Dow Jones Plunges Over 1200 Points Late Night, Gold and Silver Decline Sharply, International Oil Prices Surge 8%

On March 3rd Beijing time, U.S. stocks fell sharply across the board. As of the latest report, the three major indices all declined by more than 2%, with the Dow dropping over 1,200 points.

Large technology stocks declined collectively, with Google, Nvidia, and Tesla falling more than 2%.

Semiconductor stocks also declined, with the Philadelphia Semiconductor Index down over 4%, Intel dropping 5.8%, and TSMC and ASML falling more than 5%.

Chinese concept stocks also declined, with the Nasdaq Golden Dragon China Index dropping over 5%, Kingsoft Cloud down 12.44%, Wansheng Newborn down 10.02%, Xpeng Motors down 8.95%, and Baidu Group and Alibaba falling more than 6%.

Spot gold and silver continued to decline, with spot gold briefly falling below $5,000, down more than 6% intraday; spot silver at $79.63 per ounce, down over 10%.

International oil prices continued to rise, with WTI and Brent crude both surging 8%. Brent crude reached $84.27 per barrel, a new high since July 2024.

Most cryptocurrencies declined, with Bitcoin down 0.92%, trading at $66,334 per coin.

According to Xinhua News Agency, international observers believe that the ongoing US-Israel-Iran conflict is exceeding market expectations and may trigger “the biggest oil crisis in years.” This not only severely disrupts global energy supply and pushes up inflation but also influences the monetary policy directions of major economies. In extreme cases such as the long-term closure of the Strait of Hormuz, it could lead to a global recession.

Regarding the future of U.S. stocks, the surge in oil prices has raised concerns about “re-inflation,” directly dampening market expectations for the Federal Reserve to cut interest rates this year.

Traders are preparing for a Federal Reserve that maintains higher interest rates for a longer period. The futures market has pushed back the expected timing of the next rate cut to September. Currently, it is expected that there will only be two 25 basis point rate cuts this year, with a third possible cut not until 2027.

The Federal Reserve’s dual mission of “maintaining employment” and “controlling inflation” is in conflict. Wu Qidi, director of the Zhenda Information Securities Research Institute, told 21st Century Business Herald that in the short term, the priority of fighting inflation may be passively elevated, leading the Fed to delay rate cuts. The Fed may also consider geopolitical uncertainties and choose a “higher for longer” interest rate policy to observe how the situation develops.