oil prices above $100 per barrel and fueling concerns about renewed global inflation pressures. At the same time, the Federal Reserve has entered its policy blackout period as a series of important inflation and labor market data releases approach. On the corporate front, upcoming earnings from Oracle (NYSE:ORCL) and Adobe (NASDAQ:ADBE) are expected to draw attention as the technology sector grapples with disruption tied to artificial intelligence.
1. Iran conflict raises risk of an oil shock
As in recent days, the joint military campaign by the U.S. and Israel against Iran is likely to remain the central issue for financial markets this week.
Over the weekend, both sides exchanged airstrikes targeting key infrastructure, dampening already fading expectations that the conflict could end quickly.
The situation grew more uncertain after Mojtaba Khamenei was named Iran’s new supreme leader. Even before the announcement, U.S. President Donald Trump had warned that appointing the son of former leader Ayatollah Ali Khamenei—who was killed during the initial U.S. and Israeli strikes on February 28—would be “unacceptable.”
For markets, much of the attention has centered on the impact of the conflict on energy prices. Brent crude rose above $100 per barrel on Monday as traders worried that the fighting could disrupt critical oil flows through the Strait of Hormuz, a strategic waterway located south of Iran.
Although reports that Saudi Arabia may increase crude supply helped calm an earlier surge in prices, policymakers have increasingly warned that the conflict could reignite inflationary pressures. In the U.S., fears of a prolonged period of weak growth combined with high inflation—the so-called “stagflationary” scenario—are beginning to gain traction.
2. Key U.S. inflation data ahead
Against this backdrop, investors will be closely watching two major U.S. inflation indicators due this week.
The first, scheduled for Wednesday, will measure consumer price changes in February. Economists expect the consumer price index to have risen slightly to 2.5% year-on-year, up from 2.4% in January. On a monthly basis, CPI is projected to increase 0.3%, compared with 0.2% previously.
Excluding volatile components such as food and energy, core CPI is expected to come in at 2.5% year-over-year and 0.2% month-over-month.
Later in the week, on Friday, the core personal consumption expenditures price index for January will be released. Analysts forecast the measure to show an annual increase of 3.1% and a monthly rise of 0.4%. The reading will draw particular scrutiny because it is one of the Federal Reserve’s preferred gauges of inflation.
Additional labor market data is also due Friday, including the job openings and labor turnover survey for January.
“A data-heavy week could test market conviction across equities, forex and indices,” said Laurence Booth, Global Head of Markets at CMC Markets.
3. Fed enters blackout period
Federal Reserve policymakers currently face conflicting pressures: signs of a weakening labor market on one side and the possibility of renewed inflation on the other.
Cutting interest rates could support employment but risk fueling inflation further. Raising rates could help contain price pressures but might dampen hiring.
Given this balancing act, investors appear to expect the Fed to leave interest rates unchanged at its upcoming policy meeting next week. The central bank has now entered its blackout period ahead of the March 18 decision.
Beyond that meeting, the outlook remains uncertain as markets try to gauge the future path of inflation and employment.
Bond yields have risen and the U.S. dollar has strengthened as traders reduce expectations that the Fed will begin cutting rates early in the second half of the year.
4. Oracle earnings in focus
On the corporate side, Oracle will be among the most closely watched companies reporting earnings this week.
Once considered a secondary player in the cloud computing market, Oracle has gained prominence through its partnership with OpenAI, which relies on the company’s data center infrastructure to run artificial intelligence models.
However, investors have grown increasingly cautious about the cost of building the massive data center capacity needed to support OpenAI and other clients such as Meta Platforms.
Oracle said in December that it now expects capital expenditures to reach $50 billion during its current fiscal year, a sharp increase from its earlier estimate of $35 billion.
Bloomberg News has reported that the company is considering cutting thousands of jobs as part of efforts to manage spending. Another Bloomberg report indicated that Oracle and OpenAI have abandoned plans to expand a major AI data center project in Texas after extended financing discussions.
Oracle shares, which climbed to around $328 in September, were trading at $152.96 before the start of U.S. trading on Monday. The stock has declined more than 20% so far this year.
5. Adobe results ahead
Adobe is also scheduled to report earnings this week.
The company, known for software products such as Photoshop and Acrobat, remains a central player in the creative software industry. However, it has also faced growing competition from emerging AI-powered tools.
In response, Adobe has accelerated its own artificial intelligence strategy, integrating AI capabilities across its product lineup through its Firefly platform.
So far, that strategy appears to be gaining traction, with company executives forecasting fiscal 2026 revenue and profit above Wall Street expectations.
Nevertheless, Adobe has not been immune to the broader selloff in software stocks this year, driven by investor concerns that AI startups—such as Anthropic, the company behind Claude—could disrupt the sector. Adobe shares have fallen more than 14% since the start of the year.