Global markets continue to be roiled by escalating tensions in the Middle East. Overnight in the U.S. stock market, the three major indices opened significantly lower but then staged a broad rally, with the Nasdaq and S&P 500 indices managing to close in positive territory. Most large-cap technology stocks strengthened. Additionally, the cryptocurrency market saw a broad surge. At the time of writing, Bitcoin had surged over 6%, breaking above the $69,000 level, while Ethereum and SOL also rose over 6%. According to data from CoinGlass, over the past 24 hours, 107,819 traders globally were liquidated, with total liquidations amounting to $370 million.
Regarding the Middle East situation, according to the latest reports from CCTV News, late on the night of March 2 local time, an advisor to the commander of Iran's Islamic Revolutionary Guard Corps stated that the Strait of Hormuz has been closed and that Iran will attack all vessels attempting to pass through it.
Furthermore, recent statements from former U.S. President Donald Trump have also drawn widespread attention. According to CCTV News, Trump stated that sending ground troops to Iran "if necessary" is not off the table. He mentioned that the "major wave" of strikes against Iran has not yet arrived, military action against Iran could last four to five weeks, and he is prepared for an operation lasting far longer than that duration.
U.S. stocks staged a collective rebound. On March 2, Eastern Time, affected by the ongoing escalation of Middle East tensions, the three major U.S. stock indices opened collectively with significant losses. Subsequently, bargain-hunting emerged multiple times during the session, leading to a collective rebound. The indices even turned positive at one point. By the close, the Dow Jones Industrial Average was down slightly by 0.15%, while the Nasdaq Composite rose 0.36% and the S&P 500 edged up 0.04%.
Most large-cap U.S. tech stocks advanced. Nvidia surged approximately 3%, Microsoft gained over 1%, while Apple, Tesla, Netflix, and Meta posted modest gains. Google fell over 1%, and Intel and Amazon closed slightly lower.
U.S. investors buying on dips during the session indicated a general market expectation that disruptions from the conflict might be relatively limited. Bill Smead, Founder and Chairman of Smead Capital Management, said, "Market participants view all this as temporary; issues in the oil sector will eventually subside."
A team led by Morgan Stanley strategist Michael Wilson believes that past military conflicts in the Middle East have not led to prolonged market declines. For this war to cause significant and sustained damage to U.S. equities, oil prices might need to jump above $100 per barrel.
The firm also noted that historically, following "geopolitical risk events," the S&P 500 has seen average gains of 2%, 6%, and 8% after one month, six months, and twelve months, respectively.
In precious metals, spot silver prices experienced a sharp plunge, falling over 7% at one point during the session, ultimately closing down 4.8%. COMEX silver futures settled 3.83% lower. Spot gold also saw a significant sell-off, turning from gains to losses, before finally closing with a modest gain of 0.81%.
Analysts pointed out that the primary reason for the sharp decline in gold and silver prices might be a significant strengthening of the U.S. dollar index, which surged over 1% intraday. Former U.S. Treasury Secretary and former Federal Reserve Chair Janet Yellen stated on Monday that recent developments concerning Iran have made the Fed more inclined to hold steady, and compared to before the event, they would be more cautious about cutting interest rates.
Latest remarks from Trump. According to CCTV News, on March 2 local time, U.S. Secretary of Defense [Note: Context suggests reference is to a press conference about actions against Iran, but specific title/name might be misstated in original] held a press conference regarding the "epic fury" operation against Iran. He confirmed that the U.S. military has not yet deployed ground troops inside Iran but simultaneously stated that no options are off the table. He dismissed talk of an "endless" war with Iran.
Former President Trump told media that sending ground troops to Iran "if necessary" is not excluded. He stated that the "major wave" of strikes against Iran has not yet arrived.
According to CCTV News, Trump said military action against Iran could last four to five weeks, but he expressed readiness for an "operation duration far exceeding this period." The U.S. aims to completely destroy the Iranian navy and has already sunk 10 of its vessels.
Trump stated that a nuclear-armed Iran is unacceptable to the United States. The U.S. continues large-scale military operations within Iran. U.S. and Israeli objectives are very clear, including destroying Iran's missile capabilities and ensuring Iran cannot obtain nuclear weapons.
Also on Monday, U.S. Secretary of State [Note: Name 'Rubio' appears, but this is likely an error; Marco Rubio is a Senator. Original may have intended another official or contains a mistake] stated that the U.S. has been successful in eliminating the threat from the Iranian navy and its short-range missiles. The U.S. goal is to destroy Iran's missiles and navy, and they hope to see a new regime in Iran.
Meanwhile, Iran continues to launch missile and drone attacks against Israel and Gulf states. Iranian state television claimed that Iran did not carry out attacks on Saudi Aramco.
According to CCTV International News, U.S. Central Command confirmed that as of 4:00 PM Eastern Time on March 2 (5:00 AM Beijing Time on March 3), six U.S. military personnel have died due to military action against Iran. It was reported that "the remains of two previously missing U.S. soldiers were found in a facility hit during the initial attacks launched by Iran in the region."
"Strait of Hormuz has been closed." In the early hours of March 3, according to CCTV News, late on the night of March 2 local time, an advisor to the commander of Iran's Islamic Revolutionary Guard Corps stated that the Strait of Hormuz has been closed and that Iran will attack all vessels attempting to pass through it.
Currently, the Iranian Islamic Revolutionary Guard Corps has not yet issued an official statement.
On the same day, Jeremy Nixon, CEO of container shipping company Ocean Network Express, stated that following the U.S.-Israeli strikes on Iran, approximately 750 vessels are currently stranded around the Strait of Hormuz, including about 100 container ships. This represents roughly 10% of the global container fleet being trapped.
The International Transport Workers' Federation and the Joint Negotiating Group issued a statement on their official website stating that the Strait of Hormuz and surrounding waters have been designated a "high-risk area" following the escalation of local military conflict. This designation means shipowners and operators must ensure enhanced protection for seafarers, including conducting risk assessments before transit, securing contractual insurance, and granting seafarers the right to refuse to sail into the area. The International Transport Workers' Federation represents 16.5 million transport workers globally, while the Joint Negotiating Group brings together employers in the maritime industry.
Currently, as Iran retaliates against the U.S.-Israeli strikes, marine insurers have suspended coverage for voyages transiting the strait between Iran and Oman. This strait handles the transport of about one-fifth of global oil consumption and significant volumes of natural gas.
The disruption to energy transport through the Strait of Hormuz is disturbing the pricing of some major global crude oil grades. On March 2, S&P Global Commodity Insights stated in a note to subscribers that it has stopped accepting buy/sell offers in its trading window used to help determine the Dubai benchmark price for crude grades that require passage through this chokepoint. The agency said the affected grades include Dubai, Upper Zakum, Al-Shaheen crudes, and some Murban cargoes.
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