Author: Deep Tide TechFlow
US Stocks: Mixed Signals, Market Stagnates
On Tuesday, Wall Street was like a confused trader—unsure of whom to believe.
The Dow fell slightly by 34 points (-0.07%) to close at 47,707 points, the S&P 500 dropped 0.21%, and the Nasdaq was almost flat with a marginal gain of 0.01%. The three major indices fluctuated between gains and losses throughout the day, ultimately ending almost where they started.
Why is the market so conflicted? On Monday, Trump said the war was "almost over," and the market surged. But on Tuesday, the White House clarified: The Strait of Hormuz has not yet begun escort operations, US military actions are escalating, and diplomatic negotiations have limited prospects. This directly contradicted Monday's optimistic expectations.
The market initially rebounded on hopes of war de-escalation but then turned lower after the White House clarified that the Strait of Hormuz had not resumed escort operations. Investors quickly switched from the euphoria of "the war is ending" to the anxiety of "the war isn't over at all."
Sector performance was highly divergent: Among the 11 sectors of the S&P 500, nine declined, with the energy sector leading the losses. Energy stocks plummeted because oil prices continued to fall—even though the war isn't over, oil prices are still dropping, which is a double blow for energy stocks.
Chip stocks were the only bright spot. Nvidia rose 1.2%, Micron Technology surged 3.5%, and Intel gained 2.6%. The catalyst was strong sales data from TSMC, proving that chip demand remains robust. Amid geopolitical risks, inflation fears, and oil price volatility, chip stocks have become one of the market's few certainties.
Dow 30 components: 3M led gains with a 2.39% rise, Cisco Systems rose 1.84%, and Caterpillar gained 1.69%. The biggest decliners were Boeing, down 3.20%, Salesforce, down 1.95%, and Chevron, down 1.60%.
Year-to-date: The Dow is still in the red, with some distance to go before reversing its annual losses.
Oil Prices: Another 15% Drop, But Still 30% Higher Than Pre-War Levels
On Tuesday, oil prices continued to plummet, but the pace of decline began to slow.
Brent crude plunged 11.28% to close at $87.80 per barrel. WTI crude plummeted 11.94% to settle at $83.45 per barrel. This marked the second consecutive day of sharp declines—Monday's drop from $120 to $95, followed by Tuesday's further decline to the $83–$88 range.
The cumulative two-day drop exceeded 30%, but prices remain 25–30% higher than pre-war levels. Pre-war (February 28), Brent was around $73, and WTI was around $67. Even after two days of steep declines, oil prices are still about $20–$25 per barrel higher than pre-war levels.
The catalyst for Tuesday's plunge was again Trump's statement in a CBS interview that the war was "basically done." The market chose to believe the president's words over clarifications from other White House officials.
However, US Defense Secretary Pete Hegseth later poured cold water on this optimism. Hegseth stated at a Pentagon briefing that the war would not end until "the enemy is thoroughly and decisively defeated," which would proceed on America's timeline. This suggests the war could last for weeks or even months.
International Energy Agency (IEA) Executive Director Fatih Birol issued a statement on Tuesday, noting that IEA member countries would meet to assess current supply security and market conditions. This hints that the IEA might release strategic petroleum reserves—if it does, oil prices could fall further.
Saudi Arabia warned of catastrophic consequences. Saudi Aramco, the world's largest oil exporter, cautioned on Tuesday that if oil flows through the Strait of Hormuz cannot resume, it would have "catastrophic consequences" for the oil market.
Oil prices are now in a delicate balance: Trump says the war is ending → oil prices plummet; the Pentagon says the war isn't over → but the market no longer believes it.
Gold: Surges 2.4%, Back Above $5,200
On Tuesday, gold staged a strong rebound.
Gold surged 2.44% to $5,228 per ounce, gaining $124.70 in a single day. This completely erased Monday's losses and set a new rebound high. Silver performed even more impressively, soaring 6.25% to $89.81 per ounce, with gains 2.5 times those of gold.
Why did safe-haven assets surge? There are three reasons:
First, oil prices plummeted from nearly $120, easing inflationary pressures and boosting expectations for Fed rate cuts. Lower oil prices → lower inflation expectations → higher probability of Fed rate cuts → gold benefits.
