Good morning. On Fortune’s radar today:
- Trump has no good options in war with Iran.
- Markets are pricing in an end to the conflict.
- U.S. job market grinds to a halt.
- Exclusive: AI will cause 31% dip in phone sales, analyst says.
- Anthropic source code leaks.
- The Fed’s Powell is not a dove.
THE MARKETS
Traders want the war to end
Oil fell below $100 this morning. S&P 500 futures were up 0.45% prior to the open in New York after a huge day in the markets yesterday: The index rose 2.9% on Tuesday, recovering about 30% of its drawdown since the war began. The Nasdaq rose 795 points, recovering nearly half of its total decline in a single day. The Dow soared 1,125 points. All three indexes had their biggest single-day gains since May. The joy continued in Asia and Europe today, where markets rose strongly across the board—every single one of them more than a point higher.
- Reality check: The S&P is still down 4.63% year-to-date.
- The ‘Walmart recession indicator’ just hit its highest point since 2008, Fortune's Jake Angelo reports.
In Q1, almost all asset classes declined aside from oil and oil-linked commodities, according to Deutsche Bank:
ONE BIG THING
U.S. job market is now as bad as it was during COVID
Americans aren’t getting laid off. And they’re not quitting. They’re simply not getting hired. And the numbers haven’t been this bad since the pandemic closed the economy by force, writes Fortune’s Eva Roytburg. The Bureau of Labor Statistics reported Tuesday the hiring rate fell to 3.1% in February, with just 4.8 million hires, the lowest since April 2020. Everyone, it seems, is staying put, whether in their jobs or in unemployment. “It’s a brutal job market,” Heather Long, chief economist at Navy Federal Credit Union, said. “To see that 3.1% hiring rate, the lowest since April 2020, when the economy was closed down literally during COVID—it just underscores how little hiring is going on.”
- Yikes: The job numbers are from February—before the war started.
IRAN
Trump teases an end to the conflict with Iran
President Trump will give a speech to the nation at 9 p.m. EST this evening “to provide an important update on Iran,” the White House said. The speech will follow a confusing set of messages issued by the Trump administration yesterday on whether it was preparing to wind down its war in the Persian Gulf.
On Tuesday, Trump said the war could end in “two or three weeks” even if it meant leaving without a peace deal and abandoning the Strait of Hormuz to Iran’s control. “Go get your own oil!” the president chided his allies on Truth Social.
- However: War Secretary Pete Hegseth declined to rule out boots on the ground.
Giving up the Strait of Hormuz could haunt the U.S. for decades
Any U.S. disengagement that cedes control of the strait risks creating new problems, including potentially triggering a nuclear arms race among Gulf states, experts say. But taking control of the strait militarily requires massive costs and risks, including an invasion that comes short of occupying Iran, Fortune’s Jordan Blum says. “If this goes on for another two months, we’re in a global recession. There’s no way around it,” Jim Wicklund, a veteran oil analyst and managing director at the PPHB energy investment firm, told Fortune, due to a credit crash and sky-high inflation.
Bob McNally, former White House energy advisor under George W. Bush and founder of Rapidan Energy Group, took it a step further: “That would be a catastrophic setback for U.S. foreign policy interests that would, in my view, transcend even our defeat in Vietnam,” he told Fortune. “One would struggle to find a precedent or a parallel for what a defeat that would be.”
- “The Arab Gulf countries and Israel would not accept Iran’s long-term domination of Hormuz. I think it would make another conflict just a matter of time. And it’s a conflict the United States would likely get dragged [back] into,” McNally said.
- Iran’s Islamic Revolutionary Guard Corps warned staff at major U.S. tech companies in the Middle East, including Apple, Microsoft and Google, that it would begin targeting their offices at 8 p.m. local time, per The Hill.
Trump has no good options—here are 5 of them
If Trump wants to use assault troops on the ground in Iran he has three options, according to Macquarie analysts Thierry Wizman and Gareth Berry. They are:
- Seize Kharg Island, through which 90% of Iran's crude oil flows.
- Seize Qeshm Island, where Iran hides its anti-ship missiles and mines.
- Seize “Iran's stock of enriched uranium, if sufficiently concentrated and locatable.”
“The most operationally feasible one would be seizing Qeshm Island,” they say.
