U.S. Stocks Movement | Dow Jones Falls Nearly 800 Points at Close, Entering Technical Correction

U.S. President Trump announced a 10-day extension to the deadline for striking Iranian power plants and energy infrastructure until April 6, but an Iranian nuclear facility with a heavy water reactor and a yellowcake production plant were still attacked, as well as Iran’s two largest steel mills. Market anxiety intensified, and with U.S. long-term bond yields rising, the Dow Jones Industrial Average (DJIA) fell nearly 900 points on Friday, with all three major indices closing near their daily lows. The DJIA has retraced 10.5% from recent highs, and after the Nasdaq, it has also entered a technical correction. The VIX index, commonly known as the “fear index,” surged 15.3% to 31.65 at one point.

The Dow opened down 55 points and the decline widened to a maximum of 896 points, hitting a low of 45063 points; the S&P 500 fell by 1.87%, and the Nasdaq dropped by 2.33% at one point. Among individual stocks, Meta and Amazon both closed down 4%, while Tesla and Microsoft fell by 2.8% and 2.5%, respectively.

International oil prices fell before rebounding. New York crude oil dropped by 2.54% at one point but closed up 5.46%, settling at $99.64 per barrel, while Brent crude oil rose by 4.22%, closing at $112.57. Macquarie Bank warned that if the Iran conflict continues until June and the Strait of Hormuz remains closed, Brent crude could rise to $200. Analysts from the bank pointed out that if the disruptions last into the second quarter, oil prices could reach historical highs, estimating a 40% chance of this scenario occurring.

Economist Nouriel Roubini, known as “Dr. Doom,” stated in an interview that the chance of Trump escalating the Iran conflict is over 50%. He pointed out that the U.S. and Israel hope for the fall of the Iranian regime, which may lead to a short-term rise in oil prices but could yield better mid-term results. He also noted that prolonged conflict would harm the global economy and escalating warfare could lead to further destruction of Iranian oil facilities.

As of the U.S. market close, the DJIA was at 45166 points, down 793 points or 1.73%; the S&P 500 fell 1.67% to 6368 points; the Nasdaq declined 2.15% to 20948 points; the Golden Dragon Index, reflecting the performance of Chinese concept stocks, dropped 1.9% to 6593 points. For the week, the DJIA retreated 0.9%, the S&P 500 fell 2.1%, marking the fifth consecutive week of declines for both; the Nasdaq decreased by 3.2%; the Golden Dragon China Index fell by 2.2%.

European stocks faced pressure across the board, with the UK, France, and Germany closing down 0.05%, 0.87%, and 1.38%, respectively. Bitcoin dropped by 5.2% to $65532, while spot gold prices rebounded by as much as 4.09%, reaching $4554.93 per ounce.

The U.S. dollar index rose 0.31% to 100.21, while the euro fluctuated down 0.22% to $1.1502. The Japanese yen briefly fell to 160.42 per dollar, down 0.38%, as Japanese Finance Minister Shunichi Suzuki warned again of possible intervention in the currency market.

According to Bank of America citing EPFR Global data, as of the week ending March 25, global equity funds saw outflows of $29 billion (approximately HKD 226.2 billion), with U.S. equity funds redeeming $23.6 billion, the largest in 13 weeks. Gold funds recorded an outflow of $6.3 billion, the highest since October of last year.

Yen Falls Below 160, Warning of Possible Intervention

The final value of the U.S. March Michigan Consumer Sentiment Index was 53.3, below the preliminary value of 55.5; the inflation expectation for the next year reached 3.8%, significantly higher than the previous month’s 3.4%; the 5 to 10-year inflation expectation was 3.2%. The 10-year U.S. Treasury yield briefly rose by 7.02 basis points to 4.4819%, but the more interest rate-sensitive 2-year yield fell by 8 basis points to 3.904%. Federal Reserve Governor Lisa Cook noted in a speech that the Iran conflict has increased current inflation risks, while another governor, Michael Barr, stated that it will take time to assess the situation and expressed concerns that the impact of tariffs on inflation will extend beyond this year.