Fears of escalating tensions boost crude oil prices, US stocks plummet, Nasdaq drops another 2%, VIX breaks above 30, gold rises nearly 3%

The ongoing escalation of the U.S.-Iran situation continues to put pressure on the market, with WTI crude oil returning to the $100 mark. The Dow Jones Industrial Average follows the NASDAQ into a correction zone, the “fear index” VIX surpasses the 30 mark, and the U.S. dollar index returns to the 100 level.

At the same time, there are signals of a shift in internal market logic, with the 10-year yield briefly turning negative during the day. Analysts believe that the market’s focus on inflation is gradually giving way to concerns about slowing economic growth and even recession.

(U.S. stocks, WTI crude oil, and Treasury yield movements during the day)

Wall Street Journal mentions that the military strikes between Israel and Iran have entered their 28th day, with both sides maintaining a high intensity of conflict and no signs of cooling off. Although U.S. President Trump expressed a calming stance on Thursday, Israel and the U.S. still launched airstrikes against multiple Iranian industrial and nuclear-related facilities on Friday.

Iran retaliated with drones and missiles, warning of reprisals against U.S.-related industrial companies and announcing interceptions of commercial vessels attempting to pass through the Strait of Hormuz.

According to CCTV News, Iranian officials stated they are considering withdrawing from the Treaty on the Non-Proliferation of Nuclear Weapons. Additionally, a senior Iranian security official warned that if the U.S. initiates ground operations, there will be reciprocal measures. They emphasized that any military action by “enemy forces” in the Strait of Hormuz could result in the complete closure of the strait, and the duration of the closure would be indefinite.

Multiple news leads are driving oil prices upward. WTI crude spot prices have surpassed the $100 mark, with WTI futures rising over 5%, settling at the highest level since 2022. Middle Eastern Oman and Dubai crude futures further rebounded, increasing by 5.54% during the day.

(WTI crude futures recover all losses from yesterday’s Trump intervention)

This week’s oil price movements fully illustrate the ineffectiveness of the Trump administration’s “verbal pressure.” At the beginning of the week, a five-day delay was announced, followed by a ceasefire proposal, and on Thursday, a 10-day grace period was given. However, WTI crude prices still finished the week up, completely recovering the 14% drop on Monday.

(WTI crude prices still finished the week up, completely recovering the 14% drop on Monday)

Bloomberg analyst Michael Ball pointed out that the impact of the conflict is evolving from simple flow disruptions to inventory depletion, with spot shortages appearing in Asia. The market no longer expects a quick resolution to the conflict but is starting to trade on expectations of escalation, tightening supply, and deteriorating liquidity.

On Friday, U.S. stocks accelerated their decline after midday, with the S&P 500 finally closing down nearly 1.7%, falling below the 6400 mark. The NASDAQ has dropped more than 2% for two consecutive days, and all three major indices set new lows not seen in over seven months.

(Weekly trend of U.S. benchmark stock indices)

Both the Dow and NASDAQ have officially entered a correction phase, having dropped 10% from their highs for the year.

(NASDAQ has dropped more than 2% for two consecutive days, down 11.5% from its highs for the year)

The VIX index, which measures market panic, closed at 31.05, marking the highest closing level since April 21 of last year, officially surpassing the 30 mark.

(VIX index and component stock volatility soar in sync)

SpotGamma noted that when the VIX crosses 30, it typically means the S&P 500’s implied volatility will rise to the 25%-30% range. After the market enters a negative gamma state, rising volatility will drive more passive hedging, further exacerbating price swings.

(A VIX above 30 typically means the S&P 500’s implied volatility will rise to the 25%-30% range)

SpotGamma further stated that the negative gamma state nearly covers the entire S&P 500 range, with only a small number of 0DTE short put options providing a weak buffer near 6330. However, given the limited size of positions, the effectiveness of support is in doubt.

