Crude oil continues to rise!

【Briefing】The Fed’s “Beige Book”: U.S. employment is generally steady, prices rise moderately. Crude oil continues to surge

Good morning, everyone! Last night and this morning, there have been many major developments.

All three major U.S. stock indexes closed higher across the board, most large-cap technology stocks rose, and most China concept stocks rose. The Fed’s “Beige Book” said that U.S. employment is generally steady and prices are rising moderately. U.S. oil futures opened higher, and Fed Governor Milyan said that interest-rate cuts should continue in March.

The three major U.S. stock indexes all closed higher

All three major U.S. stock indexes closed higher across the board: the Dow rose 0.49%, the S&P 500 index rose 0.78%, and the Nasdaq rose 1.29%.

Amazon rose 3.88%, Cisco rose 2.42%, and IBM rose 1.91%, leading the Dow.

Most large-cap technology stocks rose

Most large-cap technology stocks rose, and the index of the “Seven Giants” of U.S. technology rose 1.13%.

Amazon rose 3.88%, Tesla rose 3.44%, and Facebook rose 1.93%, leading the “Seven Giants” technology group.

Most China concept stocks rose

Most China concept stocks rose. The Nasdaq China Golden Dragon Index rose 0.8%, and the China concept technology leading index rose 0.58%.

Xiaomi Group rose 4.40%, BYD (002594) rose 1.74%, and NetEase rose 1.32%, leading components in the China concept technology leading index.

Fed “Beige Book”:

Employment is generally steady; prices rise moderately

On March 5, the Fed released the “Beige Book,” saying that the number of districts where activity was level or declining increased from 4 in the prior report to 5 in this report. Over the past several weeks, employment levels have been generally steady, and prices have risen moderately.

Regarding overall economic activity, the “Beige Book” said that among 12 Federal Reserve districts, 7 saw overall economic activity grow at a pace ranging from modest to moderate, while the number of districts reporting flat or declining activity increased from 4 in the prior report to 5 in this report.

Overall, financial services activity was reported to be stable or increasing, with commercial lending as the main area of strength. In most regions that include residential real estate and the construction industry, sales and activity declined slightly, and low inventory and affordability remain key issues. Non-residential construction activity varied across the reporting districts, but net figures increased slightly.

Among the reported districts, agricultural conditions were mostly flat, and energy activity grew moderately overall. Overall, economic expectations are optimistic, and most districts expect modest to moderate growth over the next few months.

On the labor market front, the “Beige Book” noted that over the past several weeks, employment levels have been generally steady, and 7 out of 12 Federal Reserve districts reported that hiring showed no change. Several contacts in some districts mentioned that rising non-labor input costs, weak demand, or uncertainty about overall economic conditions are reasons for employment levels staying level or declining. Some districts and companies in different industries are seeking to use artificial intelligence or other forms of automation to improve efficiency. Most of them emphasized that the goal is to increase productivity rather than to replace workers.

In most districts, wages increased at a moderate or modest pace, because companies compete for talent in specific areas, including the technology sector. A few districts continued to report that total compensation faces upward pressure due to rising health insurance premiums.

As for prices, the “Beige Book” said that over the past several weeks prices rose moderately: 8 districts reported moderate price increases, and 4 districts reported modest or moderate growth. Many districts reported that costs for a range of non-labor inputs rose, including insurance, utilities, energy, metals, and other raw materials.

Nine districts mentioned that tariffs caused costs to increase. Some companies continued to pass through the higher costs related to tariffs to customers, while other companies started doing so after absorbing the earlier increases. Even so, most districts reported that some companies kept their selling prices stable despite rising costs because their customers are becoming increasingly sensitive to prices. Overall, businesses expect the pace of price increases to slow somewhat in the near term.

U.S. oil futures main contract opens higher

On March 5, the main U.S. oil futures contract opened higher and at one point jumped 2.05%.

On March 4, the main U.S. oil contract closed up 2.08% at $76.11 per barrel; the main Brent contract rose 1.36% to $82.51 per barrel. Tensions in the Middle East remain high, and shipping through the Strait of Hormuz continues to be paralyzed, with Middle East oil and natural gas supplies continuing to be disrupted.

Data from the U.S. Energy Information Administration showed that last week U.S. crude oil inventories increased by 3.48M barrels. Although this was higher than the expected 2.31M barrels, the market is focusing more on supply risks stemming from geopolitics.

Goldman Sachs believes that if the situation where the Strait of Hormuz closes continues for another five weeks, the price of Brent crude could reach $100 per barrel. It also raised its forecast for the average Brent crude price in the second quarter of 2026 by $10 to $76 per barrel, and raised its forecast for the WTI crude price by $9 to $71 per barrel.

China Galaxy Securities (601881) said it expects the Brent crude price in March to trade in a range of $75 to $90 per barrel, with short-term focus on oil and gas targets with high dividend yields.

U.S. President Trump announced insurance for offshore crude oil transport, and if necessary, naval escort would be provided. According to Iranian media outlet 4 on the 4th, Iran has identified several candidates for the highest leader, who will soon be selected among them.

Local time on March 4, White House press secretary Caroline Leavitt said at a press briefing that the “Epic Rage” operation launched over the weekend is mainly intended to: destroy Iran’s ballistic missiles and their production system, target Iran’s naval forces, undermine Iran’s proxy armed groups in the Middle East, and ensure that Iran cannot obtain nuclear weapons.

She said that as of now, U.S. forces have struck more than 2,000 targets, destroying large numbers of missiles, launch platforms, and drones, and sinking more than 20 Iranian vessels, including a submarine.

Fed Governor Milyan: Cut rates should continue in March

Fed Governor Milyan said that a 1 percentage point rate cut this year is appropriate.

He said it is suitable to continue cutting rates at the March meeting, and the outlook has not been changed due to the outbreak of the conflict with Iran.