S&P 500 index falls for second consecutive day, energy stocks surge, Oracle (ORCL.US) rises over 9%

Wednesday, investors continued to focus on the Middle East situation, with the three major indices opening higher and then falling back. The S&P 500 and Dow closed lower. The S&P 500 declined for the second consecutive trading day. U.S. core inflation for February showed a slight decrease from the previous month, indicating easing price pressures before any potential war with Iran. However, concerns over the Iran conflict may amplify Americans’ worries about affordability.

【U.S. Stocks】At the close, the Dow fell 289.24 points, or 0.61%, to 47,417.27; the Nasdaq rose 19.03 points, or 0.08%, to 22,716.13; the S&P 500 declined 5.68 points, or 0.08%, to 6,775.8. Oil stocks gained strength, with Occidental Petroleum (OXY.US) up 4%, ConocoPhillips (COP.US) and Chevron (CVX.US) up over 2%, and Oracle (ORCL.US) up over 9%. The Nasdaq Golden Dragon China Index closed down 0.77%, with Li Auto (LI.US) up 3%.

【European Stocks】Germany’s DAX 30 fell 294.12 points, or 1.23%, to 23,641.20; the UK FTSE 100 dropped 58.98 points, or 0.57%, to 10,353.26; France’s CAC 40 declined 15.55 points, or 0.19%, to 8,041.81; the Euro Stoxx 50 decreased 40.72 points, or 0.70%, to 5,796.45; Spain’s IBEX 35 fell 91.10 points, or 0.52%, to 17,353.90; Italy’s FTSE MIB dropped 407.19 points, or 0.90%, to 44,794.50.

【Asian Markets】Nikkei 225 rose 1.43%, KOSPI increased 1.4%, while the Jakarta Composite Index declined 0.69%.

【Cryptocurrency】Bitcoin rose 1.5%, trading at $70,763.6; Ethereum gained over 2.1%, at $2,071.91.

【Crude Oil】NYMEX April light crude futures rose $3.80 to close at $87.25 per barrel, up 4.55%; London Brent crude futures for May delivery increased $4.18 to $91.98 per barrel, up 4.76%.

【U.S. Dollar Index】The dollar index, measuring the dollar against six major currencies, rose 0.41% to close at 99.231. At the New York close, 1 euro was exchanged for $1.1569 (below the previous $1.1644); 1 British pound for $1.3407 (below $1.3460). The dollar traded at 158.89 yen, up from 157.63; 0.7799 Swiss francs, up from 0.7770; 1.3587 Canadian dollars, up from 1.3570; and 9.2301 Swedish kronor, up from 9.1371.

【Metals】Spot gold closed at $5,177.17; spot silver at $85.739.

【Macro News】

U.S. February inflation stabilized as expected, but soaring energy prices may keep March data elevated. The U.S. Labor Department reported Wednesday that the Consumer Price Index (CPI) rose 2.4% year-over-year in February. This was unchanged from January and in line with economists’ expectations. Core prices, excluding volatile food and energy, rose 2.5% YoY, also in line with forecasts. However, since the Iran conflict erupted, U.S. benchmark crude oil futures have been highly volatile, with the average trading price this month around $82 per barrel, compared to about $65 in February. Therefore, inflation data for March could be even hotter. RSM Chief Economist Joseph Brusuelas estimates that, based on experience, every $10 increase in oil prices per barrel raises the Labor Department’s inflation reading by about 0.2 percentage points. While estimates vary slightly among economists, most agree that rising oil prices will push up March inflation. Economists also believe that the current YoY inflation rate is artificially suppressed due to missing housing cost data from October, caused by last year’s government shutdown. This downward bias is expected to disappear in the April inflation report, with the inflation rate then rebounding.

Former Trump officials prepare to announce new trade investigations, possibly to rebuild tariffs. According to an informed source, after the Supreme Court rejected Trump’s tariff plan, the Trump administration is preparing to announce a series of trade investigations on Wednesday, aiming to pave the way for new tariffs on imports. The investigations will be conducted under Section 301 of the Trade Act of 1974, managed by the Office of the U.S. Trade Representative. Reports indicate the investigations will include issues like digital services taxes and currency manipulation. These steps mark a significant move in Trump’s effort to rebuild “tariff barriers,” a core part of his economic policy. On the same day the Supreme Court dismissed his tariff policies, Trump announced plans to invoke another legal basis to impose a 10% temporary tariff on global goods for 150 days. He also vowed to raise the tariff rate to 15%, though this higher rate has not yet been implemented.

