Author: Deep Tide TechFlow

US Stocks: Confusing Signals, Market Stagnation

On Tuesday, Wall Street was like a confused trader—unsure of whom to believe.

The Dow dipped slightly by 34 points (-0.07%) to close at 47,707 points, the S&P 500 fell by 0.21%, and the Nasdaq was almost flat with a slight increase of 0.01%. The three major indices shuffled back and forth between red and green throughout the day, ultimately closing nearly at the starting point.

Why is the market so conflicted? On Monday, Trump stated that the war was "almost over," causing the market to surge. However, on Tuesday, the White House clarified: there is no escorting in the Strait of Hormuz yet, US military actions are escalating, and the prospects for diplomatic negotiations are limited. This directly countered the optimistic expectations from Monday.

The market initially rebounded on hopes of war de-escalation, but turned around and fell after the White House clarified that there was no resumption of escort in the Strait of Hormuz. Investors switched from the euphoria of "the war is about to end" to anxiety of "the war isn't over at all" in an instant.

Sector performance was extremely polarized: of the 11 sectors in the S&P 500, 9 declined, with the energy sector leading the decline. Energy stocks plummeted due to continued drops in oil prices—even if the war hasn't ended, oil prices are falling, which is a double blow to energy stocks.

Chip stocks emerged as the only bright spot. NVIDIA rose by 1.2%, Micron Technology surged by 3.5%, and Intel increased by 2.6%. The catalyst was TSMC's announcement of strong sales data, proving that chip demand remains robust. Against the backdrop of geopolitical risks, inflation fears, and chaotic oil prices, chip stocks became one of the few certainties in the market.

For the 30 Dow components: 3M rose by 2.39%, leading the gainers, Cisco Systems climbed by 1.84%, and Caterpillar increased by 1.69%. The largest declines were from Boeing, down by 3.20%, Salesforce, down by 1.95%, and Chevron, down by 1.60%.

Year-to-date: the Dow is still in negative territory, with some distance to go before reversing its annual decline.

Oil Prices: Down 15% More, Still 30% Higher Than Pre-War

On Tuesday, oil prices continued to plummet, but the decline began to slow.

Brent crude oil fell sharply by 11.28% to close at $87.80 per barrel. WTI crude oil dropped 11.94% to close at $83.45 per barrel. This marks the second consecutive day of sharp declines—dropping from $120 to $95 on Monday and continuing to fall into the $83-88 range on Tuesday.

The total decline over two days exceeded 30%, but oil prices are still 25-30% higher than pre-war levels. Before the war (February 28), Brent was around $73, while WTI was about $67. Even after two days of sharp declines, oil prices are still approximately $20-25 higher per barrel than pre-war levels.

The catalyst for Tuesday's sharp decline was still Trump's statement in a CBS interview that "the war is basically done." The market chose to believe the president's words rather than the clarifications from other White House officials.

However, shortly after, US Defense Secretary Pete Hegseth poured cold water on the situation. Hegseth stated at a Pentagon briefing that the war would not end until "the enemy is thoroughly and decisively defeated," which will happen according to the American timetable. This means the war could last for weeks or even months.

The Executive Director of the International Energy Agency (IEA), Fatih Birol, issued a statement on Tuesday that IEA member countries would meet to assess current supply security and market conditions. This suggests that the IEA might release strategic oil reserves—if they indeed do, oil prices will drop further.

Saudi Arabia warned of catastrophic consequences. The world's largest oil exporter, Saudi Aramco, warned on Tuesday that if oil flows in the Strait of Hormuz cannot be restored, it would have "catastrophic consequences" for the oil market.

Oil prices are now in a delicate balance: Trump says the war should end → oil prices plummet; the Pentagon says the war isn't over → but the market no longer believes that.

Gold: Soaring by 2.4%, Back Above $5,200

On Tuesday, gold staged a strong rebound.

Gold surged 2.44% to $5,228 per ounce, increasing by $124.70 in a single day. This completely erased Monday's losses and set a new rebound high. Silver performed even more impressively, skyrocketing by 6.25% to $89.81 per ounce, giving a rise that is 2.5 times that of gold.

Why did safe-haven assets soar? There are three reasons:

First, the drop in oil prices from nearly $120 alleviated inflation pressures and revived expectations for Federal Reserve interest rate cuts. Falling oil prices → lower inflation expectations → higher probability of Fed rate cuts → benefiting gold.

