March 31 Close: S&P 500 down 0.39%, oil prices rise, WTI crude oil surpasses $100 mark

In the early hours of March 31 Beijing time, the U.S. stocks closed mixed on Monday, with technology stocks falling sharply. U.S. President Trump claimed that the U.S.-Iran negotiations had made major progress. Oil prices continued to climb, and U.S. WTI crude returned to closing above $100 for the first time since 2022.

The Dow rose 49.50 points, up 0.11%, to 45,216.14; the Nasdaq fell 153.72 points, down 0.73%, to 20,794.64; and the S&P 500 index fell 25.12 points, down 0.39%, to 6,343.73.

The market will be closed on Friday for Good Friday, but the March employment report is still scheduled to be released that morning.

U.S. oil prices rose earlier this week. West Texas Intermediate crude oil futures climbed 3% to break above $103 per barrel. Brent crude futures were little changed, trading above $112 per barrel, but were on track to post the largest monthly gain in history.

In comments on Monday, Federal Reserve Chair Jerome Powell said that despite higher energy prices, he believes inflation expectations remain “firmly under control beyond the near term.” While he did say the central bank “may ultimately face the question of how to deal with this situation,” he emphasized that the central bank is “not really facing that yet, because we don’t know what effect the economy will have.”

Powell also said he believes current policy is in a “good position” relative to the current situation, and warned that raising interest rates does not help reduce gasoline prices and could instead cause damage to the economy in the future.

According to the CME Group’s FedWatch indicator, after Powell spoke to audiences at Harvard University, market expectations for the Fed to raise its benchmark fund rate this year fell to 5.5%. Just last Friday morning, the market still expected the likelihood of rate hikes this year to be greater than 50%.

The yield on the 10-year U.S. Treasury fell after Powell’s speech. This benchmark yield was down by more than 9 basis points to 4.344% latest.

The market continues to focus on the U.S.-Iran war situation between the two countries. The crisis sweeping the Middle East has entered its fifth week. On Monday, President Trump warned Iran that if it does not immediately reopen the strategically important Strait of Hormuz, it will face the risk of its oil wells and power plants being attacked.

Trump said that if the strategically important Strait of Hormuz cannot be “reopened” “immediately,” and if no peace agreement can be reached “in the short term,” the U.S. will “completely” destroy Iran’s power plants, oil wells, and Qeshm Island.

It is estimated that about 90% of Iran’s crude oil exports go through Qeshm Island, after which tankers pass through the Strait of Hormuz. The island reportedly has a daily loading capacity of about 7 million barrels.

Earlier, Trump posted on the “Truth Social” platform saying: “The United States of America is having serious negotiations with a ‘more reasonable new regime’ to end our military actions in Iran.”

He said: “The negotiations have made major progress, but if for any reason an agreement cannot be reached in the short term (even though it is likely that one will be reached), and if the Strait of Hormuz cannot immediately ‘open for business,’ we will bring an end to our happy ‘stay’ there by blowing up and completely destroying all of Iran’s power plants, oil wells, and Qeshm Island (possibly including all desalination plants as well!). These are targets that we have so far deliberately not ‘touched.’”

Earlier on Sunday, Trump said that Tehran has accepted most of the “15-point plan” that ends the war with the United States, and that Iran has agreed to allow an additional 20 oil tankers to pass through the strait.

Iran has not responded to Trump’s latest remarks. Reports said that earlier that day, a spokesperson for Iran’s Ministry of Foreign Affairs stated that Iran believes the proposals in the “15-point plan” put forward by the United States are “excessive and unreasonable.” Iran’s leadership has previously denied having direct negotiations with the United States.

Vandanay- Hari, founder of oil market analytics provider Vanda Insights, said: “The market basically no longer considers the prospect of ending the war through negotiations—even though Trump claims he is holding ‘direct and indirect’ negotiations with Iran—and is instead preparing for a sharp escalation of military hostilities. For crude oil, this is a bullish signal, but there is huge uncertainty regarding the timing and nature of the outcome.”

David Roche, a strategist at Quantum Strategy, said that the market is pricing in more and more that the U.S. will take a more aggressive response, including possibly “sending ground forces” and taking action to seize the strategically important export hub of Qeshm Island, through which roughly 90% of the country’s oil is exported.

He warned that such moves would in practice choke off Iran’s dollar income, but could trigger a broader escalation. Tehran is likely to retaliate by attacking key infrastructure in the Gulf region.

Allianz Chief Economic Adviser Mohammed-A.-E.-El-Erian, speaking about stock market sentiment, said: “We still hold this mindset, that it’s temporary, to some extent, yes, there will be a short-term impact, but we should look past it.”

He added that investors also have not factored in the war-induced “very limited policy flexibility” into prices.

“It really is a question mark what the Federal Reserve will do, and we are already facing a 6% deficit,” he continued. “The market has not yet fully realized that if this continues, the space for policy hedging will be much smaller than what we had before.”

In recent weeks, traders have been worried that higher energy prices could harm the economy. El-Erian believes that from an economic perspective, the next critical point will be “physical supply shortages.” On Monday, he said, “If we start to see this in Asia, that will affect the United States.” He continued, “The U.S. is now importing products at higher prices; the question is whether we will also see disruptions in product supply.”

But David Wagner of Aptus Capital Advisors is “not too worried.” He said that a sudden surge in prices “could shake investors’ confidence and raise concerns about inflation, but as the economy and markets adapt, this shock typically fades.”

The head of the equity business said that “the fundamentals remain very strong.” He pointed out that the year-over-year earnings growth rate of the S&P 500 index is “still far above historical growth rates.” He added: “People are trying to portray it as growth panic, but that’s not the case.”

After just experiencing a week of declines, Wall Street has seen the Dow Jones and Nasdaq fall into a correction range. The Dow Jones, the Nasdaq, and the S&P 500 have all fallen for the fifth consecutive week.

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责任编辑：张俊 SF065