US-Iran Tensions Heat Up as US Stock Market Plummets Across the Board; Brent Crude Surges Above $100, Igniting Inflation Concerns

On Thursday, Eastern Time (March 12), U.S. stocks declined across the board, with the three major indices falling at least 1.5%. Iran’s newly appointed Supreme Leader, Mujtaba Khamenei, issued his first statement, stating that Iran will continue to adopt strategic measures including blocking the Strait of Hormuz, while also attacking U.S. military bases in the Middle East. As a result, hopes for a quick resolution to the Middle East conflict are slim, oil prices continue to surge, fueling inflation concerns. Coupled with rising redemption pressures in the U.S. private credit market, both U.S. stocks and U.S. Treasuries suffered significant declines.

【U.S. Stock Indices】

At the close, the S&P 500 fell 1.52% to 6,672.62; the Dow Jones Industrial Average dropped 1.56% to 46,677.85; the Nasdaq declined 1.78% to 22,311.98.

According to reports from CCTV News and Xinhua News Agency, on March 12, local time, Iran’s Supreme Leader Mujtaba Khamenei delivered his first comprehensive statement since taking office, elaborating on the country’s development direction, regional situation, and responses to external challenges.

Khamenei explicitly stated that Iran will continue to adopt strategic measures including blocking the Strait of Hormuz and, if necessary, opening new fronts. In a statement broadcast on Iran’s national television, he said: “We have studied opening other fronts that are less experienced and more vulnerable to attack by the enemy. If the state of war persists and aligns with national interests, these fronts will be activated. The blockade of the Strait of Hormuz must of course continue.”

He also warned that all U.S. military bases in the Middle East should be immediately closed, or they will be attacked. “We believe in friendly relations with neighboring countries and will continue to target enemy bases.”

Following the announcement, international oil benchmarks Brent crude surged, closing up about 10% and surpassing the $100 mark for the first time since August 2022. This has heightened inflation fears, leading traders to no longer fully price in the Federal Reserve’s rate cuts in 2026.

The International Energy Agency (IEA) warned that the Iran conflict is causing the largest-ever disruption to global oil supplies, intensifying concerns over rising inflation. Goldman Sachs warned that if flow through the Strait of Hormuz remains constrained throughout March, Brent oil prices could surpass the 2008 record high of $147.50 per barrel.

Regarding soaring oil prices, White House Press Secretary Karine Jean-Pierre stated on Thursday that the Trump administration is considering temporarily waiving the century-old Jones Act to ensure the free transportation of energy and agricultural products between U.S. ports. The law allows foreign ships to carry goods between U.S. ports to suppress oil prices. U.S. Energy Secretary Chris Wray said the U.S. Navy could begin escorting oil tankers through the Strait of Hormuz as early as the end of March.

Analysts noted, “The market has already realized that the resolution of the Middle East conflict could be further delayed. The current market sentiment is to sell first and consider fundamentals later. Apart from the energy sector, there are hardly any truly safe sectors.”

In addition to energy shocks, signs of new pressure are emerging in the $1.8 trillion private credit market, becoming another drag on U.S. stocks. The banking sector declined overnight, with Morgan Stanley and Goldman Sachs falling over 4%. Morgan Stanley and Cliffwater LLC’s private credit funds, due to a surge in redemption requests, have been forced to restrict withdrawals. Deutsche Bank disclosed that its exposure to the industry amounts to $30 billion.

【U.S. Treasuries】

U.S. Treasuries were sold off, with yields rising again. The benchmark 10-year Treasury yield closed at 4.263%, and the 2-year yield, sensitive to Federal Reserve policy, closed at 3.745%.

【Popular U.S. Stocks】

Among popular U.S. stocks, Nvidia fell 1.54%, Apple dropped 1.94%, Alphabet A declined 1.67%, Alphabet C fell 1.69%, Microsoft declined 0.74%, Amazon dropped 1.47%, TSMC fell 5.00%, Meta declined 2.55%, Tesla dropped 3.14%, Seagate Semiconductor fell 3.46%, and Intel declined 5.69%.

On the news front, Alphabet is undertaking its biggest upgrade to its mapping product in over a decade, introducing a new feature called “Ask Maps” in Google Maps, allowing users to interact with the app as if chatting with a chatbot.

Microsoft and Meta have each added nearly $50 billion in data center leasing commitments in the past quarter to support AI development. Including Oracle and Amazon, the world’s largest cloud computing companies have committed over $700 billion in future data center leases.

【Global Indices】

In Europe, the FTSE 100 in the UK declined slightly by 0.47%, closing at 10,305 points. France’s CAC 40 fell 0.71% to 7,984 points. Germany’s DAX decreased 0.21% to 23,590 points.

In Asia, the Hang Seng Index declined slightly by 0.70% to 25,717 points. The H-share Index fell 0.06% to 8,700 points. The Nikkei 225 dropped 1.04% to 54,453 points.

