Author: Shenchao TechFlow

U.S. Stocks: Wall Street has learned to dance amid the gunfire

On Wednesday, U.S. stocks completed a second rebound this week.

The Dow Jones rose 305 points (+0.66%) to close at 46,429, the S&P 500 rose 0.54% to close at 6,591, and the Nasdaq rose 0.77% to close at 21,929. The impetus still came from the 15-point ceasefire proposal; The New York Times revealed that the U.S. submitted a ceasefire plan to Iran via Pakistan, and the market immediately rushed to buy, causing oil prices to fall and all sectors (except energy) to rise together.

However, the foundation of this surge is built on sand.

On the same day U.S. stocks were rising, Iranian state media explicitly stated: they rejected the U.S. ceasefire proposal. Iran immediately presented its own five-point counterproposal, one of which directly pierced the market's fantasy, demanding the U.S. acknowledge Iran's sovereign control over the Strait of Hormuz. This declares that the endpoint of the war is much farther than the market had anticipated.

Meanwhile, Iran continued its attacks on Israel and Gulf countries, with Kuwait International Airport suffering a drone strike that ignited a major fire. The U.S. military simultaneously increased troops in the Middle East, deploying the 82nd Airborne Division and more Marines.

Thus, Wall Street on Wednesday staged an absurd drama: Iran is at war while the market is rising.

This sense of disconnection precisely illustrates the current logic of market operation: investors no longer attempt to judge the direction of war; they only chase the breath of each temperature rise in the "ceasefire narrative." As long as ceasefire news circulates, the stock market can rise. Once the news fades, the stock market will fall. Back and forth, that's all.

On the sector level, Wednesday's formations were relatively orderly; improved ceasefire expectations improved interest rate prospects, causing bond yields to fall along with oil prices, benefiting interest rate-sensitive assets collectively. Financials, industrials, and consumer discretionary led, while the energy sector faced pressure due to falling oil prices.

On the individual stock level, two lines are worth noting.

First, On Holding (On) plummeted by 11.6%, with CEO Martin Hoffmann announcing his resignation. This company, which sells premium Swiss running shoes, found its luxury logic completely failing in a market shrouded by the shadow of war.

Second, JetBlue soared about 18%, with Semafor reporting that the airline was consulting with advisors to explore a potential merger with competitors, igniting a short-covering rally. Alphabet and Meta's stock prices remained basically stable after the "social media addiction" jury ruled (ordering both to jointly pay $3 million), with the former slipping 0.2% and the latter rising 0.3%—the market believes the direct impact of this lawsuit is limited.

From a technical perspective, the S&P 500 remains below the 200-day moving average (about 6,624) near 6,600. Wednesday's slight rebound brought the S&P back to 6,591, just a step away from reclaiming the moving average, but it has never succeeded in crossing it. This line is the key threshold for measuring a true restoration of market confidence; without breaking above it, the quality of the rebound remains questionable.

Oil Prices and Gold: The $100 mark has become a new battlefield, gold is quietly recovering

Oil Prices: The sovereignty card of Hormuz makes the end of $100 oil distant

WTI crude closed at $90.32 per barrel, down 2.2%; Brent crude closed at $102.22, down 2.17%.

This price level is intriguing. Brent just dipped below $100 and then bounced back, as if this line has gravity. Over the past month, Brent has violently oscillated between $99 and $112; each ceasefire news brought it below $100, while each escalation in hostilities pushed it back above $110. The current $102 reflects a market equilibrium pricing between "fighting and negotiating."

But once Iran's counter five-point proposal was thrown in, this equilibrium could be broken at any moment. Iran is not seeking a ceasefire, but rather to exchange a ceasefire for long-term control over Hormuz. This means that even if some form of framework agreement is signed in the future, the geopolitical risk premium over Hormuz will not disappear. The "war premium" in oil prices may remain in a more lasting and institutionalized form in the market.

