Market Overview on March 11: The war is still not over, and oil prices drop another 15%

Author: Deep Tide TechFlow

U.S. Stocks: Conflicting Signals, Market Stagnation

On Tuesday, Wall Street resembled a confused trader—uncertain whom to believe.

The Dow dipped slightly by 34 points (-0.07%) to close at 47,707, the S&P 500 fell 0.21%, and the Nasdaq was nearly flat, up just 0.01%. Throughout the day, the three major indices fluctuated between gains and losses, ultimately ending almost unchanged.

Why is the market so conflicted? On Monday, Trump said the war “is almost over,” causing a surge. But on Tuesday, the White House clarified: the Strait of Hormuz has not yet resumed escort duties, U.S. military operations are escalating, and diplomatic prospects are limited. This directly contradicted Monday’s optimistic outlook.

Initially, the market rebounded on hopes of de-escalation, then turned lower after the White House clarified that escort duties in the Strait of Hormuz had not resumed. Investors shifted instantly from the euphoria of “the war is ending” to the anxiety of “the war is far from over.”

Sector performance was highly divided: of the 11 sectors in the S&P 500, 9 declined, with energy leading the decline. The plunge in energy stocks was driven by continued falling oil prices—even if the war isn’t over, oil prices are dropping, which is a double blow to energy companies.

Chip stocks were the only bright spot. Nvidia rose 1.2%, Micron surged 3.5%, and Intel gained 2.6%. The catalyst was TSMC reporting strong sales data, confirming that chip demand remains robust. Amid geopolitical risks, inflation fears, and wild oil prices, chip stocks are among the few certainty in the market.

The Dow 30: 3M led gains with a 2.39% rise, Cisco up 1.84%, and Caterpillar up 1.69%. The biggest losers were Boeing, down 3.20%, Salesforce, down 1.95%, and Chevron, down 1.60%.

Year-to-date: The Dow remains in negative territory, still far from reversing its annual decline.

Oil Prices: Down another 15%, but still 30% above pre-war levels

On Tuesday, oil prices continued to plummet, though the decline slowed.

Brent crude fell 11.28% to $87.80 per barrel. WTI crude dropped 11.94% to $83.45 per barrel. This marks the second consecutive day of declines—Monday from $120 to $95, Tuesday further down to the $83–$88 range.

Over two days, prices have fallen more than 30%, yet remain 25-30% above pre-war levels. Before the conflict (February 28), Brent was about $73, and WTI around $67. Even after two days of sharp declines, oil prices are still roughly $20–$25 above pre-war levels.

The catalyst for Tuesday’s plunge was still Trump’s statement in a CBS interview that the war is “basically over.” The market chose to believe the president rather than the White House’s clarification.

However, then U.S. Defense Secretary Pete Hegseth dampened optimism. At a Pentagon briefing, he said the war would not end until the “enemy is thoroughly and decisively defeated,” according to the U.S. timetable. This suggests the conflict could last weeks or even months.

The International Energy Agency (IEA) Executive Director Fatih Birol issued a statement on Tuesday, saying IEA member countries will meet to assess current supply security and market conditions. This hints at a possible release of strategic oil reserves—if that happens, oil prices could fall further.

Saudi Arabia warned of catastrophic consequences. Saudi Aramco, the world’s largest oil exporter, warned Tuesday that if oil flows through the Strait of Hormuz cannot be restored, it will have “disastrous consequences” for the oil market.

Oil prices are now in a delicate balance: Trump says the war is ending → prices plunge; Pentagon says the war isn’t over → but the market no longer believes it.

Gold: Surges 2.4%, back above $5,200

On Tuesday, gold staged a strong rebound.

Gold soared 2.44% to $5,228 per ounce, gaining $124.70 in a single day. This completely erased Monday’s decline and set a new high for the rebound. Silver performed even better, jumping 6.25% to $89.81 per ounce, with gains 2.5 times those of gold.