Second, the US dollar's rally stalled. The dollar's surge on Monday suppressed gold, but its momentum paused on Tuesday, giving gold a breather.
Third, geopolitical risks haven't truly disappeared. Although Trump said the war is ending, the Pentagon says it isn't, the Strait of Hormuz remains closed, and Saudi Arabia warns of catastrophic consequences—all of which support safe-haven demand.
Gold has risen about 100% year-to-date, and silver has gained about 150%. Even after Monday's plunge, the long-term trend remains intact.
Cryptocurrencies: Bitcoin Breaks $70,000 but Pulls Back
On Tuesday, the crypto market performed steadily with slight gains.
According to CoinGecko data, the global crypto market cap is approximately $2.46 trillion, with Bitcoin's dominance at 56.9%. Bitcoin briefly broke above $70,000 during Tuesday's session but later retreated to the $69,000–$69,500 range.
Bitcoin faces resistance from whale sell orders near $71,500, which is the main obstacle to short-term gains. If this resistance level is breached, the next target is $75,000.
Strategy firms purchased $1.28 billion worth of Bitcoin, bringing their total holdings to over 738,000 BTC. Institutional funds continue to enter the market, providing a floor for Bitcoin.
Bitcoin shows conditions for a potential short squeeze: negative funding rates and dominant short positions. Historically, extreme shorting often precedes price reversals. If shorts are forced to cover, Bitcoin could surge rapidly.
Technical outlook: Bitcoin has been oscillating in the $65,000–$75,000 range for over two weeks. If the war truly ends, oil prices fall, inflationary pressures ease, and Fed rate cut expectations rise, Bitcoin could break above $75,000. But if the war persists, the market will remain cautious.
Today's Summary: The War Isn't Over, the Market Is in Self-Delusion
March 11, the 12th day of the US-Iran war, and the market is mired in conflicting signals and self-delusion:
US Stocks: The Dow fell slightly by 34 points (-0.07%), the S&P 500 dropped 0.21%, and the Nasdaq edged up 0.01%, with all three indices nearly flat. The market is torn between Monday's optimism from Trump's "war is ending" and Tuesday's reality from the White House: "Hormuz not restored, military actions escalating." Chip stocks were the only bright spot, with Nvidia up 1.2% and Micron up 3.5%, while energy stocks led the declines.
Oil Prices: Brent crude plunged 11.28% to $87.80, and WTI plummeted 11.94% to $83.45, marking a cumulative two-day drop of over 30%. Trump said the war is "basically done," but Defense Secretary Hegseth stated, "The war won't end until the enemy is彻底 defeated." Oil prices are still 25–30% higher than pre-war levels, and Saudi Arabia warns that closing the Strait of Hormuz would have "catastrophic consequences."
Gold: Surged 2.44% to $5,228, and silver soared 6.25% to $89.81, completely erasing Monday's losses. Plummeting oil prices eased inflationary pressures, boosting Fed rate cut expectations, while safe-haven demand remains strong.
Cryptocurrencies: Bitcoin broke above $70,000 during the session but retreated to $69,000–$69,500, with a global market cap of $2.46 trillion. It faces resistance from whale sell orders at $71,500, institutions bought $1.28 billion, and conditions for a potential short squeeze are forming.
The core market contradiction now: Trump says the war is ending, the Pentagon says it isn't—whom to believe?
Oil prices plummeted from $120 to $83, and the market chose to believe the president. But the Strait of Hormuz remains closed, Saudi Arabia warns of disaster, and the Pentagon vows to彻底 defeat the enemy—all these facts point to the war being far from over.
The market is now betting that Trump will use diplomacy to end the war quickly. If the bet pays off, oil prices will continue to fall below $70, and US stocks will rebound strongly. If the bet fails and the war drags on for weeks, oil prices could return above $100, and the market could crash again.
At least for today, one thing is very clear: The market would rather believe the president's optimism than the Pentagon's reality. How long can this self-delusion last? Tomorrow's CPI data might provide the answer.