Mark Hackett from Nationwide summarized the current market state:

The market’s reaction to positions and volatility has exceeded its reaction to fundamentals. A sustained rebound is unlikely until there is a clear resolution to the Iranian situation and stabilization in the energy market.

Goldman Sachs’ trading desk warned that the S&P 500 has fallen below all major moving averages, with a year-to-date decline of about 8%. The next key level to watch is 6300, which is the correction zone for a 10% pullback from the highs. Data shows that a 10% adjustment in the S&P 500 is relatively common within the year.

(A 10% pullback in the S&P happens on average once every 1.5 years)

This week, sector performance was notably divergent. The energy sector and materials sector outperformed the market, while the technology and financial sectors suffered significant losses.

(The U.S. energy sector and materials sector outperformed the market)

The seven major tech firms faced collective pressure, significantly underperforming the rest of the S&P 500 components, with Meta dropping 11.44% for the week, Google A down 8.86%, and Microsoft down 6.57%.

(This week, the seven major tech firms significantly underperformed the rest of the S&P 500 components)

In the bond market, U.S. Treasuries saw significant demand today, decoupling from U.S. stock movements. Analysts believe that inflation worries are fading, and attention is shifting to economic growth issues.

(U.S. major-term Treasury yield trends this week)

This week, the yield curve rose across the board, with Bloomberg strategist Tatiana Darie noting:

U.S. Treasury yields are approaching sensitive levels that may exert substantial pressure on the stock market.

Elias Haddad of Brown Brothers Harriman warned:

The likelihood of sustained energy shocks is rising, which will trap central banks in tightening policies and put government debt on a more precarious path.

This week, market expectations for tightening from major central banks have risen, but there was a slight retreat today.

The dollar surpassed the 100 mark, reaching the highest level since November 2025, fully recovering the losses triggered by news earlier in the week.

(The dollar index fully recovers losses triggered by news earlier in the week)

Cross-currency basis swaps show an increasing shortage of U.S. dollar liquidity, mainly concentrated in the Swiss franc and yen directions. The yen has dropped below the 160 mark for the first time since 2024, raising concerns about intervention by Japanese authorities.

(Global currency swap basis sharply declines, reflecting significant depletion of offshore U.S. dollar liquidity)

Gold rose nearly 3% on Friday, hovering around $4500. The Wall Street Journal mentioned that LME copper rose nearly 0.4%, with a cumulative increase of 2.22% for the week. London copper recorded its first weekly gain since the outbreak of the U.S.-Iran conflict, with analysts believing that a significant decrease in Chinese inventories is the main driver behind the improving demand expectations.

(Weekly trends of gold, silver, copper, and platinum)

On Friday, U.S. stocks fell broadly, with the NASDAQ dropping more than 2% for two consecutive days. The airline ETF fell over 3.5%, leading the decline among U.S. stock sector ETFs, while the energy sector ETF rose 1.7%. Cruise operator Carnival dropped 4.3% on the day after lowering its full-year profit forecast, and its peer Norwegian fell 6.9%.

U.S. benchmark stock indices:

• The S&P 500 index closed down 108.31 points, a decline of 1.67%, at 6368.85 points. The cumulative decline for the week was 2.12%.

• The Dow Jones Industrial Average closed down 793.47 points, a decline of 1.73%, at 45166.64 points. The cumulative decline for the week was 0.90%.

• The NASDAQ closed down 459.724 points, a decline of 2.15%, at 20948.357 points. The cumulative decline for the week was 3.23%.

• The NASDAQ 100 index closed down 454.223 points, a decline of 1.93%, at 23132.771 points.

• The Russell 2000 index closed down 1.75%, at 2449.7 points.

• The VIX index closed up 13.16%, at 31.05.

U.S. sector ETFs:

• The global airline ETF closed down 3.52%, the internet stock index ETF fell 3.01%, the biotech index ETF fell 2.93%, the consumer discretionary ETF fell 2.90%, and the banking ETF fell 2.05%.