Two more options arrived on Trump's desk in the last 24 hours:
- Peace plan? China and Pakistan have a plan that calls for a ceasefire and a reopening of the strait, Axios reports.
- War plan? Iran’s control of the strait is intolerable to the United Arab Emirates and the nation is willing to join the war to keep it open, the Wall Street Journal says.
PHONING IT IN
Exclusive: 31% dip in phone sales coming as AI drives up prices, analyst says
The number of smartphone shipments over the next year could potentially decline by 31% globally, as the cost of memory chips, driven up by demand from AI hyperscalers, is passed on to consumers, according to an analyst for Jefferies. Edison Lee, the bank's China Head of Tech & Apple, told colleagues that demand for memory chips from companies making servers has driven price rises of 70%-plus, quarter on quarter, and that could go up another 50% in Q2 2026, according to a note seen by Fortune. “Post AI demand surge, servers are now 60-70% of offtake of memory chips vs. 30% earlier,” said the note, written by Jefferies SVP Sonali Salgaonkar and her team. “Global smartphone shipment volume could dip by -31%YoY in next 12M (affordability hit),” the note said. Other analysts have less extreme forecasts but are still calling for double-digit declines.
STOCK, CARS
John Malone’s $18 million bet on Formula 1
John Malone, the billionaire behind Liberty Media Corp., is buying the dip and waiting it out, Fortune’s Amanda Gerut noticed. Malone sold over-the-counter put options on 250,000 shares of Liberty Formula One stock, and raked in $1.28 million. The strike price was $71.75 per share. If exercised, Malone would have to buy all 250,000 shares at that price—a commitment valued at about $18 million. The options expire in March 2027.
By selling the puts rather than buying shares, he collects cash right now while also signaling he'd be fine owning more Formula 1 stock in the future. Malone controls 50% of Liberty’s voting power, making him a dominant force behind Formula 1's corporate parent.
CHART OF THE DAY
Powell ain’t no dove, sentimentally speaking
Bond prices perked up this week after Fed chair Jerome Powell said that oil price inflation from the Iran war wasn’t yet priced into the economy. Traders concluded Powell was more dovish on inflation than previously thought. But Macquarie’s Thierry Wizman and Gareth Berry argued in a recent note that the tone—or “sentiment”—of the Fed is as hawkish as ever. “The natural language processing models used by Bloomberg to measure the hawkish/dovish tone in Fed communications indicate that the Fed turned more hawkish at the start of 2026 and stayed more hawkish into end-March,” the pair said.
NUMBER OF THE DAY
7%
97% of households do not pay for AI apps but among those who do, 7% pay more than $100 per month, according to Bank of America Institute’s Liz Everett Krisberg and David Michael Tinsley.
MORE FROM FORTUNE
Sheryl Sandberg tapped a 25-year-old to run Lean In. Here’s her plan to close the AI gender gap - Jacqueline Munis
Former BP CEO takes over Wyoming data center developer, as first woman leader of Big Oil giant becomes new BP chief - Jordan Blum
Credit card delinquencies among millennials and Gen Z have soared because of sports betting—even in states where it’s illegal, new Fed study finds - Sasha Rogelberg
Liking corporate BS may be a sign you’re bad at decision-making, Cornell expert finds - Jacqueline Munis
More parents are done pushing college. 1 in 3 are now betting on trade school instead - Sydney Lake
THE FRONT PAGES TODAY
Artemis II launch: crowds gather for glimpse of historic Nasa moon mission - The Guardian
Strategy is entering its desperate stretch - FT
Oracle cutting thousands in latest layoff round as company continues to ramp AI spending - CNBC
Jamie Dimon defends Iran war as overdue - Axios
Ukraine Is Having a Surprisingly Good Iran War - Bloomberg
ONE MORE THING
Anthropic source code leaks
Anthropic accidentally leaked the source code for its popular coding tool Claude Code, Fortune’s Bea Nolan reports. The leak comes just days after Fortune reported that the company had inadvertently made close to 3,000 files publicly available, including a draft blog post that detailed a powerful upcoming model that presents unprecedented cybersecurity risks. The source code leak exposed around 500,000 lines of code. The latest data leak is potentially more damaging than the earlier one because it could allow rivals to reverse engineer aspects of Anthropic’s models.
