Geopolitical tensions in the Middle East are dominating attention heading into the new trading week, after U.S. and Israeli strikes on Iran triggered a selloff in equities and a sharp rally in oil prices. Alongside the geopolitical backdrop, markets will also focus on major economic data releases and corporate earnings, including the February U.S. jobs report and quarterly results from Broadcom (NASDAQ:AVGO) and Target (NYSE:TGT). Meanwhile, the White House is expected to convene major technology firms to address rising artificial-intelligence-related energy costs.
1. Iran conflict remains center stage
Geopolitical developments are expected to drive market sentiment as investors assess the fallout from U.S. and Israeli military action against Iran.
Over the weekend, Washington and Tel Aviv confirmed coordinated strikes across Iranian targets that reportedly killed several senior officials, including Supreme Leader Ayatollah Ali Khamenei. U.S. President Donald Trump has called on Iranian opposition forces to challenge the country’s long-standing political system, though Reuters reported that many senior U.S. officials remain doubtful that regime change is imminent.
Questions also remain about how long the United States intends to stay engaged militarily. Trump told the New York Times operations could continue for “four to five weeks.” He added that he has “three very good choices” for Iran’s future leadership but “won’t be revealing them now,” according to the newspaper.
Iran responded with retaliatory strikes across the region, targeting locations tied to U.S. allies in energy-producing Gulf nations. Media reports citing U.S. Central Command said three American servicemembers were killed and five seriously injured, while Trump warned additional casualties could occur.
Signs of escalation beyond Iran have also emerged, with Israel striking Hezbollah-linked positions in Lebanon. The Wall Street Journal reported that at least one U.S. aircraft had been downed in Kuwait.
Markets reacted swiftly: U.S. stock futures dropped, oil prices surged amid fears Iran could disrupt shipping through the Strait of Hormuz, and gold prices climbed as investors sought safe-haven assets.
“So far, the immediate market response follows a well-worn script,” said Lauren Hyslop, Fund Manager at Mattioli Woods.
“What makes this moment particularly watchable is the fork in the road ahead. A swift de-escalation would allow markets to shake off the initial losses with relative ease. Prolonged disruption to shipping and insurance, the more plausible near-term outcome, keeps energy prices elevated and sentiment fragile.”
2. Focus turns to U.S. nonfarm payrolls
Beyond geopolitics, investors will closely monitor a busy calendar of economic data releases.
The February nonfarm payrolls report will be the week’s headline indicator, offering fresh insight into the strength of the U.S. labor market early in 2026.
Artificial intelligence continues to influence labor-market discussions, with analysts increasingly debating whether automation could accelerate layoffs. Concerns intensified after payments company Block announced plans last week to cut roughly 40% of its workforce.
Federal Reserve policymakers remain focused on employment trends, keeping interest rates unchanged while awaiting clearer signals on economic momentum.
Economists currently expect the U.S. economy added about 58,000 jobs in February, down from January’s 130,000 increase.
3. Broadcom earnings in focus
On the corporate side, semiconductor group Broadcom will draw significant attention as investors look for updates on its artificial-intelligence chip strategy.
While AI demand is widely viewed as a major growth driver, some analysts worry that expanding AI infrastructure could pressure margins and increase operating costs. CEO Hock Tan previously said the company holds a $73 billion backlog covering roughly the next 18 months, though management has cautioned margins may tighten.
Analysts cited by Reuters have also raised concerns about customer concentration, noting that a large portion of Broadcom’s AI revenue depends on a small group of hyperscale clients, including Meta Platforms and Alphabet.
The results arrive amid broader uncertainty about when heavy AI investment by hyperscalers will translate into stronger shareholder returns. Software stocks have already faced pressure from fears of disruption tied to emerging AI tools.
The S&P 500 Information Technology index has declined more than 5% so far this year.
4. Target earnings to shed light on consumers
Retailer Target is also scheduled to report results, providing another gauge of U.S. consumer health amid ongoing affordability pressures.
Although President Trump has described the economy as “roaring,” recent polling suggests consumer sentiment remains cautious. A Reuters/Ipsos survey last month found that 68% of respondents — including many Republicans — disagreed with that characterization.
Economic growth slowed more than expected in the fourth quarter, though many economists attributed the weakness to a temporary government shutdown, pointing instead to resilient household and business spending.
Target has struggled to match stronger performance from competitors such as Walmart, as budget-conscious consumers cut discretionary purchases. The company’s profits have declined roughly 14% over the past five years, prompting increasing scrutiny from shareholders, including major pension funds.
5. White House meeting with AI leaders
The AI narrative will shift to Washington later this week, where Trump is expected to host leading artificial intelligence and data-center companies at the White House.
Microsoft, Amazon and Meta are reportedly among the participants and are expected to formalize an agreement aimed at shielding customers from rising electricity costs tied to AI infrastructure expansion, according to Reuters. AI startup Anthropic is also expected to attend, despite tensions with the administration over safeguards built into its systems.
While the administration has strongly supported expanding U.S. AI capabilities to compete with China, the rapid buildout of power-hungry data centers has raised concerns about electricity prices ahead of November’s midterm elections.
Analysts cited by Reuters cautioned that limiting energy price increases tied to AI expansion may prove difficult in practice.