Second, the dollar's movement stagnated. The dollar surged on Monday, suppressing gold prices, but its momentum paused on Tuesday, giving gold a breathing opportunity.

Third, geopolitical risks have not truly disappeared. Although Trump stated that the war is about to end, the Pentagon said the war isn’t over, the Strait of Hormuz remains closed, and Saudi Arabia warned of catastrophic consequences—these factors all support safe-haven demand.

Gold has risen about 100% this year, while silver has increased by about 150%. Even with Monday's sharp decline, the long-term trend remains intact.

Cryptocurrency: Bitcoin Breaks $70,000, Then Recovers

On Tuesday, the cryptocurrency market showed steady performance with slight increases.

According to CoinGecko data, the global cryptocurrency market capitalization is approximately $2.46 trillion, with Bitcoin's market share at 56.9%. Bitcoin momentarily broke through $70,000 during Tuesday's trading but then retreated to the $69,000-$69,500 range.

Bitcoin faces strong selling resistance from whales around the $71,500 mark, which has become the main obstacle for short-term gains. If this resistance is broken, the next target is $75,000.

Strategic companies have purchased $1.28 billion worth of Bitcoin, bringing their total holdings to over 738,000 BTC. Institutional funds continue to enter the market, providing bottom support for Bitcoin.

There are potential conditions for short squeezes in Bitcoin: negative funding rates and dominant short positions. Historically, extreme shorting often signals price reversals. If the shorts are forced to cover, Bitcoin could surge rapidly.

Technically: Bitcoin has been oscillating in the $65,000-$75,000 range for more than two weeks. If the war truly ends, oil prices fall, inflation pressures ease, and expectations for Fed rate cuts rise, Bitcoin is expected to break through $75,000; but if the war continues, the market will maintain caution.

Today's Summary: The War Isn't Over, the Market is Deceiving Itself

On March 11, the US-Iran war entered its 12th day, the market is caught in confusing signals and self-deception:

US stocks: the Dow fell slightly by 34 points (-0.07%), the S&P 500 fell by 0.21%, and the Nasdaq rose by 0.01%, with the three indices almost leveling off. The market is torn between Trump's optimistic stance on "the war is about to end" and the White House's clarification on "the Strait of Hormuz hasn't resumed, military actions are escalating" on Tuesday. Chip stocks became the only bright spot, with NVIDIA rising by 1.2%, Micron increasing by 3.5%, while energy stocks led the decline.

Oil prices: Brent crude plummeted by 11.28% to $87.80, and WTI fell by 11.94% to $83.45, with two consecutive days of cumulative declines exceeding 30%. Trump said "the war is basically done," but Defense Secretary Hegseth stated "the war won't end until the enemy is decisively defeated." Oil prices remain 25-30% higher than pre-war levels, and Saudi Arabia warned that a closure of the Strait of Hormuz would have "catastrophic consequences."

Gold: surged by 2.44% to $5,228, and silver skyrocketed by 6.25% to $89.81, completely erasing Monday's losses. The fall in oil prices alleviated inflation pressure, reviving expectations for Fed rate cuts, with strong safe-haven demand remaining.

Cryptocurrency: Bitcoin broke through $70,000 during trading, then fell back to $69,000-$69,500, with a global total market cap of $2.46 trillion. Facing a strong whale-selling resistance at $71,500, institutions bought $1.28 billion worth, creating conditions for a potential short squeeze.

The core contradiction in the market now: Trump says the war should end, the Pentagon says the war isn't over—who should we believe?

Oil prices dropped from $120 to $83, as the market chose to believe the president's words. However, the Strait of Hormuz remains closed, Saudi Arabia warns of disasters, and the Pentagon says the enemy must be decisively defeated—these facts all indicate that the war is far from over.

The market is now betting: that Trump will use diplomatic means to swiftly end the war. If the bet is correct, oil prices will continue to fall below $70, and US stocks will rebound strongly. If the bet is wrong, the war will continue for weeks, oil prices may rise above $100, and the market will crash again.

At least today, one fact has become very clear: the market prefers to believe the president's optimism rather than the Pentagon's reality. How long can this self-deception last? Tomorrow's CPI data may provide an answer.