(March 17): US stocks rose Tuesday as investors buy the dip, signalling confidence in the markets even as Iran war tensions escalate.
The S&P 500 Index rose 0.7% as of 9:53am in New York bouncing off a key support level after breaking a four-day losing streak on Monday. Financial stocks like bank juggernaut JPMorgan Chase & Co and insurer Berkshire Hathaway Inc broke away to lead the move, followed by consumer discretionary and energy stocks. The tech-heavy Nasdaq 100 gained 0.8%, while Brent crude oil prices hovered around US$102. The Cboe Volatility Index fell to 22 from last week’s highs.
“The 200-day moving average isn’t necessarily a line-in-the-sand, but a key level of the market’s overall health,” said Jay Woods, chief strategist at Freedom Capital Markets. “However, as algorithmic trading dominates the landscape of Wall Street, these levels tend to have more significance than ever.”
Israel said Tuesday morning that Iran security chief Ali Larijani has been killed, marking the latest escalation in the Iran war. The move follows intensifying strikes by Iran, including a drone strike to a large gas field in the United Arab Emirates and a key UAE oil loading port, Fujairah, suspended operations again.
Over the weekend, a select few tankers trickled through the all-but-closed Strait of Hormuz, boosting investor sentiments that supply chain disruptions would abate. Experts suggest that these journeys are tightly controlled by Iran, even as the US seeks to secure the waterway.
President Donald Trump also requested a delay to his summit with Chinese leader Xi Jinping for about a month as conflict continues to play out in the Middle East.
See also: US may drop quarterly reporting: WSJ
US diesel rose above US$5 a gallon for the first time since December 2022 as the war continues to disrupt energy supplies, driving up fuel prices.
“The S&P 500, while slightly on its heels, is only about 4% off its highs from before the conflict,” said Mark Malek, chief investment officer at Siebert Financial. “That tells me that the market and investor sentiment is holding up. At the end of the day, US markets still offer the best upside opportunities for investment, which is certainly backstopping at least some fear.”
The Federal Reserve kicks off its two-day policy meeting Tuesday with a decision on interest rates to be announced Wednesday. Analysts widely expect officials to hold rates steady.
See also: Oil declines, giving stocks and bonds a boost
“As much as most of the focus is on the War right now, at least some of the focus for investors will move towards the Fed meeting tomorrow,” said Matt Maley, chief market strategist at Miller Tabak + Co, noting that investors are looking for commentary on the private credit market and whether chairman Jerome Powell will step down.
Sectors to watch
- Airline stocks are trading higher after bullish first-quarter preliminary outlooks from both Delta Air Lines Inc and American Airlines Group Inc. Cruise and hotel stocks are also in focus.
- Data centre optical components manufacturers Coherent Corp and Lumentum Holdings Inc fall after Nvidia Corp chief executive officer Jensen Huang said copper wires remain important in server racks.
Uploaded by Magessan Varatharaja