Congressional Budget Office: Federal deficit projected at $1.9 trillion for FY 2026. On March 11, the Congressional Budget Office released its budget and economic outlook for 2026-2036. It forecasts the FY 2026 federal deficit at $1.9 trillion, rising to $3.1 trillion by 2036. Relative to the economy, the 2026 deficit will be 5.8% of GDP, increasing to 6.7% in 2036, above the 50-year average of 3.8%. Rising net interest costs are the main driver of the deficit increase.

U.S. average gasoline price hits highest level in over 21 months. On March 11, AAA reported that the average U.S. gasoline price rose to $3.58 per gallon, the highest since late 2021. Gasoline prices increased by 38 cents last week and 64 cents over the past month, marking the largest weekly and monthly increases since March 2022. Current prices are about 22% higher than a month ago. Meanwhile, U.S. diesel prices rose even faster, up 5 cents to $4.89 per gallon, with a weekly increase of 79 cents.

IEA announces release of 400 million barrels from emergency oil reserves, the largest in history. The International Energy Agency (IEA) announced today it will release 400 million barrels from emergency reserves, citing “significant and rising risks” from the Middle East situation. These stocks will come from mandatory reserves held by IEA member countries, which are required to hold at least 90 days’ worth of net imports from the previous year, in the form of crude oil, refined products, or a combination. The latest IEA data shows North American strategic reserves are mainly crude oil, while European and Asian members hold both crude and refined products. By the end of 2025, total oil in IEA member public stocks will reach 1.25 billion barrels, about 30% of OECD’s total oil stocks. This is the sixth emergency release since the IEA’s founding in 1974, and the largest ever.

EU warns: conflict could push inflation in the EU above 3%. The EU warns that if Middle East conflicts keep Brent crude at around $100 per barrel and gasoline prices remain high for an extended period, EU inflation could exceed 3% this year. In such a scenario, economic growth in 2026 could also be impacted. According to an EU official, the inflation rate could be 0.7-1 percentage point higher than the previous forecast of 2.1%, with growth slowing by 0.4 percentage points from the earlier estimate of 1.4%. If inflation rises sharply, the European Central Bank may be forced to raise interest rates. The official also warned that the conflict’s impact on financial markets, trade, and supply chains could further harm the economy.

【Stock News】

Gulman: Apple (AAPL.US) to launch foldable iPhone with iPad-like layout. Tech journalist Gulman reports that Apple’s upcoming foldable iPhone this fall will update iOS to feature a layout similar to iPad. The device will have a built-in foldable display roughly the size of an iPad mini, along with an external screen comparable to a small iPhone display. The internal display will adopt a widescreen aspect ratio, different from the narrow foldable phones currently on the market. Insiders say this will be a key selling point. Apple aims to enhance video viewing experience and make it easier for developers to redesign iPhone apps to resemble iPad software.

Trump to invoke emergency law to aid offshore oil producer Sable (SOC.US). President Trump is preparing to invoke wartime powers under the Defense Production Act to facilitate offshore oil production off Southern California. This unlikely move aims to address global oil shortages triggered by the Iran conflict. An insider says Trump will use the law to override state laws and streamline approval processes for Houston-based Sable Offshore Corp., which plans to restart large-scale offshore platform production in California. Trump faces political pressure to address rising fuel prices before the midterm elections in November, as voter attitudes toward living costs will heavily influence the results.

Meta (META.US) unveils four internal AI chips. Meta announced Wednesday four custom-designed chips for AI tasks, part of its large-scale data center expansion. The first chip, MTIA 300, was deployed weeks ago to support training smaller AI models for core ranking and recommendation tasks. The upcoming chips—MTIA 400, MTIA 450, and MTIA 500—are designed for advanced inference tasks related to generative AI, such as creating images and videos from user prompts.