Author: Deep Tide TechFlow

U.S. Stocks: The Dawn of War's End, Dow Surges 206 Points

On Monday, Wall Street staged an epic reversal.

The Dow soared 206 points (+0.43%) to close at 47,707 points, the S&P 500 jumped 0.83% to 6,796 points, and the Nasdaq surged 1.38% to 22,696 points. This was the first comprehensive rebound since the outbreak of the U.S.-Iran war, and the strongest single-day gain in nearly two weeks.

Why did the market suddenly shift from panic to jubilation? Trump stated on Monday morning that U.S. military actions in Iran could "end very soon," and the Strait of Hormuz was reopening. This statement was like a shot of adrenaline, completely reversing market sentiment.

The Dow once dropped 600 points during the day, then V-shaped reversed, ultimately closing higher. This roller-coaster movement has become the norm this week—markets swinging wildly between "escalation of war" and "end of war."

Sector performance: Chip stocks led the rally. Broadcom and AMD soared over 4.6%, Nvidia rose 2.73%, and Micron Technology also increased over 5%. The technology sector became the main driver of the rebound, as investors bet on the AI narrative again.

Dow's 30 component stocks: Caterpillar soared 3.39% to lead, Nvidia rose 2.73%, and Amgen increased 2.01%. The biggest decliners were Cisco Systems down 3.08%, Boeing down 2.70%, and IBM down 2.08%.

Financial stocks performed weakly, with Wells Fargo continuing to decline. However, energy stocks showed mixed performance—although oil prices plummeted, some energy stocks experienced profit-taking as war premiums faded.

Year-to-date performance: The Dow's annual gain is still negative, but Monday's rebound gives investors a glimpse of a turnaround. If the war truly ends this week, March could become the month of market reversal.

Oil Prices: Plummeting from $120 to $90, the Most Frantic Day in History

On Monday, the oil market experienced a historic and frenzied shake-up.

WTI crude oil soared to $119.48/barrel before the market opened on Sunday, but plummeted to the $95-100 range on Monday. Brent crude also fell sharply from a high of $119 on Sunday, closing around $90 on Monday.

A single-day drop of 25%, the largest single-day decrease since March 2020.

The catalyst for the drop was a discussion at the G7 finance ministers' meeting regarding the release of strategic oil reserves. Although the G7 did not immediately announce specific actions, the market had already priced in this expectation. More importantly, Trump implied the reopening of the Strait of Hormuz, with 20% of the world's oil supply unblocked.

However, oil prices are still 35% higher than pre-war levels. Before the war (February 27), WTI was about $66, and now it has plummeted from $120 but remains in the $90-95 range, roughly representing a 40% increase from before the war. The market is concerned: Is the war really over? Or is it just a temporary ceasefire?

OPEC+’s subtle movements: Saudi Arabia began to cut oil production on Monday, becoming the next Gulf oil producer affected by the Hormuz crisis, following Iraq, Kuwait, and the UAE. Even if the war ends, restoring capacity will take time.

Gold: War Premium Fades, Falls Below $5,100

On Monday, gold plummeted 1.91% to $5,081/ounce, a single-day drop of $92. Silver also fell 1.16% to $83.51.

Why did safe-haven assets fall sharply? Trump sent signals of the end of the war, restoring market risk appetite, leading funds to flow from gold to stocks and cryptocurrencies. A stronger dollar also suppressed gold prices denominated in dollars.

However, gold remains at historically high levels. Gold hit a record high of $5,595 on January 29 this year, and although it has retreated, it is still over 100% higher than a year ago. In the long term, geopolitical risks, inflation pressure, and expectations of the Fed's rate cuts continue to support gold.

The World Gold Council warned: If oil prices continue to soar while U.S. Treasury yields rise simultaneously, gold could face structural pressure. High oil prices elevate inflation expectations, and the Fed may be forced to maintain high interest rates, increasing the opportunity cost of holding gold.

Cryptocurrencies: Bitcoin Holds $67,000, Market Sentiment Cautiously Optimistic

On Monday, the crypto market performed steadily.

Bitcoin was about $67,146, up slightly over 24 hours, with the total global crypto market cap around $2.44 trillion, and Bitcoin’s market share at 56.8%.

Bitcoin's performance on Monday was more stable compared to U.S. stocks. While U.S. stocks experienced a V-shaped reversal, Bitcoin remained fairly stable throughout the day, holding the support level at $67,000. This indicates that crypto market investors’ sensitivity to geopolitical risks is decreasing—the news of war no longer triggers panic selling as it did last week.

The Bitcoin spot ETF had a net inflow of $568 million this week (March 2-6), marking two consecutive weeks of net inflow, reversing the net outflow trend in February. BlackRock transferred 2,200 Bitcoins to Coinbase, worth $149 million, indicating continued institutional capital inflow.

Technically, Bitcoin is still oscillating in the range of $65,000 - $75,000. If the war really ends, oil prices decline, inflation pressure eases, and expectations of the Fed's rate cuts rise, Bitcoin is likely to challenge $75,000 again. However, if the war is just a temporary ceasefire, the market will remain cautious.

According to Polymarket prediction market data, the probability of Bitcoin reaching $75,000 in March is 45.5%, and the probability of reaching $75,000 by the end of the year is 86.5%.

Today's Summary: The Dawn of War's End Ignites a Rebound, But the Market Still Needs Confirmation

On March 10, the U.S.-Iran war entered its 11th day, with the market seeing its first comprehensive rebound:

U.S. stocks: The Dow rose 206 points (+0.43%), S&P 500 up 0.83%, Nasdaq up 1.38%. Chip stocks led the rally, with Broadcom and AMD up over 4.6%, and Nvidia rising 2.73%. The Dow V-shaped reversed after once plummeting 600 points, as investors bet on the end of the war again.

Oil prices: Plummeted from $120 before the market opened on Sunday to the $90-95 range, a daily drop of over 25%, marking the largest drop since March 2020. Trump hinted at the nearing end of military actions, the Strait of Hormuz reopening, and G7 discussions on releasing strategic reserves. However, oil prices are still 35-40% higher than pre-war levels.

Gold: Dropped 1.91% to $5,081, with the war premium fading and risk appetite rising.

Cryptocurrencies: Bitcoin held $67,000, with a global total market cap of $2.44 trillion. The spot ETF had consecutive weeks of net inflow, with institutional capital continuously coming in. Market sentiment is cautiously optimistic.

The market is now only concerned with one question: Is the war really over?

If what Trump said is true, and the Strait of Hormuz fully reopens this week, oil prices will continue to decline to the $70-80 range, U.S. stocks will rebound strongly, and the Dow is expected to return to the 48,000-49,000 point range.

But if this is just a temporary ceasefire, Iran may counterattack at any time, and oil prices will soar again, plunging the market back into panic.

At least for today, one signal is very clear: Investors are betting in advance on the end of the war. The 25% drop in oil prices, the V-shaped reversal in U.S. stocks, and the plunge in gold all indicate that Wall Street believes the worst is over.