'There was nowhere to hide in the market': US indices and gold fall on fourth day of war

All major U.S. stock indices fell at the end of trading on March 3. U.S. stocks and defensive assets began the day with a powerful collapse amid the war in Iran and the blockage of the Strait of Hormuz. "There was practically nowhere to hide," commented CNBC on the fact that investors fled not only from stocks, but also sold off gold. Oil, on the other hand, rose sharply.

However, in the second half of the day, stocks and gold began to recover, while oil futures reduced growth after US President Donald Trump announced that the US fleet would escort tankers through the Strait of Hormuz if necessary. However, the depreciated assets failed to recoup their losses completely.

- On Tuesday, March 3, the broad market index S&P 500 fell by 0.9%. At the same time during the session the decline reached 2.5%.

- The Nasdaq Composite index of the technology sector lost 1%. At the low, the fall was 2.7%.

- The blue-chip index Dow Jones Industrial Average fell by 0.8% during the day. During the trades, it was losing more than 1,200 points or about 2.6%.

- Russell 2000 index of shares of small-capitalization companies collapsed more than others. By the end of the day it fell by 1.8%, and at the minimum it was losing up to 4%.

- Gold fell 3% to $5100 an ounce amid a stronger dollar.

- The dollar rose 0.65% against other currencies on Tuesday.

- The CBOE VIX Volatility Index, also called the Wall Street Fear Index, added more than 10% on the day and rose to its highest level since November: 23.67 points. The psychological marker for high market volatility is the 20-point level.

- Bitcoin has lost 1.65% and is worth about $68,000 per token.

Brent crude oil showed a 3.8% growth to close at $80.72 per barrel. North American WTI rose by 3.6% to $73.8. At the moment, the prices for both oil grades added over 9%.

The rally slowed sharply after President Donald Trump's statement. He promised that the United States would ensure the movement of tankers through the Strait of Hormuz, and did not rule out that the armed forces could be used for this purpose. He also instructed the US development bank DFC to provide guarantees of financial security for all maritime transportation in the Persian Gulf.

- Trump's announcement to protect shipping in the Strait of Hormuz helped ease investor fears of a massive global supply shock, easing inflation worries and causing U.S. Treasury yields to pull back from recent highs, LPL Financial's Adam Turnquist noted in a conversation with Bloomberg.

- "For now, markets are trading from headline to headline," Forex.com's Fawad Razaqzada told the agency. - Much will depend on whether tensions ease or if this turns out to be the start of a more protracted disruption in global supply."

- Sharp fluctuations of quotations and a wide intraday trading range show that investors find it difficult to assess the risks associated with the conflict around Iran, says Will Compernolle of FHN Financial, whose opinion is quoted by Bloomberg.

- "Events like this need to be given time to settle, and that could take a couple weeks," Nancy Tengler of Laffer Tengler Investments told the agency. - "I don't think this is the beginning of a bear market."

- Unless there is a prolonged disruption in oil supplies, the conflict itself is unlikely to end the cyclical bull market in stocks, agree Ed Clissold and Thanh Nguyen of Ned Davis Research. This company has been tracking crisis events for decades, Bloomberg notes.

- Although it is widely believed that a significant jump in oil prices can trigger a recession, history shows that this is not predetermined, assures Jeffrey Yale Rubin of Birinyi Associates. Since 1989, he says, there have been several instances where oil prices have doubled without triggering an economic downturn.

- In general, military action causes short-term disruption to markets, but if economic damage remains limited, quotes fully recover once there is more clarity on the scale of the intervention, says Chris Zaccarelli of Northlight Asset Management. "It is too early to tell how events will unfold this month, but we expect opportunities to arise if traders overreact and start getting rid of even high-quality assets," he said.

This article was AI-translated and verified by a human editor