Just watched the markets do that classic bounce-back thing after getting spooked this morning. S&P 500 ended up +0.07%, Nasdaq +0.44%, though the Dow dipped slightly to -0.06%. Initial selloff hit hard when news broke about US and Israel launching joint military operations against Iran, but buyers came in on the dip and we saw a solid market rebound by close.

The geopolitical situation is pretty wild right now. Trump's talking about combat operations potentially stretching weeks, while Iran's security chief is basically saying negotiations aren't happening. That kind of uncertainty typically tanks stocks, but what's interesting is how quickly sentiment shifted today.

A few things drove the market rebound. First, the Feb ISM manufacturing index came in stronger than expected at 52.4 versus forecasts of 51.5. That gave some confidence to the bulls. Second, dip buying kicked in hard - people saw the pullback as an opportunity rather than a sign to panic sell.

Now here's where it gets complicated. Oil is absolutely exploding. WTI crude surged over 65% to hit an 8.25-month high because tanker traffic through the Strait of Hormuz basically stopped after Iran attacked three oil tankers. Iran pumps about 3.3 million barrels per day, roughly 3% of global output, but its strategic location makes this a big deal. Goldman Sachs is pricing in an $18/barrel risk premium assuming a six-week full halt to traffic through the strait.

The inflation implications are serious. Bond yields initially fell on safe-haven demand but reversed hard. The 10-year yield jumped 10 basis points to 4.04% as traders started pricing in that crude spike could push inflation higher. The Feb ISM prices paid index exploded to 70.5, a 3.5-year high, way above the 60.0 forecast. That sticky inflation signal is making the Fed's rate-cut odds look pretty slim - markets are only pricing a 2% chance of a 25 basis point cut at the March 17-18 meeting.

Sector rotation was dramatic. Defense stocks absolutely crushed it with the geopolitical risk premium - Aerovironment up 12%, Northrop Grumman and RTX up over 4% each. Energy was another obvious winner, with Marathon Petroleum, ConocoPhillips, and Devon Energy all rallying 3%+ on that crude surge.

Meanwhile, chipmakers got hammered. Seagate down over 5%, AMD, Western Digital, and ARM all down 3%+. That's the flip side of risk-off sentiment in tech. Airlines also took it on the chin - higher jet fuel costs are brutal for margins, so American, United, Delta all fell 2-3%.

Crypto-exposed stocks had an interesting day. Bitcoin's up over 6%, which pulled in the crypto plays - Marathon Digital and MicroStrategy leading Nasdaq gainers with +8% and +7% respectively. Coinbase and Galaxy Digital also rallied over 4%.

Week ahead is packed. ADP employment data Wednesday, ISM services, Fed Beige Book, then jobless claims and nonfarm payrolls Friday. Earnings season is basically done with over 90% of S&P 500 companies reported - 74% beat estimates, which has been a solid support for the market rebound momentum.

Bottom line: today showed how quickly sentiment can shift. Initial panic sell became a dip-buy opportunity, but the underlying geopolitical risk and inflation concerns are real. The market rebound feels more like a relief bounce than a full risk-on reversal. Keep watching oil prices and headline news out of the Middle East - that's the variable that could change everything.