Hormuz Closed. OPEC Added 206,000 Barrels.

GOOD MORNING, The market entered March with a completely different risk map. U.S. and Israeli strikes on Iran pushed shipping through the Strait of Hormuz toward a standstill, sending Brent roughly 10% higher in weekend trading. OPEC+ responded with a modest April output increase — but 206,000 barrels per day is tiny compared with the supply that could be disrupted if Hormuz stays closed. At the same time, the AI trade is showing its first real confidence problem of the year: Nvidia beat expectations, yet investors sold the stock and pulled money from technology funds.

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MARKETS | TLDR

• Brent jumps roughly 10% toward $80: Weekend trading priced a much larger Middle East supply shock after tanker owners, oil majors and trading houses suspended shipments through the Strait of Hormuz.
• OPEC+ adds only 206,000 barrels per day: The group agreed to a modest April increase equal to less than 0.2% of global supply, too small to offset a prolonged closure of the world's most important oil route.
• AI fund flows lose momentum: Global equity fund inflows fell to a five-week low as investors grew more cautious about AI capex, competition and the disruptive impact of the technology itself.

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OIL SHOCK

Hormuz Closed. OPEC Added 206,000 Barrels.

OPEC+ agreed Sunday to raise April output by 206,000 barrels per day just as the U.S.-Israeli conflict with Iran disrupted energy flows across the Gulf. The move ends a three-month pause in production increases, but it represents less than 0.2% of global supply.

The scale mismatch is the story. More than 20% of global oil normally moves through the Strait of Hormuz, and tanker owners, oil majors and trading houses suspended shipments after Iran warned vessels away from the waterway. Hundreds of ships were sitting at anchor Sunday, while Brent traded roughly 10% higher near $80 in the over-the-counter market. Analysts warned that a prolonged disruption could push crude toward $100.

That means OPEC's production decision matters less than its ability to physically move barrels. Saudi Arabia and the UAE retain the most spare capacity, but extra production is of limited use if Gulf shipping remains impaired. For markets, Hormuz has become the transmission channel from war to oil, from oil to inflation and from inflation to the Fed.

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AI CONFIDENCE

Nvidia Beat. Investors Pulled Money Anyway.

Global equity fund inflows slowed to $19.75 billion in the week through February 25, the weakest pace in five weeks, as investors became more cautious about the cost and competitive dynamics of AI. Technology funds saw outflows even after Nvidia delivered quarterly results above Wall Street expectations.

The reaction to Nvidia is the important signal. Its shares fell 5.5% after earnings as investors focused on slowing revenue growth and increasingly difficult comparisons, while the Nasdaq dropped 1.2%. The market is no longer asking only whether AI demand is strong. It is asking whether Big Tech's roughly $630 billion capex plans can keep producing enough incremental profit to justify the prices already embedded in AI stocks.

That is a different phase of the trade. Strong results can still fail to move stocks higher when expectations are even stronger. The combination of rising competition from custom chips, enormous infrastructure budgets and tighter supply-chain capacity means selectivity matters more. AI spending remains real; confidence that every beneficiary deserves a premium multiple is becoming less automatic.

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HEADLINES

• Oil traders warn crude could reach $100: Analysts say a prolonged Hormuz disruption could remove millions of barrels per day from the market even after accounting for alternative pipelines and spare OPEC capacity.
• Broadcom targets one million 3D-stacked AI chips by 2027: The company is commercializing advanced stacking technology designed to improve performance and energy efficiency, another sign that AI competition is broadening beyond GPUs.
• Nvidia's earnings no longer guarantee a rally: Revenue and guidance beat expectations, but slowing growth and competition fears pushed Nvidia down 5.5% and pulled the semiconductor index 3.2% lower.
• Money moves toward cash and gold: Money-market funds attracted nearly $20 billion while gold and precious-metals funds drew their strongest inflows since 2022, showing investors were already adding protection before the weekend escalation.
• The Strait of Hormuz becomes the market's main macro variable: Roughly one-fifth of global oil supply passes through the waterway, making the duration of any closure more important for markets than the headline size of the military strikes.

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UPCOMING

• February payrolls arrive March 6: The jobs report will show whether labor-market resilience gives the Fed room to look through an oil shock or whether growth is already softening underneath the geopolitical stress.
• Broadcom reports this week: Custom AI chip demand and networking revenue will provide the next major read on whether hyperscaler spending remains strong despite the post-Nvidia reset in sentiment.
• Marvell reports this week: Data-center revenue and guidance will test whether AI infrastructure demand is broadening beyond the largest semiconductor names.
• Hormuz shipping is the immediate catalyst: Markets will watch whether tanker traffic resumes, because physical movement through the strait matters more for crude than another small change in OPEC production quotas.

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DEEP INSIGTHS

How U.S.-Iran Tensions Could Reshape World Markets

Reuters maps the conflict across oil, currencies, bonds, safe havens and regional equities. The key point is that Hormuz is not merely an energy-market risk: a prolonged closure can transmit directly into global inflation and central-bank expectations.

Global Equity Fund Inflows Cool as AI Concerns Rise

The flow data provides a useful counterweight to headline AI spending. Investors are still allocating to equities, but technology has stopped being an automatic destination. Rising capex, custom-chip competition and slower Nvidia growth are making diversification and selectivity more important.