(March 31): Wall Street is ending a volatile March with gains in stocks and bonds on a news report that President Donald Trump would be willing to end the war in Iran even with the Strait of Hormuz largely closed. Oil wavered.
The S&P 500 climbed about 1%, recovering some ground after a selloff that put the gauge on course for its worst month since 2022. Brent, which has soared about 50% since the start of the conflict, hovered near US$107. While crude prices remain elevated, their retreat from multiyear highs extended an advance in Treasuries. The dollar declined and gold rose.
The Wall Street Journal reported that Trump and his aides assessed that a mission to reopen the Strait of Hormuz would push the war beyond his timeline of four-to-six weeks. It also said the president resolved that the US should instead focus on crippling Iran’s navy and missile stockpiles, then wind down current hostilities.
“Sometimes the headlines make you scratch your head,” said Bespoke Investment Group strategists. “If the US just walked away from the Middle East with the Strait still blockaded, energy markets would likely remain incredibly supply-constrained, keeping prices high. Maybe the market expects that if the US pulls back, the Strait would reopen.”
The war is entering its second month, with Iranian threats of retaliation continuing to keep the Strait of Hormuz effectively shut. Trump called on other nations to help wrest control of the waterway as Iran maintained missile fire across the Persian Gulf, with one strike hitting a fully laden oil tanker.
See also: Treasuries climb as Powell eases Fed-hike jitters
Countries that can’t get oil supplies should “go to the Strait and just TAKE IT,” Trump said in social-media post. The US “won’t be there to help you anymore,” he added.
On the economic front, data showed consumer confidence unexpectedly rose in March on slightly more upbeat views of business and labour-market conditions. Job openings fell and hiring slowed in February, pointing to cooler labour demand before the war.
“There do appear to be some early signs of stabilisation in both consumer confidence and job openings after a clear fourth-quarter downtrend,” said Bret Kenwell at eToro. “While that doesn’t yet signal a meaningful rebound, it may suggest the consumer and labour backdrop are no longer deteriorating at the same pace.”
See also: US stocks climb after longest losing streak since 2022
Ultimately, both investors and consumers need to see notable de-escalation in the Middle East and some relief at the gas pump before confidence can rebound significantly, he added.
From here, Kenwell noted investors will look to Friday’s jobs report in hopes that it can offer signs of some stabilization in the labour market.
US employment probably rebounded in March after one of the biggest pullbacks in payrolls since the pandemic. Economists estimate 65,000 jobs were added following a 92,000 decline, according the median of a Bloomberg survey. The jobless rate is seen holding steady at 4.4%.
Some of the main moves in markets:
Stocks
- The S&P 500 rose 1% as of 10.55am New York time
- The Nasdaq 100 rose 1.1%
- The Dow Jones Industrial Average rose 0.6%
- The Stoxx Europe 600 rose 0.4%
- The MSCI World Index rose 0.8%
Currencies
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.5% to US$1.1518
- The British pound rose 0.2% to US$1.3206
- The Japanese yen rose 0.3% to 159.25 per dollar
Cryptocurrencies
- Bitcoin fell 0.2% to US$66,473.52
- Ether rose 0.9% to US$2,039.61
Bonds
- The yield on 10-year Treasuries declined three basis points to 4.32%
- Germany’s 10-year yield was little changed at 3.03%
- Britain’s 10-year yield declined two basis points to 4.92%
Commodities
- West Texas Intermediate crude rose 1.4% to US$104.34 a barrel
- Spot gold rose 1.9% to US$4,598.16 an ounce
Uploaded by Felyx Teoh
