Oil prices leaped on Monday with the rising concerns that the U.S.-Iran war could clog the global flow of crude and make inflation even worse. Meanwhile, U.S. stocks swung from sharp losses to a slight gain, as investors shrugged off concerns that could restrict the global oil supplies. All three major indexes shook off early losses to close slightly above or below where they started the trading day.
The S&P 500 closed nearly flat on Monday, March 2, 2026, recovering from sharp intraday losses after U.S. strikes on Iran sparked global market volatility. The index ended the session up 0.04% at 6,881.62, reversing a 1.2% decline seen earlier in the day. The Nasdaq Composite rose 0.4% to 22,748.86, outperforming the broader market during the rebound. While the Dow Jones Industrial Average slipped 0.15%, to settle at 48,904.78, weighed down by travel and consumer sectors, and the CBOE Volatility Index (VIX) spiked to 25.2 before settling near 22 as “buy the dip” sentiment neutralized panic.
Dip Buyers Drive Tech Rebound
Traders actively ‘bought the dip’ with strong rebounds in tech stocks like Nvidia and Microsoft, rising 3% and 1.5%, respectively, during the recovery. The market’s resilience was fueled by expectations that the conflict would be short-lived, as historical patterns portrayed equities often recovering after geopolitical shocks, and a strong bid for AI-focused and defense stocks.
Despite a spike in oil prices, with Brent crude rising nearly 8% and concerns over supply disruptions through the Strait of Hormuz, investors remained confident that the impact on the U.S. economy would be limited. The S&P 500 rebound reflected a selective repositioning rather than a broad panic, a sign that even dip-buyers recognize this sell-off is accompanied by unusually sharp oil spikes.
As investors rotated into haven assets, gold touched about $5,360 an ounce before paring gains. Meanwhile, Treasury yields moved higher as markets scaled back bets on interest rate cuts amid concerns over rising inflationary pressures.
Defense Stocks Outperform Amid Market Turmoil
The defense sector emerged as a rare bright spot amid a broader market sell-off triggered by fears of a wider regional conflict. Germany’s Hensoldt and Britain’s BAE Systems were among the top performers in the Stoxx 600, up approximately 5% and 6%, respectively. Japan’s defense heavyweights Mitsubishi Heavy Industries and IHI rose nearly 3% each, and Singapore’s ST Engineering climbed 2.8%.
The U.S. firms Lockheed Martin and Northrop Grumman rose more than 2-3% and nearly 6%, respectively. Additionally, energy stocks also witnessed the spike, with Exxon Mobil (XOM) gaining over 5% intraday as global energy markets reacted to potential supply chokepoints in the Middle East.
However, the airline and travel stocks slipped, followed by the airspace closure throughout the Middle East, forcing carriers to cancel thousands of flights. Cruise lines’ stocks also fell sharply, with Royal Caribbean Cruises dropping 3% and Carnival Corp. sliding more than 7%. Furthermore, United Airlines, which has the most international exposure of the U.S. carriers, fell nearly 3%, and Norwegian Cruise Line Holdings slipped 10% after its disappointing earnings call. While AES Corp plunged 17.8% after a BlackRock-led consortium agreed to acquire it at a discount.
Market Shows Strength, But Not Complacency
The current surge has been driven by dip buyers. Several market observers posted on social media that history has consistently shown how markets quickly shake off such geopolitical issues.
An X handle posted that “This is not panic buying anymore, War is far from over.” While the markets have shown resilience, analysts cautioned that it is not complacent, noting that conditions remain highly fluid.
