Risk appetite warms, U.S. stocks rebound, Nasdaq rises over 1%
The White House says there are no plans to deploy ground troops at this time

Eastern Time Wednesday ( March 4 ), after Trump ordered escort for the Hormuz cruise, oil prices stabilized, inflation concerns temporarily eased, while the US service sector growth hit its fastest pace since mid-2022, easing price pressures. Coupled with ADP employment data exceeding expectations, market risk appetite warmed, tech stocks led the rally, with the Nasdaq rising over 1%, US bonds and the dollar falling together, and cryptocurrencies surging.

【US Stock Indices】

By the close, the S&P 500 rose 0.78% to 6,869.50; the Dow Jones increased 0.49% to 48,739.41; the Nasdaq gained 1.29% to 22,807.48.

Latest US data shows February ISM Services PMI reached its highest level since July 2022, February service prices paid sub-index fell to nearly a one-year low, indicating a marginal cooling of inflation in the service sector. February ADP employment increased by 63k, the highest in three months.

Strong economic data temporarily eased investor fears of war in Iran. Wells Fargo analyst Kurt Raine noted that while the risk of further escalation remains, the more likely outcome is rising market risk aversion, but this may only last a short time until investors see hostilities gradually subside.

Earlier, White House Press Secretary Karine LeVine stated at a press conference on March 4 that ground troops are not currently in the plans, but the president will not rule out any military options. This indicates that the war will not escalate further in the short term.

Yesterday, Trump announced dispatching the US Navy to escort oil tankers passing through the Strait of Hormuz and introduced political risk insurance arrangements, which helped ease the pressure of soaring oil prices.

Jim Awad, Senior Managing Director at Clearstead Advisors, said that the White House statement reduced market concerns about major supply disruptions in oil. He pointed out that this risk mitigation boosted investor confidence, prompting them to buy back tech stocks that had been heavily sold in February and are now more attractive than weeks ago. “This combination of factors brings some optimism to the market, but challenges remain in the coming weeks,” Awad said. “We need to stay rational, neither overly optimistic nor overly pessimistic.”

Additionally, Richard Bernstein, CEO of Richard Bernstein Advisors, believes that war could trigger additional inflationary pressures and is one of the main risks for future market volatility. “If the market believes this war will be short-term or has limited impact on the US economy, stocks are likely to continue rebounding,” he said. “Conversely, if the conflict drags on and significantly impacts the US economy, market volatility could further intensify.”

【US Bonds】

US bond yields rose, with the benchmark 10-year yield closing at 4.103%, and the 2-year yield sensitive to Fed policy at 3.5600%.

【Popular US Stocks】

Among popular stocks, Nvidia rose 1.66%, Apple fell 0.47%, Google C fell 0.04%, Google A fell 0.15%, Microsoft rose 0.31%, Amazon increased 3.88%, TSMC rose 1.25%, Meta gained 1.93%, Tesla up 3.44%, Super Micro Semiconductor up 5.82%, Intel up 5.75%.

On the news front, Apple announced a new laptop, MacBook Neo, starting at only 4,599 RMB, marking its biggest push into the low-end laptop market, targeting competitors like Microsoft and Google.

Nvidia CEO Jensen Huang said at a Morgan Stanley conference that Nvidia’s $30 billion investment in OpenAI might be the last large-scale stake opportunity, as OpenAI plans to go public this year.

【Global Indices】

In Europe, the FTSE 100 rose slightly by 0.80% to 10,568 points. France’s CAC40 increased 0.79% to 8,168 points. Germany’s DAX rose 1.74% to 24,205 points.

In Asia, the Hang Seng Index plunged 2.01% to 25,249 points. The H-shares index fell 1.45% to 8,484 points. The Nikkei 225 dropped 3.61% to 54,245.54 points.

【China Indices】

On March 4, overnight, Hang Seng Tech Index futures fell 0.82%, Nasdaq China Golden Dragon Index rose 0.80%, FTSE China A50 Index declined 1.60%.

【Chinese Concept Stocks】

Popular Chinese concept stocks: Tencent Holdings ( Hong Kong stocks ) fell 0.88%, Alibaba down 1.73%, Pinduoduo up 0.48%, NetEase up 1.32%, Baidu up 0.23%, Ctrip down 1.63%, Li Auto up 1.00%, Xpeng Motors up 1.81%, NIO up 5.23%.

【Forex and Commodities】

On Wednesday, signals of easing Middle East conflict suppressed safe-haven buying, with the US dollar index retreating from multi-month highs touched the previous trading day, ending down 0.29% at 98.769.

