Global Stock Market | Five triggers that could move markets this week

Concerns over surging energy prices and persistent inflation are set to dominate global financial markets this week, as the Middle East conflict enters a critical phase and key economic signals begin to reflect its impact. According to a Reuters analysis, investors are increasingly recalibrating expectations for growth, inflation, and central bank policy amid heightened geopolitical uncertainty.

War Enters Fourth Week, Markets Turn Volatile

The ongoing Iran conflict is now entering its fourth week with little indication of de-escalation. Reuters reported that markets remain on edge over the potential for further damage to critical energy and business infrastructure in the region. The effective closure of the Strait of Hormuz, a vital global energy transit route, has intensified fears of supply disruptions.


As a result, investors are reassessing the trajectory of monetary policy. Expectations are rising that central banks—particularly in Europe—may need to tighten policy further to contain inflationary pressures. In the United States, the Federal Reserve is seen as having limited room to cut rates in the near term.

Equity markets, which had shown resilience in recent weeks, are beginning to show signs of strain as traders adjust their assumptions on global growth and price stability. Meanwhile, diplomatic efforts are expected to continue, with Gulf nations maintaining coordination and G7 foreign ministers scheduled to meet in Paris later this week.

Energy Sector in Focus at Global Conference

The spotlight will also be on how the energy industry responds to the crisis, with global leaders convening at the CERAWeek conference in Houston. It's highlighted that top executives from major energy companies, along with policymakers, will discuss supply dynamics and market stability.

The conference comes at a time when energy stocks have outperformed broader markets. The data showed that the energy sector has been the best performer in the S&P 500 since the onset of the conflict, underscoring the central role of oil and gas in shaping investor sentiment.

In a parallel development, the United States has broadly authorised companies to resume business with Venezuela’s state oil firm, potentially opening another avenue for global supply. The move signals an attempt to offset disruptions linked to the Middle East crisis.

Business Sentiment Data to Signal Early Impact

Attention will turn to flash business activity data for March, due on Tuesday, which will offer the first comprehensive snapshot of how the conflict is affecting corporate sentiment. Investors are increasingly concerned about the risk of stagflation—a combination of slowing growth and rising prices.

While much of the impact from higher energy costs has yet to filter through the global economy fully, early indicators such as purchasing managers’ indices (PMIs) will provide clues about regional resilience. Europe and Asia are seen as more vulnerable to energy price shocks than the United States, although the effects are expected to be global.

Input cost components within the data will be closely watched, especially after recent figures already pointed to rising price pressures in both Europe and the U.S. The Organisation for Economic Co-operation and Development is also set to release its interim economic outlook later in the week, offering further insight into the global macroeconomic trajectory.

Japan Inflation Data Under Scrutiny

In Asia, Japan’s latest inflation reading will be a key focal point. Previous data showed core consumer inflation easing to the Bank of Japan’s 2% target in January, with expectations of a further decline in February.

However, the data may not yet reflect the recent spike in energy costs caused by the Middle East crisis. The Bank of Japan has already flagged concerns about imported inflation and maintained a cautious but hawkish tone in its latest policy stance.

The yen remains under pressure, hovering near multi-month lows, as rising energy import costs weigh on Japan’s trade balance and currency outlook.

Political Developments Add to Global Uncertainty

Beyond economics, political events in Europe could also influence market sentiment. Denmark heads to the polls this week, with Reuters noting that the election could reflect broader geopolitical tensions, including disputes over Greenland.

Meanwhile, Italy is holding a referendum on judicial reforms, a closely watched vote that could expose fractures within the ruling coalition. The outcome may have implications for political stability and investor confidence in the euro zone.

Outlook: Inflation and Energy to Drive Markets

As the week unfolds, the interplay between geopolitical risk, energy markets, and inflation will remain central to investor decision-making. The evolving situation in the Middle East continues to reshape expectations across asset classes, keeping markets highly sensitive to both economic data and political developments.