【China Indices】

On March 12, overnight, the Hang Seng Tech Index futures declined 0.51%, the Nasdaq Golden Dragon China Index fell 1.02%, and the FTSE China A50 Index declined 0.35%.

【Chinese Concept Stocks】

Among popular Chinese concept stocks, Tencent Holdings (HK) fell 1.00%, Alibaba dropped 1.52%, Pinduoduo declined 1.28%, NetEase rose 0.88%, Baidu fell 1.59%, Ctrip declined 0.33%, Li Auto dropped 2.52%, Xpeng rose 3.55%, and NIO increased 1.10%.

【Forex and Commodities】

On Thursday, due to ongoing caution over Middle East conflicts, the US dollar index initially fell then rose, rallying before the U.S. trading session and approaching the 100 level, ending up 0.51% at 99.739, marking the third consecutive day of strength.

Supported by a strong dollar and market concerns that inflation will lead to a slowdown in global central bank rate hikes, spot gold continued to decline before the U.S. trading session, with London gold ending down 1% at $5,080 per ounce; spot silver followed gold downward, with London silver falling 0.82% to $83.91 per ounce.

Amid attacks on Gulf region oil tankers and Iran’s warnings, crude oil prices surged intraday, approaching $100 again. WTI crude opened sharply higher and continued to rise during European trading hours, ending up 10.44% at $96.36 per barrel; Brent crude rose 10.62% to $101.75 per barrel (futures settlement price).

【Highlights】

Middle East Escalation: Drones Strike Dubai, Oil Prices Break $100

According to Xinhua News Agency, on March 11, two drones fell near Dubai International Airport, injuring four people. Goldman Sachs, Citigroup, and other institutions urgently evacuated personnel, with over 46,000 flights canceled. Due to the paralysis of the Strait of Hormuz, countries like Saudi Arabia were forced to cut production, with Brent crude briefly surpassing $101.50. Models predict that if the blockade continues through March, oil prices could peak near $164.

Iran Says Trump’s Tweets Won’t End the War

Iran’s Secretary of the Supreme National Security Council, Ali Larijani, on March 12, commented on U.S. President Trump’s statement that “the war must be won quickly,” noting that starting a war is easy, but ending it is not achieved through a few tweets. Larijani emphasized that once a war begins, its end is not simple, and Iran will not easily let go of its adversaries.

Market No Longer Expects the Fed to Cut Rates This Year! Trump Urges Powell to Cut Immediately: Don’t Wait for the Next Meeting!

On Thursday, the yield on the 2-year U.S. Treasury soared, and traders no longer believe there is a 100% chance of the Fed cutting rates once by 2026. Trump posted on social media: “Where is Jerome Powell, the Fed Chair, today? He should cut rates immediately, not wait until the next meeting!” The Middle East conflict has pushed up oil prices and threatened global supply chains. U.S. public dissatisfaction with living costs is rising, which is not favorable for Republicans to maintain control of Congress in the November midterms.

Nvidia Invests $26 Billion to Compete in AI Models

Nvidia announced it will invest $26 billion over the next five years to develop open-source large models, transforming from a hardware giant into a full-stack AI company. The newly released Nemotron 3 Super has 128 billion parameters, scoring 37 points in comprehensive evaluations, surpassing OpenAI GPT-OSS’s 33 points. This open-source strategy deeply integrates with Nvidia’s hardware ecosystem, challenging labs like OpenAI and further consolidating its dominant position in AI computing power.

Google Launches AI Q&A Feature for Its Software

Alphabet is undertaking its biggest upgrade to its mapping product in over a decade, introducing a new feature called “Ask Maps” in Google Maps, allowing users to interact with the app as if chatting with a chatbot. Miriam Daniel, Vice President and General Manager of Google Maps, said in an official blog: “We combined the latest global maps with our most powerful Gemini model to make exploring maps easier and more intuitive, with the largest navigation upgrade in over ten years.”

Microsoft and Meta Drive Data Center Leasing to $700 Billion

Microsoft and Meta each added nearly $50 billion in data center leasing commitments in the recent quarter to support AI development. Including Oracle and Amazon, the world’s largest cloud providers have committed over $700 billion in future leases for data centers, offices, or warehouses, payable over 15-19 years.

Amazon Launches $54 Billion Bonds, Snapped Up Rapidly

This week, banks responsible for selling Amazon bonds sent a clear message to investors: in an increasingly unpredictable world, Amazon is a relatively safe investment. On Tuesday, Amazon issued $37 billion in bonds across 11 maturities in the U.S., with subscription orders reaching up to $126 billion, nearing a record. On Wednesday, the company issued bonds in the euro market for the first time, totaling €14.5 billion (about $16.8 billion), setting a record for the largest corporate bond issuance in the euro market. Lead underwriter J.P. Morgan’s head of investment-grade debt capital markets, John Servidea, said Wall Street banks have been advising companies that this is a “window that may open and close quickly.”