Why are safe-haven assets surging? Three reasons:

First, the drop in oil prices from nearly $120 alleviates inflation pressures, boosting expectations of Fed rate cuts. Falling oil → lower inflation expectations → higher likelihood of Fed rate cuts → gold benefits.

Second, the dollar’s movement was stagnant. On Monday, a surge in the dollar suppressed gold; on Tuesday, the dollar paused its rally, giving gold a breather.

Third, geopolitical risks have not truly disappeared. Although Trump said the war is ending, the Pentagon says it’s not; the Strait of Hormuz remains closed; Saudi Arabia warns of disastrous consequences—all supporting safe-haven demand.

Year-to-date, gold has risen about 100%, and silver about 150%. Even after Monday’s plunge, the long-term trend remains intact.

Cryptocurrency: Bitcoin breaks $70,000 but then pulls back

On Tuesday, the crypto market was steady, with slight gains.

According to CoinGecko, the total global crypto market cap is about $2.46 trillion, with Bitcoin accounting for 56.9%. Bitcoin briefly broke above $70,000 during the day but then retreated to the $69,000–$69,500 range.

Bitcoin faces resistance near $71,500 from whale sell orders, which is the main short-term obstacle. If it breaks through this level, the next target is $75,000.

Strategic firms have purchased $1.28 billion worth of Bitcoin, bringing total holdings to over 738,000 BTC. Institutional inflows continue to support Bitcoin’s bottom.

Bitcoin shows potential for a short squeeze: negative funding rates and dominant short positions. Historically, extreme shorting often signals a reversal. If shorts are forced to cover, Bitcoin could surge rapidly.

Technical outlook: Bitcoin has been oscillating in the $65,000–$75,000 range for over two weeks. If the war truly ends, oil prices fall, inflation pressures ease, and Fed rate cut expectations rise, Bitcoin could break above $75,000; but if the war persists, markets will remain cautious.

Today’s summary: The war isn’t over, and the market is self-deceiving

On March 11, the Iran-U.S. conflict enters its 12th day, with conflicting signals and self-deception:

U.S. stocks: Dow down 34 points (-0.07%), S&P 500 down 0.21%, Nasdaq up 0.01%, all nearly flat. The market is torn between Trump’s Monday optimism of “war ending” and Tuesday’s White House reality of “Strait of Hormuz not resumed, military escalation.” Chip stocks are the only bright spot, with Nvidia up 1.2%, Micron up 3.5%, and energy stocks leading declines.

Oil: Brent crude down 11.28% to $87.80, WTI down 11.94% to $83.45, with two-day declines exceeding 30%. Trump said “the war is basically over,” but Defense Secretary Hegseth said “the war will not end until the enemy is thoroughly defeated.” Oil remains 25–30% above pre-war levels. Saudi warns that closing the Strait of Hormuz would bring “disastrous consequences.”

Gold: up 2.44% to $5,228, silver up 6.25% to $89.81, fully recovering Monday’s losses. Falling oil prices ease inflation fears, and Fed rate cut expectations rise, maintaining strong safe-haven demand.

Cryptocurrency: Bitcoin briefly broke $70,000 then retreated to $69,000–$69,500, with a total market cap of $2.46 trillion. Facing resistance at $71,500 from whale sell orders, institutional buying of $1.28 billion, and potential short squeeze conditions.

The core contradiction now: Trump says the war is ending, but the Pentagon says it’s not. Who to believe?

Oil prices plummeted from $120 to $83, and the market chooses to believe the president. But the Strait of Hormuz remains closed, Saudi warns of disaster, and the Pentagon insists on defeating the enemy—these facts point to a war far from over.

The market is betting: Trump will end the war quickly through diplomacy. If right, oil prices will continue to fall below $70, and stocks will rebound strongly. If wrong, the war will drag on for weeks, oil prices will rebound above $100, and markets will crash again.

At least today, one fact is clear: the market prefers to believe the president’s optimism rather than the Pentagon’s reality. How long can this self-deception last? Tomorrow’s CPI data may hold the answer.