Over 110,000 people have been liquidated! Trump will soon withdraw from the Iran conflict.

Risk appetite rebounds!

On Wednesday evening Beijing time, the U.S. stock market continued its upward trend. As of the time of this report, the Nasdaq is up more than 1%. Chip stocks rallied across the board, with the Philadelphia Semiconductor Index surging more than 3% and Micron Technology and Intel each rising more than 8%.

European stocks also jumped broadly. The STOXX 50 index in Europe rose 2.65%, Germany’s DAX30 rose 2.56%, France’s CAC40 rose 1.86%, and the UK’s FTSE 100 rose 1.41%.

Cryptocurrencies also moved higher across the board, with Bitcoin up nearly 3% and Ethereum up nearly 4%. According to CoinGlass data, in the past 24 hours, the entire cryptocurrency market saw a total of $350 million liquidated in futures contracts, with 114,500 liquidation accounts. More than six-tenths of the liquidations came from short positions.

Regarding the situation in Iran, on April 1 local time, U.S. President Trump said the U.S. military would “very soon” withdraw from the Iran conflict. He also said that Iran had “just requested a ceasefire from the United States,” but only if the Strait of Hormuz is opened would the U.S. “consider” it.

On the same day, Iran’s Islamic Revolutionary Guard Corps said the situation in the Strait of Hormuz is under the Islamic Revolutionary Guard Corps Navy’s “firm, absolute” control, and it would not open the strait to Iran’s “enemies.” In addition, according to a report by Iran’s state television today (April 1), Iranian Foreign Ministry spokesperson Baghaei said Trump’s earlier social media statement about a so-called “Iran new administration president’s request for a ceasefire” is entirely baseless fake news. So, where exactly is the situation in Iran headed?

Broad-based rally

On Wednesday, the three major U.S. stock indexes continued to rise. As of the time of this report, the Dow rose 0.60%, the Nasdaq rose 1.13%, and the S&P 500 rose 0.70%. In the prior trading day, major indexes logged their largest single-day gains in nearly a year, driven by remarks from U.S. President Trump hinting that the Middle East conflict would end quickly.

Chip stocks strengthened again. As of the time of this report, the Philadelphia Semiconductor Index jumped more than 3%. Intel rose 8.46%, Micron Technology rose 8.18%, Marvell Technology rose more than 7%, Applied Materials and ARM rose more than 4%, and Lam Research, ASML, and Kioxia Semiconductor all rose by more than 3.50%.

Large-cap tech stocks also climbed across the board: Google rose more than 2%, NVIDIA, Tesla, Amazon, and Facebook rose more than 1%, Apple rose 0.33%, and Microsoft rose 0.37%.

On the news front, according to CCTV News, on April 1 local time, U.S. President Trump said the U.S. would withdraw from Iran “very soon” (amid the conflict), but would carry out “pinpoint strikes” if needed. Trump said U.S. military action had made Iran “unable to possess nuclear weapons,” and he added that after withdrawal, if the situation changes, the U.S. could still re-engage.

When discussing NATO, Trump expressed strong dissatisfaction, accusing the alliance of failing to support the U.S.’s goals on the Iran issue, and said the U.S. is “absolutely” considering pushing for the U.S. to withdraw from NATO.

Trump also said there is no clear timeline for when the Iran war will end, but the U.S. would not stay long-term.

The day before, both Trump and U.S. Secretary of State Rubio said the Iran war might be nearing its end. This suggests the U.S. could conduct direct talks with Iran’s leadership and could also gradually end the conflict without reaching an agreement. On Wednesday, Trump also said on social media that Iran had “just requested a ceasefire from the United States,” but only if the Strait of Hormuz is opened would the U.S. “consider” it. Trump is scheduled to deliver a nationwide address at 9:00 p.m. Eastern Time on Wednesday.

UBS Global Wealth Management analysts said: “Although signals of willingness to negotiate are positive, obstacles remain until the conflict truly ends. Restoring energy transportation may take longer. If the conflict suddenly ends but the status of the Strait of Hormuz remains unclear, energy prices may also stay high for a longer time.”

Participants in the currency market currently believe there is zero chance the Federal Reserve will cut interest rates this year. The reason is that concerns about energy-driven inflation sparked by the Iran war have made the rate outlook unclear. Previously, the market expected two rate cuts.

Jay Woods, chief market strategist at Freedom Capital Markets, said: “The market will still closely watch news related to oil prices and the situation in the Middle East. Tensions in the region have been fluctuating, and market trends will move accordingly.”

Wolf von Rotberg, equity strategist at Bank J Safra Sarasin, said: “Since the start of the Iran war, the correlation between Brent crude prices and global stock markets has been unusually strong. This indicates that in order to bring global stock markets back to their previous highs, the Strait of Hormuz needs to reopen and oil prices also need to fall significantly. Declaring that risks are lifted now may still be too early.”

Crypto rises; more than 110,000 liquidations

The rebound in risk appetite is also reflected in the cryptocurrency market, which has strong speculative characteristics.

On Wednesday evening, Bitcoin’s intraday gain at one point exceeded 3%, and the price at one point neared $68,800; Ethereum at one point rose more than 4%, and the price at one point broke above $2,150. As of the time of this report, Bitcoin is up 2.90% to $68,500, Ethereum is up 3.90%, and Cardano, XRP, and Solana are up more than 3%.

According to CoinGlass data, in the past 24 hours, there were 114,500 liquidation events worldwide in total, with a total liquidation amount of $350 million. Of that, $215 million were liquidated from short positions, and $135 million from long positions.

Bitcoin rose cumulatively 2.2% in March, marking its first monthly gain since last September. This has led some market participants to be optimistic that crypto assets may be emerging from the “crypto winter” that began with the price crash in October last year. In March, U.S. ETF funds recorded $1.2 billion in net inflows, providing support for Bitcoin and ending four consecutive months of net outflows.

Rachael Lucas, an analyst at BTC Markets, said Bitcoin needs to hold its price in the $70,000 to $72,000 range to build investors’ confidence. “The market has gotten used to policy swings over the past 12 months,” she said. The price action in Bitcoin shows the issue: even with large swings in the stock market under Trump’s comments, Bitcoin has still been trading in a narrow range.

Ryan Rasmusson, research director at Bitwise Asset Management, is more optimistic about the outlook. He said, “Once the headwinds from geopolitics and the macro level dissipate, we believe the multi-year bullish momentum brought by institutional adoption and clearer regulation will push Bitcoin to set new all-time highs.” He said that after five consecutive months of decline, the positive price action in March indicates investors are beginning to realize this, and Bitcoin is about to break out of the crypto winter.

(Editor: Zhang Yang HN080)

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