(March 27, U.S. stock sector ETFs)

The seven major tech firms:

• The Magnificent 7 index of U.S. tech stocks fell 2.54%, with a cumulative drop of 4.43% for the week.

• Meta fell 3.99%, Amazon fell 3.95%, Tesla fell 2.76%, Microsoft fell 2.51%, Google A fell 2.34%, Nvidia fell 2.17%, and Apple fell 1.62%.

• For the week, Meta fell a cumulative 11.44%, Google A fell 8.86%, Microsoft fell 6.57%, Nvidia fell 3%, Amazon fell 2.94%, Tesla fell 1.67%, while Apple rose 0.33%.

Chip stocks:

• The Philadelphia Semiconductor Index closed down 1.69%, at 7457.668 points. The cumulative decline for the week was 2.78%.

• TSMC ADR rose 0.21%, with a cumulative decline of 0.74% for the week.

• AMD fell 0.87%, with a slight increase of 0.33% for the week.

Chinese concept stocks:

• The Nasdaq Golden Dragon China Index closed down 1.90%, at 6593.28 points, with a cumulative decline of 2.22% for the week.

• Among popular Chinese concept stocks, WeRide fell 9%, Pony.ai fell 5.7%, Kingsoft Cloud fell 5.5%, BYD fell 5.2%, NIO fell 4.4%, Xpeng fell 3.8%, Alibaba fell 2.1%, while Zai Lab rose 2.8%.

Other individual stocks:

• Circle fell 4.68%, with a cumulative decline of 25.68% for the week.

• Cruise operator Carnival dropped 4.3% on the day after lowering its full-year profit forecast, and its peer Norwegian fell 6.9%, reflecting the drag on the consumer discretionary sector.

The German stock market closed down nearly 1.4%, while the Italian banking sector rose over 2.3% for the week.

Pan-European indices:

• The European STOXX 600 index closed down 0.95%, at 575.30 points, with a cumulative increase of 0.35% for the week.

• The Eurozone STOXX 50 index closed down 1.08%, at 5505.80 points, with a cumulative increase of 0.08% for the week.

Indices of various countries:

• The German DAX 30 index closed down 1.38%, at 22300.75 points, with a cumulative decline of 0.35% for the week, following a rapid rise in the market around 19:00 Beijing time on Monday.

• The French CAC 40 index closed down 0.87%, at 7701.95 points, with a cumulative increase of 0.47% for the week.

• The UK FTSE 100 index closed down 0.05%, at 9967.35 points, with a cumulative increase of 0.49%.

  (March 27, performance of major European and American stock indices)

Sectors and individual stocks:

• Among Eurozone blue chips, Rheinmetall fell 3.93%, Siemens Energy fell 3.86%, Schneider Electric fell 3.78%, and Infineon fell 2.74%, the fourth largest decline.

• Among all components of the European STOXX 600 index, CTS Eventim fell 23.20%, Poland’s Dino fell 18.58%, CSG NV fell 9.06%, the third largest decline, and BE Semiconductor Industries fell 5.69%, the sixth worst performance.

The two-year U.S. Treasury yield hit a new high in over a year before declining by about 7.4 basis points. The 10-year German bond yield rose over 5 basis points this week, while the two-year UK bond yield declined over 8 basis points.

U.S. Treasuries:

• At the New York close, the U.S. 10-year Treasury yield rose 1.61 basis points, at 4.4278%, with a cumulative increase of 4.82 basis points for the week.

• The two-year U.S. Treasury yield fell by 7.39 basis points, at 3.9119%, with a cumulative increase of 1.18 basis points for the week; the 30-year U.S. Treasury yield rose 3.19 basis points, at 4.9645%, with a cumulative increase of 2.68 basis points for the week.

  (U.S. major-term Treasury yields)

European bonds:

• At the European close, the German 10-year Treasury yield rose 2.1 basis points, at 3.094%, with a cumulative increase of 5.1 basis points for the week, trading in the range of 2.943%-3.129%.

