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- 💥 The US Strikes Iran. Here's What To Expect in the Stock Market (US)
💥 The US Strikes Iran. Here's What To Expect in the Stock Market (US)
Plus, OpenAI Raises $110B, Netflix jumps 25% after losing Warner Bros acqusition bid, and more...
Maxwell Nicholson
March 01, 2026
TOP STORY
🪖 The US Strikes Iran. Here's What To Expect in the Stock Market
🪖 Nvidia’s earnings (covered in detail on Thursday) were supposed to be the big story of the week… but that changed yesterday when the US military conducted joint missile strikes with Israel to topple the current regime in Iran.
💀 In less than a day, Iran’s Supreme Leader and other members of the regime were killed, with Trump announcing that strikes will continue “for as long as necessary.”
🎯 The main justification for the attack was to stop Iran from developing nuclear weapons, which, according to Trump, the country wasn’t willing to do. In response to the strikes, Iran launched waves of ballistic missiles and drones targeting Israel and U.S. bases across the Middle East (including striking the Fairmont in Dubai).
🛢️ While the markets closed before the Saturday attack (meaning we won’t see the market’s reaction until Monday), Oil prices reflected the potential conflict, with Brent Crude (the global standard) rising +2.45% on Friday in anticipation (it’s highest price since July).
😥 Obviously, war has a massive human cost, and I don’t mean to downplay the tragedy by jumping directly into market impact, but since this is an investing newsletter, I’ll leave the politics and human impact to the other commentators and focus on what the war means for the stock market…
😰 Risk Of “Guaranteed Global Recession”
🛳️ Iran is the world’s fourth-largest oil producer globally and shares a coast with the Strait of Hormuz, a waterway that accounts for roughly 20-30% of the world’s total oil trade.
📢 According to former White House advisor Bob McNally, a potential blockage of this strait, likely as a retaliatory measure by Iran, would result in oil prices spiking from $72 to $100 a barrel. And if prolonged, would result in “a guaranteed global recession.”
💬 Even just the prospect of a smaller conflict in the region is expected to make prices jump $5-10 a barrel on fear alone.
😰 According to John Briggs, the head of US rates strategy at Natixis, the “scale of the attacks and Iranian retaliation is larger than what the market expected,” and traders will be adopting a “haven first, ask questions later” approach.
📉 This is bad for stocks since investor anxiety and fear typically drives money managers to sell equities and flee to safe-haven assets like Treasuries and Gold.
⚠️ All this means we’ll likely see a stock market dip on Monday, leading Strategists at Barclays to warn against buying the dip, saying:
“Investors have grown accustomed to geopolitical flare-ups that fade fast, but this episode risks lasting longer. The risk-reward doesn’t seem compelling,” he said. “If equities pull back enough (say over 10% in the S&P 500), there is likely to come a time to buy. But not yet.”
👎 But many others disagree with Ajay, with the Head of Macro Research for Charles Schwab, saying:
“If this conflict has no meaningful downstream impacts on growth or earnings, any negative stock market response has the potential to be short-lived.”
🚨 But in any case, exercise caution on Monday and understand that if you’re buying the dip, you're basically making a bet that the conflict (and market impact) will be short-lived. You could be right, but the move is not without risk!
🤖 Outside of the war, there was actually a lot of other big stories in the world of AI + a massive update in the Netflix bid to buy Paramount, so let’s shift gears to the other big news this week…
😎 But first, a word from our sponsor this week Public!
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IN THE WORLD OF AI
🤖 AI Winners and Losers and February’s ‘Panic Rotation’
📊 Outside of the war, there was also a lot going on with AI this week… both good and bad.
🔴 The Bad
📉 On Wednesday, Nvidia ($NVDA) reported blockbuster earnings (which I covered in detail here), but the stock dropped anyway, ending the week down 8% and erasing all its gains so far this year.
⏰ Part of the drop is likely due to Nvidia’s massive exposure to 5 Hyperscalers (Microsoft, Meta, Amazon, Google, and Oracle), which make up 50% of Nvidia’s revenue. Many of these stocks had a rough month as investors grow increasingly impatient on a ‘return on investment’ from the massive AI spending.
🤖 This is reflected in the stock prices across Big Tech, with the MAGS ETF (tracking the Mag 7 Hyperscalers) falling roughly 7% in February.
😰 This drove the S&P 500’s and Nasdaq-100s worst monthly performance since last March. Across the indexes:
The S&P 500 fell 1.4%
The Nasdaq-100 fell 3%
🍁 Meanwhile, the Financials and Energy-heavy TSX index rose 7.6%
🟢 The Good
💰 But it wasn’t all bad… one of the biggest concerns lately has been OpenAI (which is wrapped up in a web of circular deals with players like Nvidia) potentially running out of money to meet its massive spending commitments.
