Wall Street contemplates an open-ended conflict: Morning Brief
👋 Good morning! Wednesday’s oil price reprieve was short-lived. Prices for Brent (BZ=F) and WTI (CL=F) were hovering just under $100 per barrel on Thursday as the conflict in the Middle East widened, bringing the stock market down.
On the agenda this morning:
🛢️ Making sense of ‘the largest supply disruption’ in history
🚨 Wall Street contemplates a long-term conflict
🛒 Costco customer sues for tariff payback
🐭 Disney+ gets into the short-form video game
🤖 AI’s ‘weird’ advantage
📆 What we’re watching Thursday: On Thursday, the S&P 500 (^GSPC) closed 1.5% down, the Dow (^DJI) 1.6%, and the Nasdaq (^IXIC) 1.8%.
Besides oil and Iran, investors will be watching for another piece of inflation data as the Personal Consumption Expenditures inflation index for January is set for release at 8:30 a.m. ET. While the oil crisis may have made the numbers out of date, there may still be insights to mine.
On the labor market side, the Job Openings and Labor Turnover Survey for January and the University of Michigan sentiment index will hopefully provide a look into the labor market and consumer side of the economy.
📈 Why the real market shock is in long bonds. While the stock market is a convenient barometer for sentiment, the bond market once again may be the key place for insights.
A fuel tanker passes the Mobil fuel distribution centre in the Melbourne suburb of Yarraville on March 12, 2026. (William WEST / AFP via Getty Images) ·WILLIAM WEST via Getty Images
Another day has passed, and the all-important Strait of Hormuz is no closer to being open, as the International Energy Agency (IEA) called the current situation the “largest supply disruption in history.”
Announcements of a 400-million-barrel strategic release have not stopped prices from climbing into the high $90s once again. Meanwhile, Wall Street is constantly moving its price targets for oil, gaming out the length of disruption and price.
A few highlights: Macquarie estimates a “few weeks of Hormuz closure” could push crude to $150 or higher. Bloomberg said a three-month closure could see $160. Iran’s Islamic Revolutionary Guard Corps (IRGC) itself says “expect oil at $200 per barrel.”
Thai cargo ship, Mayuree Naree, which was struck and set ablaze in the Strait of Hormuz Wednesday, March 11, 2026. (Royal Thai Navy via AP) ·ASSOCIATED PRESS
The Overton window seems to be slowly widening to the concept of a more drastic US-led assault on Iran. At the very least, military and financial analysts are now having to game it out.
Thursday’s oil surge and stock market fall reflected the souring mood on Wall Street and signaled investors’ dimming prospects of swift resolution.
Still, a short war is priced in. But should it be? Answering that to the negative would certainly stress markets and represent a downside that investors are closely monitoring.
Some analysts say that dislodging Iran’s control of the vital shipping lane may require a US-led ground assault should diplomacy (or the Navy and insurance escort system) fail.
Again, an escalation to boots on the ground, and the risks of much higher American casualties, is not a scenario the market embraces. But it’s one that some observers are taking as a possibility as Iran’s strategy of squeezing the global economy and battering its US-allied neighbors makes it harder to stay confident in a short war thesis.
Ironically, a rapid deescalation, hasty withdrawal, and declaration of victory also carries its own risks.
While this might appease the market panic by leading to a reopening of the waterway, it may also cripple relations with Gulf Arab states, which enjoy a symbiotic relationship with the US.
Price of fuel is displayed at Costco Petrol Station in West Thurrock, Essex, Thursday, March 5, 2026. (Jordan Pettitt/PA Images via Getty Images) ·Jordan Pettitt – PA Images via Getty Images
The Supreme Court’s ruling against the Trump administration’s wide-ranging tariffs opened the door for the companies to claw that money back.
But a Costco customer posed a logical follow-up: What about me?
A plaintiff seeking nationwide class-action status sued Costco earlier this week in an attempt to get the wholesaler to pass on to members whatever refund it may get from the government.
Costco is among more than 2000 companies suing the administration to get a tariff refund. The argument from the plaintiff’s perspective is that, if Costco gets its money back, it would be unfairly receiving a double payment — first from the upcharge in higher prices it collected from customers, and again from the refund.
As Costco CEO Ron Vachris said last week, it’s not clear if his company or any others will actually get their refunds, or when potential refunds might arrive. But if Costco does recover the duties it paid, he said, the money would go to lowering prices and improving the business.
Instead of this hypothetical future benefit, the plaintiff would rather get a check.
When you think of short-form video, lifestyle influencers and absurd comedy sketches might come to mind.
But as unsettling as it might sound, Hollywood is experimenting with turning vertical video content into the next TV. If Instagram Reels and TikTok are attracting so many audiences, why not get into that space?
Disney+ has begun to roll out its new short-form video feed to US users, called Verts. Crucially, the clips aren’t actually originals (yet), but rather scenes and big moments from Disney+ content.
But the significance of Verts is that even the most iconic brand in entertainment is realizing that short-form video is where their customers’ eyes and attention are glued.
And similar to Disney’s new partnership with OpenAI, Verts represents another way to get people into the Disney merch machine. Watch enough clips of Avatar on Verts, and you might just decide to fire up Disney+ and commit to a rewatch of the movies. (Can the massacred youth attention span handle a three-hour movie?)
Or, perhaps more likely, book an Orlando vacation or buy the action figures for your kids. On and on the content flywheel spins.
Most straightforwardly, implanting a native, Disney-content version of TikTok inside of Disney+ will be a powerful way to boost watchtime and engagement on the streaming platform.
Without any weirdness about asking for money, a chatbot can easily take care of work that people avoid. Finding the right words, mustering up courage? No problem.
With data behind what works, the company says AI integration has goosed sharing of campaigns 10% — and that it’s sharing that drives donations.
Economic data: PCE price index, month-on-month, January (+0.3% expected, +0.4% previously); PCE price index, year-on-year, January (+2.9% expected, +2.9% previously); Core PCE price index, month-on-month, January (+0.4% expected, +0.4% previously); Core PCE price index, year-on-year, January (+3.1% expected, +3% previously); Personal income, January (+0.5% expected, +0.3% previously); Personal spending, January (+0.3% expected, +0.4% previously); Durable goods orders, January preliminary reading (+0.4% expected, -1.4% previously); GDP annualized, quarter-on-quarter, Q4 (1.4% expected, 1.4% previously); JOLTS job openings rate, January (+3.9% previously); JOLTS quits rate, January (+2% previously); JOLTS layoffs rate, January (+1.1% previously); University of Michigan sentiment, March preliminary reading (56.3 expected, 56.6 previously); U. Mich. current conditions, March preliminary reading (56.6 previously); U. Mich. expectations, March preliminary reading (56.6 previously); U. Mich. 1-year inflation, March preliminary reading (+3.4% previously); U. Mich. 5-10 year inflation, March preliminary reading (+3.3% previously)
Earnings calendar: VEON Ltd. (VEON), RLX Technology Inc. (RLX)
Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.
