U.S. Stocks Close | Dow Jones Drops 784 Points, Previously Plunged 1,162 Points; Nasdaq Falls 0.3%; WTI Crude Surges Above $80; Brent Crude Exceeds $85

The Iran war enters its sixth day, with crude oil prices surging sharply. The conflict in the Middle East is rapidly spreading across the region, including Qatar and Bahrain. Azerbaijan also reports drone attacks by Larn无人机, while Tehran claims its naval fighters attacked a US oil tanker in the northern Persian Gulf.

Secretary of Iran’s Supreme National Security Council, Ali Larijani, posted on social media that Iran is prepared to respond to US ground actions, vowing to “humiliate those American officials at all costs.”

The escalation has driven international oil prices higher, triggering a new round of selling in the bond markets. US bond yields rise, the Dow Jones Industrial Average once dropped over 1,162 points, closing down 784 points at 47,954; the Nasdaq once fell 1.35%, but recovered most losses to close down 0.26% at 22,748; the S&P 500 declined 0.57% to 6,830.

NYMEX crude oil rose 8.5%, the largest single-day gain in nearly six years, closing at $81.01 per barrel, a new high since July 2024; Brent crude increased 4.93%, closing at $85.41.

The US dollar index rose above 99, up 0.3%, at 99.04; US long-term bond yields rebounded to 4.14%.

Bloomberg reports that Poland’s central bank governor, Adam Glapinski, proposed selling part of the country’s gold reserves to raise about $13 billion, aiming to replace EU financing plans and strengthen defense cooperation with the US.

NY spot gold prices briefly fell 1.5% on Thursday, reaching a low of $5,062 per ounce.

Key stocks: Nvidia closed relatively stable, up 0.16%; Microsoft rose 1.4%. Chipmaker Broadcom is optimistic about AI chip sales prospects, rising 4.8% against the trend.

First Eagle Investment Management states that rising risks have led insurers to refuse coverage for voyages, causing shipping through the Strait of Hormuz to halt in recent days. Continued disruption could push oil prices higher, severely impacting the global economy, especially China and other Asian markets heavily reliant on imports through the strait.

The firm notes that although OPEC+ agreed to increase daily production by 206,000 barrels from April, most major OPEC countries, except Saudi Arabia, depend heavily on exports via the Strait of Hormuz. Persistent shipping disruptions would make it difficult for increased output to alleviate supply shortages.

UK Prime Minister Keir Starmer announced that the UK will send four Typhoon fighter jets to Qatar to bolster regional defense. He also said the US has been granted permission to use UK airports for defense missions.

Richmond Fed President Thomas Barkin believes next week’s upcoming PCE data will show inflation remaining high for several months. With the conflict between the US and Iran potentially pushing up key consumer prices, persistent inflation and strong recent employment data could alter the Fed’s outlook. The Fed’s rate cuts last year were based on rising labor market risks and declining inflation risks, but recent data suggest the situation has reversed.

For the week ending February 28, initial unemployment claims remained at 213,000, below expectations of 215,000; continuing claims increased by 46,000 to 1.868 million, above the forecast of 1.845 million.

Hong Kong stocks and ADR markets continue to update. See next page for details.