All markets surge! Over 100,000 traders liquidated! Middle East tensions shake up the global markets

Source: Securities Times Network Author: Zhou Le

Tensions in the Middle East continue to shake global markets.

Last night, the U.S. stock market opened sharply lower but then rallied across the board. The Nasdaq and S&P 500 indices stubbornly closed higher, with most large tech stocks gaining. Additionally, the cryptocurrency market surged across the board. As of press time, Bitcoin soared over 6%, surpassing $69,000; Ethereum and SOL also rose over 6%. According to CoinGlass data, in the past 24 hours, a total of 107,819 traders were liquidated worldwide, with total liquidation amounting to $370 million.

Regarding the Middle East situation, according to the latest news from CCTV, late on March 2 local time, an advisor to the commander of the Iranian Islamic Revolutionary Guard Corps stated that the Strait of Hormuz has been closed, and Iran will target all ships attempting to pass through the Strait.

Furthermore, U.S. President Trump’s latest remarks have also attracted attention. According to CCTV, Trump said that the deployment of ground troops to Iran is not ruled out if necessary, and that the “big wave” of strikes against Iran has not yet arrived. He indicated that operations against Iran could last four to five weeks, and that preparations are in place for a duration far beyond that.

U.S. stocks rally collectively

On March 2, Eastern Time, influenced by the ongoing escalation of tensions in the Middle East, the three major U.S. stock indices opened sharply lower. However, throughout the trading session, there were multiple buy-the-dip attempts, and the indices rallied collectively, turning positive at times. By the close, the Dow fell slightly by 0.15%, the Nasdaq rose 0.36%, and the S&P 500 increased by 0.04%.

Most large tech stocks in the U.S. rose, with Nvidia up about 3%, Microsoft up over 1%, and Apple, Tesla, Netflix, and Meta closing slightly higher. Google declined over 1%, while Intel and Amazon saw slight declines.

U.S. investors bought on dips during the session, indicating a market expectation that the disruptions from the conflict might be relatively limited. Bill Smead, founder and chairman of Smead Capital Management, said, “Market participants believe this is only temporary, and issues in the oil sector will eventually subside.”

Morgan Stanley strategist Michael Wilson and his team believe that past military conflicts in the Middle East have not caused long-term declines in the markets. For this war to cause significant and sustained damage to U.S. stocks, oil prices would likely need to jump above $100 per barrel.

The bank also noted that historically, following “geopolitical risk events,” the S&P 500 has averaged gains of 2%, 6%, and 8% after 1 month, 6 months, and 12 months, respectively.

In precious metals, spot silver prices initially plunged sharply, dropping over 7 intraday before closing down 4.8%. COMEX silver futures fell 3.83%. Spot gold also experienced a sharp decline, turning from gains to losses, but ultimately closed up slightly by 0.81%.

Analysts suggest that the main reason for the sharp drop in gold and silver prices may be the significant strengthening of the U.S. dollar index, which surged over 1% during the day. On Monday, former U.S. Treasury Secretary and Federal Reserve Chair Janet Yellen stated that recent developments in Iran have made the Fed more inclined to hold steady, and compared to before the events, their attitude toward rate cuts has become more cautious.

Trump’s latest remarks

According to CCTV, on March 2 local time, U.S. Secretary of Defense Lloyd Austin held a press conference regarding the “epic fury” action against Iran. He confirmed that U.S. troops have not yet deployed ground forces inside Iran but did not rule out any options. He dismissed claims of an “endless” war with Iran.

U.S. President Trump also told the media that the deployment of ground troops to Iran is not ruled out if necessary, and that the “big wave” of strikes against Iran has not yet arrived.

According to CCTV, Trump said that military operations against Iran could last 4 to 5 weeks, but he is prepared for actions that could extend well beyond that. The U.S. aims to completely destroy Iran’s navy and has already sunk 10 of its ships.

Trump stated that a nuclear-armed Iran is unacceptable to the U.S. and that the U.S. continues to carry out large-scale military actions in Iran. The U.S. and Israel have very clear objectives, including destroying Iran’s missile capabilities and preventing Iran from acquiring nuclear weapons.

On the same Monday, U.S. Secretary of State Antony Blinken said that the U.S. has made progress in eliminating threats from Iran’s navy and short-range missiles. The goal is to destroy Iran’s missiles and navy, and to see a new regime emerge in Iran.

Meanwhile, Iran continues missile and drone attacks against Israel and Gulf countries. Iran’s state television said Iran has not launched an attack on Saudi Aramco.

According to CCTV International, the U.S. Central Command confirmed that as of 4 a.m. Eastern Time on March 2 (5 a.m. Beijing time on March 3), six U.S. soldiers had been killed in military actions against Iran. It is reported that remains of two previously missing U.S. soldiers were found in a facility hit during Iran’s initial attack in the region.

“Strait of Hormuz has been closed”

On March 3 early morning, CCTV reported that late on March 2 local time, an advisor to the commander of the Iranian Islamic Revolutionary Guard Corps stated that the Strait of Hormuz has been closed, and Iran will target all ships attempting to pass through the strait.

Currently, the Iranian Islamic Revolutionary Guard has not issued an official statement.

On the same day, Jeremy Nixon, CEO of Ocean Network Express, stated that after the U.S.-Israel attack on Iran, about 750 ships are currently stranded around the Strait of Hormuz, including approximately 100 container ships. About 10% of the global container fleet is trapped here.

The International Transport Workers’ Federation and the Joint Negotiating Group issued a statement on their website saying that the Strait of Hormuz and its surrounding waters have been designated as a “high-risk area” following the escalation of local military conflict. This designation requires shipowners and operators to ensure increased protection for crew members, including risk assessments before transiting, contractual insurance, and crew members’ right to refuse passage through the area. The ITF represents 16.5 million transport workers worldwide, while the Joint Negotiating Group includes maritime industry employers.

Currently, with Iran’s retaliatory actions against the U.S. and Israel, marine insurance companies have suspended voyages through the Strait of Hormuz between Iran and Oman. This strait accounts for about one-fifth of global oil consumption and transports a large volume of natural gas.

Disruption of energy shipments through the Strait of Hormuz is affecting the pricing of some major crude oil grades globally. On March 2, S&P Global Energy announced that it has ceased accepting bids for oil grades that need to pass through this chokepoint in its trading window used to help determine Dubai crude benchmarks. The affected grades include Dubai, Upper Zakum, Al-Shaheen, and some Murban cargoes.

(Edited by: Wen Jing)

Keywords: Bitcoin Stock Market