🏦 Well this week, OpenAI raised a record-breaking $110 billion in new funding from Amazon ($AMZN), Nvidia, and SoftBank, valuing the company at $730 billion and easing concerns about its ability to meet its big promises (at least for now).
🏆 Outside of OpenAI, there were also some standout AI winners this week:
🖥️ Dell ($DELL) surged over 20% after reporting 39% revenue growth and forecasting its AI server business will double to $50 billion in fiscal 2027
💳 And Block ($XYZ) (owner of Cash App and Square) jumped nearly 17% after announcing a 40% workforce cut, and restructuring around an “AI-first operating model.”
🤔 It begs the question, if AI is doomed as some say, why are some stocks with AI stories rising while the “premier AI trade” (i.e. Nvidia and the Mag 7) falls?
🔄 Well, analysts are calling this a “panic rotation” where investors are simply relocating their money from the Mag 7 and broader tech due to spending uncertainty. In other words, moving their capital into more defensive sectors and companies with clearer growth stories.
📈 This can be seen based on this month’s sector performance, with tech falling as Utilities and Energy soar:
🔍 Overall, investors don’t seem to be turning a blind eye to AI (or the stock market for that matter), but they’re now turning to new sectors and looking for new AI growth stories like Dell or Block.
🎬 And speaking of growth stories, one popular stock was flying high this week. A small streaming company called Netflix… but before we dive into our final story of the week, a quick word from our other sponsor this week Fiscal AI!
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ACQUISITION DRAMA
🎬 Netflix Soars 25% After Losing Warner Acquisition Bid to Paramount
⚔️ After a months-long battle, Paramount Skydance ($PSKY) has officially emerged victorious over Netflix ($NFLX) in the bid to purchase Warner Bros. ($WBD).
📋 On Thursday, the Warner Bros. board said Paramount has a “superior offer” to Netflix, and gave Netflix 4 days to come up with a better one. Netflix quickly declined to raise its bid, leaving Paramount with the winning deal.
💰 The two companies (Paramount and Warner Bros.) expect to close the merger by the third quarter of 2026 and will pay Netflix a $2.8 billion breakup fee.
📈 📉 On the news, Netflix shares rose 14%, Paramount rose 20%, and Warner Bros. fell 2% with Netflix ending the week up 25%
😰 The Looming $100 Billion Debt Load
🏷️ Paramount’s offer is a $111 billion cash buyout, or $31 per share for Warner Bros. shareholders. This includes all of the company’s assets, in comparison to Netflix’s $23.25 in cash and $4.50 in Netflix stock ($28 per share total), which only included IP and streaming assets.
🏗️ About $47 billion of the deal is financed with equity from the Ellison family trust and RedBird Capital, while the remaining $57 billion is with debt.
⚠️ But while investors seem excited about the future, some analysts say the debt is a big worry, with the combined entity expected to be left with over $100 billion in debt:
“Overpaying for WBD to accelerate growth is perhaps better than facing a mediocre standalone trajectory. At least this gives [Paramount] a shot at greatness, in our view. But we do not expect them to come out swinging too hard. Before they can invest in growth, they’ll need to cut deep and fast, and allocate most of their [free cash flow] to interest expense and de-levering.”
📅 Overall, this deal will be one of the largest corporate buyouts ever and would leave the combined company with a debt that would take roughly 22 years to pay off, assuming every dollar is spent towards debt repayments.
🎯 On the business front, Paramount is expected to pull some IP strings and create a real viable competitor to Netflix through a new combined streaming platform. Though there are a lot of ifs, and time will tell whether overpaying for a debt-ridden movie studio and declining cable networks was the best bet.
🏆 A “Win-Win-Win”
😌 Despite the idea that Netflix “missed out on a once-in-a-lifetime opportunity,” the co-CEOs of Netflix issued a statement saying they don’t feel bad about the outcome, and that this development won’t change the fact that Netflix is still stronger than ever:
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price. We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”
💵 For Netflix, walking away means preserving capital for content spending and future growth rather than taking on tens of billions in debt on top of a bidding war it was losing.
🎬 And for Paramount, it gets a leading streaming platform (HBO Max), movie studio, quality IP, and two dozen cable networks… even if the price tag was a bit steep.
💬 To join the discussion on Blossom, make sure to check out @jacobb’s great post on the topic here!
FROM THE BLOSSOM COMMUNITY
⭐️ Top Discussions of the Week
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