Affected by the weakening dollar and Dubai air freight disruptions, international spot gold and silver rebounded on the daily chart. London gold closed up 0.39% at $5,140.77 per ounce; London silver rose 0.61% to $83.501 per ounce.

Market expects prolonged US-Iran conflict and ongoing oil supply disruptions, with international oil prices hitting over a year-high for the second consecutive day. WTI crude oil rose 1.97% to $76.03 per barrel; Brent crude gained 1.45% to $82.58 per barrel.

【Key Highlights】

Trump officially nominates Kevin W. to be Fed Chair to succeed Powell

If W.'s nomination is confirmed by the Senate, he will succeed current Fed Chair Powell. Trump’s nomination has been formally submitted to the Senate.

US Senate votes against halting Trump’s Iran strike

On March 4, local time, most US senators supported President Trump’s military actions against Iran, with 47 votes in favor and 52 against, vetoing a bipartisan resolution aimed at stopping airstrikes and requiring congressional approval for any hostile actions against Iran.

White House states US military has struck over 2,000 Iranian targets; no ground troops planned

White House Press Secretary Karine LeVine said at a March 4 press conference that the “Epic Fire” operation launched last weekend targeted Iran’s ballistic missile and production systems, Iranian naval forces, proxies in the Middle East, and aimed to prevent Iran from acquiring nuclear weapons. She stated that over 2,000 targets have been struck so far, destroying numerous missiles, launchers, and drones, and sinking more than 20 Iranian vessels, including a submarine. She added that there are no Iranian ships active in the Persian Gulf, Hormuz Strait, or the Gulf of Oman, and US forces expect to achieve “full control” of Iranian airspace within hours. Six US service members have been killed in the operation. When asked about deploying ground troops, LeVine said ground forces are not currently in the plans, but the president will not rule out any military options.

Better-than-expected non-farm payrolls; US February ADP employment up 63k, highest in three months

Fed officials’ confidence in the employment outlook has improved, but rising inflation pressures have pushed back the timing of rate cuts. Traders now expect the Fed to start the next rate cut no earlier than July, with a lower probability of a second cut this year.

US February ISM Services Index hits highest since mid-2022; backlog orders surge

The US February ISM Services Index rose to 56.1, up 2.3 points from the previous month, reaching its highest since mid-2022, exceeding expectations. The new orders sub-index increased to 58.6, a more than one-year high; the backlog orders index surged 11.9 points in one month, an unprecedented increase, reaching its highest in nearly four years.

Apple releases MacBook Neo, first computer using iPhone chips

Apple announced the MacBook Neo, starting at only 4,599 RMB, marking its biggest effort to enter the low-end laptop market, targeting competitors like Microsoft and Google. According to Apple’s website, the MacBook Neo has two configurations with storage capacities of 256GB and 512GB, priced at 4,599 and 5,299 RMB, available for pre-order on March 6 at 9 am Beijing time, with release on March 11. The Neo features an aluminum chassis and comes in four colors: Silver, Pink, Orange, and Indigo. Tech journalist Mark Gurman commented that these colors could appeal to both students and mainstream consumers.

Jensen Huang: $30 billion investment in OpenAI “may be the last” and excludes the possibility of a $1 trillion investment

Nvidia CEO Jensen Huang said at a Morgan Stanley conference that Nvidia’s $30 billion investment in OpenAI might be the last large-scale stake, as OpenAI plans to go public this year. Previously, the agreement capped Nvidia’s total investment at $100 billion, but this was shelved in January. Huang also dismissed “AI bubble” concerns, emphasizing that deployment of computing power has already yielded tangible benefits, and the industry remains at the start of a growth cycle.

Fed Beige Book: US economy grows mildly to moderately in most regions; sales subdued; inflation moderate

The Fed’s Beige Book states that in recent weeks, economic activity in most US regions has grown at a slight to moderate pace, but more areas report flat or declining activity. Uncertainty, rising prices sensitivity, and reduced spending by low-income consumers have restrained sales. Overall employment remains stable, though companies are exploring AI to improve efficiency. Eight of the twelve districts report moderate inflation.

Fed Governor M. signals no change in rate cut outlook amid Middle East tensions; labor market still needs policy support

Milan said on Wednesday that despite market turbulence caused by US and Israel attacks on Iran, the Fed should continue cutting rates by 25 basis points to a neutral level, as the labor market still requires policy support. This contrasts with most officials’ cautious stance, who emphasize increased uncertainty from Middle East tensions and prefer to keep rates steady. Rising oil prices have already led markets to lower expectations for rate cuts in 2026. The upcoming February employment report on Friday may be key to resolving internal disagreements.