Surging Oil Prices Spark Renewed Investor Fears

0:00Welcome to Risk Reversals Market Matrix, your AI-generated podcast curated by Guy Adami and Dan Nathan, breaking down the day's most impactful stock market and business headlines. I'm your host Brunson, and all of today's market data is provided by FACSET, its Thursday, March 5th, and these are your top stories. Stocks sold off today as renewed concerns over the Iran War pushed oil prices higher, with US crude, briefly topping $80 per barrel for the first time since early 2025. The Dow Jones industrial average fell about 785 points, while the S&P 500 and NASDAQ also slipped, as investors worried that higher energy prices could slow the global economy and reignite inflation. Oil surged after Iran, reportedly hit an oil tanker with a missile, raising fears about disruptions in the straight-of-war moves, a key route for roughly 20% of the world's oil supply. The sell-off was led by economically sensitive sectors like industrials and materials, including

1:03companies such as Boeing and Caterpillar, which tend to suffer if global growth slows. CNBC writes that sentiment among retail investors has turned increasingly cautious, a weekly American association of individual investors. Survey shows neutral sentiment jumped to 31.4%, the highest level since January 2025, as investors weigh geopolitical risks and the potential economic impact of higher energy prices. The US dollar has strengthened since the Iran War began, with investors flocking to the greenback for safety. As Axios notes, it's happening because they have little choice, when geopolitical risk spikes, money tends to flow into dollars, reinforcing the currency's role as a global safe haven. Higher oil prices are also boosting demand, since energy is traded globally in US dollars, highlighting that despite periodic concerns about de-dollarization, the dollar's dominance remains intact. Meanwhile, fresh inflation concerns are shifting expectations for monetary policy.

2:03Bond options traders are increasingly vetting the Federal Reserve may not cut interest rates this year. Data compiled by the Atlanta Fed shows traders now see about a 25% chance the Fed holds rates steady through December. Up from 17% before the conflict began, while markets now price in about 35 basis points of cuts by year end, down from roughly 60 basis points last week. Bloomberg reports that Oracle is planning to cut thousands of jobs, as it manages the heavy costs of a massive AI data center expansion. The company is spending aggressively to build infrastructure for AI workloads for customers, such as open AI, as it tries to compete with cloud leaders Amazon and Microsoft. The spending is so large that analysts expect Oracle's cash flow to turn negative for several years, prompting the company to consider layoffs and slow hiring. Some of the cuts may also target roles that Oracle believes will be replaced or reduced by AI. Meta plans to expand its in-house AI chip efforts, including eventually developing processors,

3:04capable of training future artificial intelligence models. CFO, Susan Lee, said the company has already deployed custom silicon for specific workloads, such as ranking and recommendation systems, and expects those efforts to grow over time. While Meta recently struck major deals with NVIDIA and AMD to power its expanding data center infrastructure, the company still views internally designed chips as an important long-term strategy. The approach reflects a broader plan to use a mix of third-party and custom chips to optimize performance and manage costs as AI spending accelerates. Bloomberg reports that the Trump administration is weighing new rules that would require U.S. approval for most global exports of advanced AI chips, effectively giving Washington major influence over where countries can build AI data centers. The proposal would expand export controls beyond about 40 countries, and position the U.S. government as a gatekeeper for global AI infrastructure, with larger chip deployments, potentially requiring government-level approval, and investment commitments to the U.S.

4:08At the same time, the Financial Times reports that NVIDIA has halted production of H-200 chips for China, redirecting capacity at TSMC to its next-generation Vera Rubin architecture, a mid-uncertainty over export approvals, and possible Chinese restrictions. Rather than waiting for policy clarity, NVIDIA is focusing on stronger demand from U.S. tech giants like OpenAI and Google, potentially speeding up the rollout of its newest AI hardware. Speaking of China, the country set a GDP growth target of 4.5% to 5% for 2026, signaling greater acceptance of slower economic expansion as it grapples with weak consumer spending, a struggling real estate sector, and softer investment. The Wall Street Journal notes the target is the lowest since at least the 1990s, and growth below 5% would mark the slowest pace in more than three decades outside the pandemic. Beijing is prioritizing domestic demand and fiscal support, including a roughly 4% budget deficit, and about $116 billion in new financing tools to boost investment.

5:17That's your risk-reversal market matrix. Be sure to follow us to get alerts on new episodes every day. All of the articles mentioned on today's podcast can be found in the show description. To get Guy Adami and Dan Nathan's market analysis on these topics and more, listen to market call on Risk Reversals YouTube page Monday through Thursday. Story Curation by Risk Reversal, Scripts by PerplexityPro, Voice by 11 Lapse. I'm Brunson. Thanks for listening.