The big three - March 2026

Middle East conflict drives oil higher 

Escalating conflict in the Middle East was the dominant driver of global markets in early March. The conflict raised concerns that the situation could broaden, particularly given the proximity to critical energy infrastructure and shipping routes such as the Strait of Hormuz, through which a significant share of global oil supply passes and which travel through remains disrupted. 

The immediate market response was a sharp rise in energy prices, with Brent crude oil moving higher on fears of potential supply disruption. It reached a peak of almost $120 per barrel on the 9th March, on the most volatile day for trading in its history.  

This contributed to weaker performance across global risk assets, with equities declining and credit spreads widening as investors reassessed geopolitical risk. At the same time, traditional safe-haven assets outperformed reflecting a broader shift toward risk aversion. 

The surge in oil prices has also raised concerns about a renewed inflation impulse at a time when disinflation progress had appeared to stabilise. Higher energy costs feed through to inflation expectations, potentially complicating the outlook for central banks. Markets have begun to reassess the likely timing and pace of monetary easing, with the Federal Reserve now only expected to cut rates once during the rest of the year.

Reeves unveils Spring Statement 

The UK government’s latest fiscal update, delivered by Rachel Reeves in the 2026 United Kingdom Spring Statement, reflected a more challenging economic backdrop than previously expected. It acknowledged that the outlook for the UK economy has weakened, with official forecasts pointing to slower growth and rising unemployment over the coming year. 

Earlier projections had suggested inflation would fall close to the Bank of England’s 2% target, but recent increases in oil and gas prices risk delaying that progress. For markets, the fiscal update reinforced the view that the UK government is prioritising stability in the public finances rather than large-scale stimulus. With borrowing costs still elevated and growth forecasts revised lower, the scope for additional spending or tax cuts remains limited. 

The wider implication is that the UK economy could face a more difficult policy trade-off. If the conflict in the Middle East leads to persistently high energy prices, keeping inflation elevated while growth slows, the Bank of England may need to remain cautious in easing monetary policy, balancing the need to support growth against the risk that inflation pressures re-emerge. 

Investors eye AI conference 

The annual NVIDIA GTC conference begins this week in San Jose and is widely regarded as one of the most important events in the global artificial-intelligence industry. GTC has become a key barometer for the pace of AI investment. Previous conferences have introduced major hardware platforms such as Nvidia’s Blackwell architecture, which underpins many of the AI data-centre systems currently being deployed by technology firms. 

The scale of spending on chips, networking equipment and power infrastructure has become a central driver of global technology capital expenditure, and more broadly global growth in recent years. Investors will therefore be looking for signs that demand for AI infrastructure remains strong, particularly from large cloud providers and technology companies building AI-focused data centres.  

For investors, the key question is whether the current wave of AI spending represents a durable structural trend or an early-cycle investment boom that could eventually moderate. The announcements at this week’s GTC are therefore likely to shape expectations for technology investment, semiconductor demand and AI-related capital expenditure across global markets in the year ahead.