Market US stock markets closed mixed on March 3rd, with the S&P 500 rebounding to finish higher as investors continued to monitor the situation in Iran. Among the top 20 stocks by trading volume on March 3rd, NVIDIA announced a $4 billion investment in the optical communications industry. Most popular US-listed Chinese stocks declined. China Xincheng Rural rose 5.99%, while XPeng fell 3.22%. US crude oil prices surged sharply as the market focused on the Iran conflict. New York gold futures climbed 1.8%, while spot silver dropped over 4.7%. European stock markets recorded their largest single-day decline since last November, driven by a flight to safety prompted by Middle East tensions.
Macro A federal appeals court rejected a US government request for a delay, restarting litigation proceedings regarding tariff refunds. Amid escalating tensions in the Middle East, US military officials denied that the nation would be drawn into a protracted, intractable war. Former President Trump reiterated his stance on the Iran conflict timeline, stating operations would continue for as long as necessary. Trump suggested that military action against Iran could persist for four to five weeks. A rift between the US and UK widened as UK opposition leader Keir Starmer implied that the conflict initiated by Trump against Iran was unlawful. The French Foreign Minister stated that US and Israeli actions against Iran lacked legitimacy as they were not reviewed by the UN Security Council. The Iran conflict spread to Lebanon, and Kuwaiti forces mistakenly shot down a US military aircraft. The UAE and Qatar were reportedly privately lobbying allies to persuade Trump to shorten the military engagement with Iran. A United Airlines flight made an emergency return to Los Angeles due to an engine malfunction. The Iran conflict endangered Middle East supplies, pushing aluminum prices higher on the London market. The Israeli Defense Forces stated they had completed a round of strikes on facilities belonging to Iran's domestic security and intelligence agencies. Iran claimed that the US and Israel attacked the Natanz nuclear facility on March 1st. Iran conducted the 12th round of attacks as part of its "Operation True Promise 4". Following an attack on a refinery, Saudi Arabia became more deeply involved in the Middle East conflict.
Corporate Shipping giant Maersk suspended bookings for some Middle East routes due to security concerns. Services for Anthropic's Claude and related applications experienced a temporary outage; the company cited "unprecedented" demand over the past week. The CEO of ONE stated that approximately 10% of the global container ship fleet was trapped in the Strait of Hormuz. PayPay postponed its IPO roadshow to assess the impact of the Iran war on markets. JPMorgan Chase's CEO warned that inflation could be a disruptive factor for the US economy. The International Transport Workers' Federation declared the Strait of Hormuz a high-risk zone. Amazon's significant AI investments contributed to its stock posting its worst monthly performance in years. NVIDIA will invest $4 billion in two photonics technology companies. Starlink partnered with Deutsche Telekom to launch satellite mobile communication services in Europe.
Commentary Citi suggested the Iran conflict is merely another concern added to the "wall of worry" for US stocks. JPMorgan reduced the size of its overweight recommendation on emerging markets, citing risks from the Iran war. RBC warned that a prolonged Iran conflict could push oil prices to $100 per barrel. Former Treasury Secretary Janet Yellen anticipated the Federal Reserve would prefer to hold rates steady, as the war would impact the economy and inflation. Natixis recommended betting on a steepening of the US Treasury yield curve, as Middle East conflicts exacerbate economic and supply chain risks. The US-Israel strikes on Iran introduced new risks to the resilience of the US economy. US Treasury markets: Bonds fell sharply, pressured by soaring oil prices and the ISM Price Index. Rising gasoline prices driven by Middle East conflict could undermine a key positive aspect of the Trump energy agenda. New York forex market: The US dollar rose alongside Treasury yields, with escalating Middle East warfare sparking inflation concerns.
