*The three major indexes closed lower, with the Nasdaq falling 0.84%
* Higher oil prices push up interest rates, putting pressure on expectations of rate cuts
*Barclays raises S&P 500 target to 7,650
U.S. stocks fell back on Tuesday, with the previous day's rebound driven by expectations of an easing of geopolitical tensions failing to extend. Although U.S. President Trump said that Iran "wants to reach a deal," the market's confidence in the easing of the situation in the Middle East has once again been shaken, and investor sentiment has become cautious.
As of the close, major stock indexes fell collectively, giving up some of Monday's gains. The Dow Jones Industrial Average fell 84.41 points to close at 46124.06 points, a decrease of 0.18%; the S&P 500 Index fell 24.63 points to close at 6556.37 points, a decrease of 0.37%; the Nasdaq Composite Index fell 184.87 points to close at 21761.89 points, a decrease of 0.84%.
[Performance of popular stocks]
The trends of large technology stocks are divided. Tesla rose 0.57%, Apple rose 0.06%, and AMD rose 1.33%. Nvidia fell 0.25%, Microsoft fell 2.68%, Amazon fell 1.38%, Meta Platforms fell 1.84%, Broadcom fell 1.31%; in terms of Alphabet, Google Class A shares fell 3.85%, and Class C shares fell 3.28%.
The overall performance of Chinese concept stocks was weak, with the Nasdaq China Golden Dragon Index closing down 0.43%. In terms of individual stocks, Pinduoduo rose 1.91%, Tencent Holdings (ADR) rose 0.83%, and Amer Sports rose 1.16%; Alibaba fell 0.46%, JD.com fell 0.25%, Tencent Music fell 1.10%, and Baidu fell 1.75%.
In terms of sectors, seven of the eleven major S&P 500 sectors rose and four fell. The energy sector and materials sector led the gains with gains of 2.05% and 1.67% respectively, while the communication services and real estate sectors led the decline with losses of 2.50% and 0.76% respectively.
【Market Overview】
According to CCTV News, Trump said that the United States is communicating with the "right people" and that Iran "wants to reach a deal"; he also said that Iran "has no leadership" and said that the United States has "achieved great success" on the Iranian issue.
Christopher O'Keefe, managing director and chief portfolio manager of Logan Capital Management, said that the current market is like a "roller coaster" and investors are reassessing the direction of the situation every day. Uncertainty covers a wide range of potential outcomes, and the outcome largely depends on how long the conflict lasts.
Carol Schleif, chief market strategist at BMO Private Wealth, said that the stock market is trying to stabilize, and investors are paying attention to social media trends while keeping an eye on the latest news. The market is currently biased towards short-term trading logic.
Schleife said the market was still trying to build on the optimism from the previous session. Although the situation is not yet completely clear, investors have shown a willingness to shrug off the impact of geopolitical conflicts. However, nervousness has not dissipated. The market is not only paying attention to the trend of oil prices, but also evaluating the path of interest rates, and is worried that energy prices and interest rates may remain high for a longer period of time, thus putting pressure on economic growth.
Kevin Gordon, director of macro research and strategy at Schwab Financial Research Center, said that the simultaneous rise in oil prices and interest rates has constituted a "double shock" to the market, and this combination is obviously detrimental to the stock market. "This is about the least confident market environment you can see. Given what happened yesterday and even today, I don't know anyone who would be willing to be significantly overweight risk assets or significantly underweight risk assets at this time," Gordon added.
At the same time, traders are no longer pricing in any rate cuts this year, whereas before the conflict in the Middle East, the market had expected two rate cuts. As tensions escalated last week, expectations for a rate hike increased. CME Group's FedWatch tool shows that the latest bets point to a more than 30% chance of a rate hike by the end of the year.
Despite heightened geopolitical risks and financial market volatility, some institutions remain relatively optimistic about corporate profits. Barclays raised its 2026 year-end target for the S&P 500 Index from 7,400 points to 7,650 points on the grounds that improved profit expectations can, to a certain extent, hedge against uncertainties such as geopolitical conflicts, artificial intelligence competition, and private equity credit pressures.
In the interest rate market, U.S. Treasury bond yields have risen significantly. The two-year Treasury bond yield once rose to 3.963%, a stage high, and was last at 3.944%, up 11.3 basis points; the 10-year Treasury bond yield was at 4.419%, up 8.3 basis points. The rise in short-term interest rates reflects the market's repricing of the policy path.
In terms of economic data, the U.S. economic momentum has shown a marginal slowdown. Preliminary data released by S&P Global showed that the U.S. Composite PMI Output Index recorded 51.4 in March, down from 51.9 in February and a new low since April last year. Among them, the service industry became the main drag, with its business activity index falling to 51.1, an 11-month low; the manufacturing PMI rose to 52.4, a two-month high.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said the March PMI sent a signal of “slowing growth and rising inflation.” Uncertainty caused by the situation in the Middle East and rising living costs have suppressed demand, while rising energy prices and supply chain delays have pushed up corporate costs. The survey shows that consumer inflation may rise to about 4%, and the risk of stagflation has increased.
In terms of individual stocks, liquidity issues in the private credit market have once again attracted attention. Ares Management announced that it would limit the redemption ratio of its private credit funds to 5%, and Apollo Global Management also took similar measures to deal with the surge in redemption requests. Ares Management shares closed down 1%, while Apollo rose 0.7%.
The move echoes restrictions taken by BlackRock and Morgan Stanley earlier this month, as concerns about potential risks in the private credit sector have increased. Among peer institutions, Blackstone Group and Carlyle Group fell 1.27% and 0.9% respectively.
Jefferies shares rose 2.5% after reports that Japan's Sumitomo Mitsui Financial Group was exploring the possibility of acquiring the investment bank.
Estee Lauder shares fell 9.8% after the company said it was negotiating a potential merger with Spanish beauty group Puig Brands.
【Bulk Performance】
In terms of commodities, international oil prices rose significantly. As of the close, light crude oil futures for May delivery on the New York Mercantile Exchange rose 4.79% to US$92.35 per barrel; Brent crude oil rose 4.55% to US$104.49 per barrel.
The trend of precious metals is divided. Gold prices continued to fall, with spot gold falling 0.4% to US$4,389.26 per ounce; U.S. gold futures closed down 0.1%. Spot silver rose slightly by 0.4% to $69.43 an ounce. Bart Melek, global head of commodity strategy at TD Securities, said that if the conflict continues and pushes up energy prices, it will put pressure on gold in the short term, but as policy space improves, the outlook for gold may still turn positive during the year.
Spot gold has fallen by more than 21% from its January high, and has fallen by nearly 17% since the conflict escalated in late February.
