Key Takeaways
- US Defense Secretary Pete Hegseth confirms a US submarine sank the Iranian warship Iris Dena off the coast of Sri Lanka, marking the first such attack on an enemy vessel since World War II.
- US private payrolls grew by 63,000 in February, exceeding the 50,000 estimate and signaling labor market resilience despite escalating Middle East conflict.
- Nvidia (NVDA) has temporarily closed its Dubai office and shifted staff to remote work, joining Amazon (AMZN) in scaling back regional operations due to safety risks.
- European natural gas prices plunged 16% to €45.66/MWH, providing a brief reprieve from energy volatility even as the ECB warns of long-term inflationary pressures from the war.
- Record 401(k) hardship withdrawals reached 6% in 2025, signaling that American households are under significant financial strain despite steady hiring in sectors like healthcare and construction.
US Military Claims Dominance in 'Operation Epic Fury'
US Defense Secretary Pete Hegseth and General Dan Caine provided a stark update on Operation Epic Fury, declaring that the United States and Israel will have complete control of Iranian skies in under a week. Hegseth confirmed that a US submarine used a torpedo to sink the Iranian warship Iris Dena in international waters, stating that the Iranian military is effectively "toast." The Pentagon chief also revealed that the leader behind an alleged effort to assassinate Donald Trump has been killed during the strikes.
General Dan Caine, Chairman of the Joint Chiefs of Staff, reported that Iran’s command and control structure is "in a bad way" after systematic targeting by CENTCOM. The operation is now shifting from large stand-off strike packages to stand-in precision strikes as US forces begin to expand inland. Despite the progress, Caine cautioned that the operation remains complex and dangerous, with the risk to personnel still high as they assess damage information.
Tech Giants Retreat from Middle East Hubs
The escalating conflict has forced major technology firms to shutter operations in the Gulf. Nvidia (NVDA) announced the temporary closure of its Dubai office, with CEO Jensen Huang citing the safety of the company's 6,000 employees in the region as the top priority. Amazon (AMZN) has similarly instructed corporate staff across the Middle East to work remotely following drone strikes on data centers in the UAE and Bahrain.
In the AI sector, CoreWeave (CRWV) announced a multi-year strategic partnership to power Perplexity’s AI inference workloads using Nvidia (NVDA) GB200 clusters. Meanwhile, OpenAI CEO Sam Altman defended the company's decision to allow the Pentagon to use its tools for classified projects. Altman acknowledged the "fallout" among staff but stood by the choice as the US military increasingly integrates AI into its tactical operations.
Economic Resilience Meets Household Strain
The US labor market showed unexpected strength in February, with ADP Employment Change reporting 63,000 new jobs, well above the 50,000 expected by analysts. Hiring was concentrated in construction and education and health services, though wage growth for job-switchers fell to a record low. In contrast, Canada’s labour productivity fell by 0.1% in the fourth quarter, meeting estimates but highlighting a continued stagnation in output.
Despite the job gains, American workers are showing signs of deep financial distress. A record 6% of workers made hardship withdrawals from their 401(k) plans in 2025, up from 4.8% the previous year. This surge in retirement fund raiding comes as the ECB's Olli Rehn urged "cool heads" regarding the inflationary impact of the Iran conflict, noting it is still too soon to assess the full medium-term consequences for global prices.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.