WWIII: Epic Fury
On February 28, 2026, the United States and Israel began coordinated attacks on various sites in Iran, starting a major war aimed at regime change. A new chapter in escalating global conflicts.
I'm surprised this happened at all, given the already strained US position. Even more surprised by the timing, some are saying it's a distraction from the Epstein files release. It probably serves that purpose, but I can't believe decisions about major wars are primarily influenced by political scandals.
I've been contacted by several people asking how the war affects markets. Initially I wanted to write predictions, but I decided instead to focus on explaining what's happening now, because the market reaction is surprising in many ways.
The Data
Here's what happened in the first week of the war:
| Asset | 27 Feb | 2 Mar | Δ% | 6 Mar | Δ% total |
|---|---|---|---|---|---|
| COMMODITIES | |||||
| Crude (WTI) | $67.00 | $71.00 | +6.0% | $90.00 | +34.3% |
| Brent | $73.00 | $77.50 | +6.2% | $93.00 | +27.4% |
| Henry Hub | $2.859 | $2.960 | +3.5% | $3.186 | +11.4% |
| TTF | $31.96 | $44.50 | +39.2% | $53.40 | +67.1% |
| EQUITIES | |||||
| S&P 500 | 6,864 | 6,874 | +0.1% | 6,731 | −1.9% |
| KOSPI 200 | 933 | 859† | −7.9% | 828 | −11.3% |
| Nikkei 225 | 58,732 | 57,693† | −1.8% | 54,624 | −7.0% |
| HSI | 26,630 | 26,059 | −2.1% | 25,757 | −3.3% |
| VIX | 19.85 | 21.43 | +8.0% | 29.48 | +48.5% |
| FX | |||||
| DXY | 97.60 | 98.50 | +0.9% | 98.80 | +1.2% |
| USDJPY | 156.00 | 157.36 | +0.9% | 157.80 | +1.2% |
| BONDS (yield) | |||||
| US 10Y | 3.949% | 4.036% | +8.7bps | 4.138% | +18.9bps |
| UK 10Y | 4.305% | 4.377% | +7.2bps | 4.641% | +33.6bps |
| DE 10Y | 2.644% | 2.719% | +7.5bps | 2.864% | +22.0bps |
| FR 10Y | 3.222% | 3.296% | +7.4bps | 3.525% | +30.3bps |
| OTHER | |||||
| Gold | $5,248 | $5,311 | +1.2% | $5,158 | −1.7% |
| BTC | $65,868 | $68,821 | +4.5% | $69,114 | +4.9% |
† KOSPI and Nikkei: 2 March was holiday — figure shown is 3 March
What's Surprising
The gas market fractured overnight. TTF up 67% in one week while Henry Hub only moved 11%. This is the largest single-week move I have in my dataset for TTF. Europe and the US are now operating in completely separate price regimes.
Asian equities sold off hard, US markets barely moved. KOSPI down 11%, Nikkei down 7%, that's coherent given their oil dependency. But the S&P 500 is only down 1.9% despite every other asset class pricing in a major shock. Meanwhile VIX jumped to 30. The options market and the underlying index are telling completely opposite stories.
European bonds moved as much as US bonds. US 10-year yields rising 18.9bps makes sense, the US is in the war. But German bunds up 22bps? French OATs up 30.3bps? UK gilts hit 42.5bps intraday. Europe isn't even a party to this conflict, yet their bond markets are treating it like a domestic crisis.
Gold finished the week below its pre-war price. The classic safe haven is down 1.7% during what might be the most significant geopolitical shock in years. Bitcoin, which sold off in every previous crisis, is up 4.9%. An asset that's supposed to be volatile speculation is now behaving as the cleaner safe haven.
What This Means
Some of these markets are in total delusion.
Look at the data: TTF is pricing in a catastrophic energy crisis. VIX is pricing in market stress. Asian equities are pricing in a major geopolitical shock. European bonds are pricing in a domestic crisis despite having no direct war exposure.
Meanwhile, the S&P 500 is down 1.9%.
The S&P number might be misleading, sectors are behaving very differently, creating a strange headline figure. But that doesn't resolve the contradiction.
And then there's gold and Bitcoin. Gold down 1.7% during a major war, Bitcoin up 4.9%, sneither of these moves makes any sense to me. Gold should be rallying hard as the classic safe haven. Bitcoin's behavior looks like pure noise masquerading as a signal. I don't believe either price action reflects genuine safe-haven flows.
Both of these things cannot be true. Either the energy markets, options markets, Asian equities, and European bonds are all wildly overreacting to a war that doesn't matter, or US equities are ignoring a reality that will eventually force repricing.