• The UK 10-year Treasury yield remained flat, at 4.974%, with a cumulative decline of 1.9 basis points for the week. The two-year UK bond yield fell by 4.8 basis points, at 4.481%, with a cumulative decline of 8.6 basis points for the week.

• The French 10-year Treasury yield rose 3.4 basis points, at 3.836%, with a cumulative increase of 8.2 basis points for the week.

The Bloomberg Dollar Index rose 0.7% this week, while the yen fell over 0.6%, breaching 160.

Dollar:

• At the New York close, the ICE Dollar Index rose 0.26%, at 100.161 points, with a cumulative increase of 0.52% for the week, trading in the range of 98.880-100.206 points.

• The Bloomberg Dollar Index rose 0.27%, at 1219.48 points, with a cumulative increase of 0.71% for the week, trading in the range of 1202.47-1219.85 points.

  (Bloomberg Dollar Index)

Yen:

• At the New York close, the dollar to yen increased by 0.28%, at 160.25 yen, with a cumulative increase of 0.65%, trading in the range of 158.02-160.41 yen.

• The euro to yen rose 0.15%, with a cumulative increase of 0.16%; the pound to yen fell 0.19%, with a cumulative increase of 0.10%.

Offshore Renminbi:

• At the New York close, the dollar to offshore renminbi was at 6.9200 yuan, down 3 points from Thursday’s New York close, trading in the range of 6.9237-6.9137 yuan during the day.

Cryptocurrency:

• At the New York close, spot Bitcoin fell 4.29%, dropping below $66,000, marking a second consecutive week of decline.

• Ethereum fell over 3.8%, dropping below the $2000 mark.

(Bitcoin prices)

The settlement price of WTI crude futures rose to the highest level since 2022. The CFTC’s position report showed that for the week ending March 24, speculative net long positions in NYMEX WTI crude oil increased by 1,124 contracts to 148,985 contracts, reaching a new nine-month high.

Crude oil:

• WTI May crude futures closed up $5.16, an increase of 5.46%, at $99.64 per barrel, with a cumulative increase of over 1.43% for the week.

(WTI crude futures)

• Brent May crude futures closed up $4.56, an increase of 4.22%, at $112.57 per barrel, with a cumulative increase of nearly 0.34% for the week.

• Middle Eastern Abu Dhabi Murban crude futures rose 5.54%, at $118.00 per barrel, with a cumulative decline of 19.40% for the week, showing a long-tailed L-shaped trend overall.

Natural gas:

• NYMEX April natural gas futures closed at $3.0950 per million British thermal units.

Gold rose nearly 3% on Friday, hovering around $4500. London copper saw a cumulative increase of over 2% for the week, marking its first weekly gain since the outbreak of the U.S.-Iran conflict. Most industrial metals rose for the week, with London tin up nearly 6%.

Gold:

• At the New York close, spot gold rose 2.91%, at $4502.93 per ounce, with a cumulative increase of 0.10% for the week.

(Spot gold prices)

• COMEX gold futures rose 2.88%, at $4535.80 per ounce, with a cumulative decline of 1.50%, showing a W-shaped trend overall.

Silver:

• At the New York close, spot silver rose 2.6%. For the week, spot silver saw a cumulative increase of nearly 3%, at $69.7470 per ounce.

• For the week, COMEX silver futures rose 0.60%, at $70.080 per ounce.

Other metals:

• At the New York close, COMEX copper futures remained flat. For the week, COMEX copper futures rose 3.08%, at $5.4710 per pound.

• Spot platinum fell a cumulative 3.27%, at $1865.44 per ounce; spot palladium fell a cumulative 2.17%, at $1383.94 per ounce.

• LME copper rose $48, at $12195 per ton. LME tin rose $1663, at $45788 per ton. LME nickel fell $67, at $17186 per ton.

Risk Warning and Disclaimer

The market carries risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this carries risks, and users are responsible for their own decisions.