Wartime, a boon for Markets? – North American Mid-Week Market Update

• Mid-Week review where we dive into the major developments for North American and global Markets
• North American Stock Markets are bouncing up again after a rough end to February
• Despite ongoing conflicts in the Middle East, risk-sentiment and NA currencies are holding strong

Log in to our mid-week North American Markets overview, where we examine current themes in North America and provide an overview of index and currency performance.

When month-long anxiety gets met with not-so-terrific conditions, it provides an explosive but positive cocktail for Markets.

Since the beginning of 2026, Participants have been targeted by a cloudy mix of pessimistic factors that have hindered progress for risk assets: tariffs and Middle Eastern tensions.

About the former, the initial reaction to the Supreme Court decision to block IEEPA tariffs turned out to be a strict positive for most of the largest exporters, who saw their overall duties reduced to a general 15% – A much better picture compared to the 30% to 50% tariffs against countries like China, India, and Brazil.

This provided an initial kick to Equities over the past week and helped hold their support within their 5-month-long consolidation.

A new, still muted catalyst did start to show its fangs with Private Credit facing threats, outflows, and failures as economists project that we are nearing the peak of the economic cycle. This remains one of the most essential factors to monitor for future Stock Market investing.

About tensions in the Middle East, the US and Israel declared war against the Islamic Republic of Iran, after 47 years of tensions between the two sides.

Ever since the Islamic Revolution in 1979, the Iranian regime pledged "Death to the USA, Death to Israel"; as revolts began in December 2025, a much-weakened approval for the strict regime led to brutal repressions, marking +30,000 casualties among the Iranian population.

Coinciding with the IRGC reaching alerting levels of Uranium enrichment, in the objective to develop Nuclear weapons, and a promise to defend the Iranian population, the US and Israel commenced a striking operation against military and regime targets in Iran.

Iran riposted against Israel, US positions, but also numerous Gulf countries all over the Middle East – Oil has since bounced about 10% - 15%, as supply fears grip the commodity's price.

What happens to the Strait of Hormuz and the evolution of WTI/Brent prices remains a angst factor for Markets.

Nevertheless, ongoing operations in the Middle East have been announced to be advancing well, taking some of the fear out of a prolonged war and helping Market sentiment – the US and Canadian Dollars have exploded to new highs since the beginning of the conflict.

On the sidenote, the Beige Book just got published, with the Fed expressing an increased pace of economic activity – It wouldn't be surprising to see rate cuts delayed further with the latest round of data.

Let's dive right into our Mid-Week North American Markets recap.

Read More:

• Fearless Markets are exploding higher – Dow Jones & US Index Outlook
• Gold (XAU/USD) marks a double top despite Iran conflict – Below $5,000 soon?
• Can Iran fully block the Strait of Hormuz?

Except for the Japanese Stock Market which turned victim of its own dynamics, US Indexes have remained close to their relative highs – Nasdaq is marginally up on the week, while Dow Jones retracted slightly.

Higher-beta Canadian Stocks retreated very slightly.

The US Dollar has exploded to new 2026 highs against most FX majors promptly after the beginning of the conflict.

Profit-taking has emerged just above the January peak, but momentum has since slowed down as sentiment turned around.

As long as the Dollar Index remains within the Key Pivot area, bulls remain in control.

Breaking 98.70 would hint at further downside.

Levels to place on your DXY charts:

Resistance Levels

• 99.40 to 99.50 January Resistance
• War Spike 99.68
• 100.00 to 100.50 Main resistance and Range highs
• 100.376 November highs

Support Levels

• 98.70 to 99.00 Key Pivot
• 98.00 Key Mid-Range Support
• Mid-range Pivot 97.40 to 97.60
• 2025 Lows Major support 96.50 to 97.00

The US Dollar is outperforming all FX Majors since the beginning of the Iran conflict in a general Petrodollar trade.

Explore our recent Dollar Analysis right here.

The Loonie actually exploded higher against all currencies, particularly against European currencies – It will remain an interesting currency to keep in sight for upcoming trading.

EUR/CAD just broke a major 1.60 Support.

USD/CAD is now heading lower after rejecting the upper bound of its descending channel.

Breaking (and closing below) 1.36250 to the downside would hint at a swift retest of the 1.3550 Support.

Levels of interest for USD/CAD:

Resistance Levels

• 1.3750 Pivotal Resistance (Channel top)
• 1.3770 to 1.38 Key Resistance
• Major Resistance 1.3870 to 1.39 (January highs)

Support Levels

• 1.3630 to 1.3660 Mid-Range Pivot
• 1.3550 Main 2025 Support
• October 2024 Support 1.3450 to 1.35
• 1.3480 USD-Crash lows

The North American calendar towards next Wednesday will be heavy, particularly for US data – Friday will see the release of a Non-Farm Payrolls and Retail Sales combo, while next Tuesday will focus on US CPI.

And as always, keep a close eye on Middle East Developments.

Safe Trades!

Follow Elior on Twitter/X for Additional Market News, interactions and Insights @EliorManier