Gold: The broken oil price chain is oxygen for gold

Gold surged strongly on Wednesday to about $4,547 per ounce, continuing Tuesday's upward momentum.

The logic is a chain: falling oil prices → cooling inflation expectations → declining U.S. bond yields → softening dollar → relieving pressure on gold → restarting bullish logic. Meanwhile, improved ceasefire negotiation expectations increased the likelihood of future rate cuts, adding fuel to gold.

Silver also moved higher, and the gold-silver ratio began to revert to normal. In recent weeks, silver had fallen more sharply than gold under the pressure of oil prices, and the current recovery is the market saying: the most panic phase may have passed.

Cryptocurrency: Bitcoin surged to $71,600, continuous net inflow into ETFs has become the new narrative axis

On Wednesday, the cryptocurrency market welcomed one of the most refreshing trading days in recent weeks.

Bitcoin reached a high of $71,669 during the day, with an increase of over 1.5%, firmly standing above the psychological level of $70,000. Ethereum followed suit, and overall market sentiment began to slightly recover from last week's extreme panic (25) towards neutrality.

The logic chain of this wave is consistent with the past two days: falling oil prices → cooling inflation expectations → market reigniting expectations for rate cuts → risk assets benefiting overall → Bitcoin, as an amplifier of risk premium, gained excess returns.

On the institutional side, ETF fund flow is currently the most worth tracking variable. Bernstein announced a week ago that "the bottom is already visible" and pointed out that the net outflow from cash ETFs has reversed into continuous net inflow. The strategy remains unchanged and continues to be the largest long-term buyer cushion in the market. Together, these two aspects form a "institutional floor" for Bitcoin around $70,000.

Last week’s devastating incident in the cryptocurrency market involving Circle (CRCL) has seen new developments: the "Stablecoin Transparency Act" regarding the "prohibition of platforms providing yield for stablecoins" clause has sparked intense debate within Congress, with significant uncertainty surrounding both the timing and final text of the bill. Coinbase is also waiting for the outcome of this legislative tug-of-war. The market tends to believe that the final version will find some compromise between "bank interests" and "cryptocurrency innovation"—but until the outcome is settled, this is a hanging knife.

The core technical test level Bitcoin is now facing is $75,000. Breaking through here means that the decline in March is officially classified as an "excessive correction caused by the war shock"; failing to maintain $70,000 poses a severe challenge to the market's rebound narrative.

Today's Summary: Iran refused the 15-point proposal, yet the market rose—how long can this pricing logic hold?

On March 26 (Thursday), the market is digesting a highly contradictory signal:

U.S. Stocks: On Wednesday, the Dow rose 305 points to close at 46,429, the S&P rose 0.54% to close at 6,591, rebounding for two consecutive days, yet neither regained the 200-day moving average. Wall Street sustains vital signs under the oxygen canopy of "ceasefire expectations," but no one is seriously confronting the reality that Iran has publicly rejected the ceasefire.

Oil Prices/Gold: WTI closed at $90.32 (-2.2%), Brent closed at $102.22 (-2.17%); Gold rose to approximately $4,547, and the loosening of the oil price inflation chain provided an opportunity for gold to recover.

Cryptocurrency: Bitcoin touched $71,669 during the day, sustained net inflow into ETFs built an institutional floor, but stablecoin legislation remains unresolved.

The market now cares about only one issue: is Iran's counter five-point plan a negotiating opening or the final answer?

If this is an opening offer, both sides still have room for negotiation, the market's "ceasefire trade" can continue, oil prices will continue to fall, and the stock market is expected to break above the 200-day moving average. If this is the final answer—if Iran is indeed demanding sovereignty over Hormuz—then this war has no near-term exit, and the current rebound is merely eating the last few bites of dividends from the ceasefire rumors.

At least today, one thing is certain: the market's immunity to the "war narrative" is growing stronger, but this immunity itself is soaked in optimism; once the optimism is punctured, the decline will come faster than anyone can imagine.