Wall Street Daily (March 18): US stocks edged higher on Tuesday, with the oil price rebound failing to weigh on the market; small caps and tech continued to outperform as the market shifted from mechanical risk aversion to structural positioning

Summary: US equities extended their recovery on Tuesday, with the S&P 500 up 0.25%, Nasdaq rising 0.47%, Dow Jones gaining 0.10%, and Russell 2000 advancing 0.67%; the VIX fell to 22.37, down another 4.85% in a single day, indicating that the most intense defensive sentiment continued to ease. The most notable aspect of the day was not the magnitude of gains but that the stock market wasn't weighed down again despite a 2.22% rebound in oil prices, showing stronger resilience to energy disruptions. Internally, the market diverged significantly: Google continued to strengthen, while Tencent Music plummeted after earnings were released, signaling that capital is more focused on expectation gaps rather than simply chasing sector beta. In major asset classes, the US dollar index fell 0.26%, gold slipped 0.06%, crude oil rose 2.22%, and Bitcoin dropped 0.60%. Overall, it's still premature to call a full recovery,更像是在“谨慎不变”的底色下，把交易重心从统一避险切换为结构性选择。

I. Major Events

1. Oil prices resumed their rise, but US stocks were not dragged down simultaneously

The biggest change in the market on Tuesday was that the rebound in oil prices did not trigger another collective pullback in stocks. Previously, the market often interpreted rising energy prices as an immediate sign of inflationary pressure and contracting risk appetite, but this time, despite a 2.22% increase in crude oil, all four major indices closed in the green, suggesting traders are starting to accept the reality that 'high oil prices will continue to fluctuate.' For the market, this means that the most vulnerable phase may be passing, and sensitivity to shocks is beginning to decline.

2. Tencent Music plunges after earnings report, pricing logic for Chinese stocks evolving

Tencent Music released its Q4 and annual results on the same day, with revenue, online music income, and profits all maintaining growth. The board also approved an annual cash dividend, and the numbers on paper weren’t bad. However, the stock ultimately plunged 24.65%, showing that under high expectations, capital preferred to treat the earnings report as a profit-taking opportunity rather than continue revising valuations upward. This signal is significant: the pricing logic for Chinese stocks is shifting from 'sector-wide sentiment-driven moves' to 'individual settlements based on catalysts and expectation gaps.'

II. Major Trends

The core trend on Tuesday was a shift in how the market prices risk. Despite crude oil rebounding by 2.22% that day, the four major indices still closed higher collectively, indicating that the mechanical link of 'rising oil prices = falling stock markets' is loosening. In terms of style, technology and small caps continued to outperform, with the Nasdaq rising 0.47% and the Russell 2000 climbing 0.67%, both stronger than the Dow's 0.10%. This suggests that risk budgets are expanding towards more elastic areas. It is worth noting that this recovery is mainly occurring at the short-term level; over a two-week horizon, QQQ has turned positive from negative, signaling a rebound. However, over a three-month horizon, RSP still outperformed SPY (2.64% vs 0.20%), and SPYV outpaced SPYG (1.62% vs -1.06%), showing that the medium-term structure remains biased towards breadth and value rather than reverting to the dominance of a few growth-heavyweights.

III. Market Sentiment

Market sentiment continued to recover but is far from optimistic. The VIX fell to 22.37, dropping another 4.85% from the previous day, indicating that protective hedging is still receding. Nevertheless, this level is not low, as the market has merely shifted from being tense to cautious and has not returned to a comfort zone. The CNN Fear & Greed Index dropped from 22 to 21, further suggesting that subjective sentiment has not improved in tandem, and funds are engaging more in trading rather than rebuilding confidence. Over a three-month horizon, RSP continuing to outperform SPY shows that the breadth foundation remains solid; the Put/Call ratio staying in a high range indicates that defensive positions have not been fully withdrawn. The overall state resembles 'cautious incremental buying,' closer to structural game-playing rather than a full return of risk appetite.

IV. Market Scan

1. Index ETFs

Index ETFs extended their mild recovery, with QQQ leading the pack by rising 0.49%, while DIA only increased by 0.13%, relatively lagging behind. This indicates that capital is still prioritizing growth sectors over traditional blue chips. Meanwhile, the Russell 2000 rose by 0.67%, outpacing both the S&P and the Dow, reflecting that risk budgets continue to spread towards small caps, and the market's trading focus is no longer just about holding onto heavyweight stocks.

2. Sector Performance

In sector performance, XLE climbed 1.05%, becoming the leading sector directly benefiting from the oil price rebound. However, the strength in energy did not bring the market back into defensive mode; instead, the healthcare sector XLV fell by 0.91%, lagging behind. In other words, Tuesday was not a risk-off day characterized by 'collective strength in defensive sectors.' Instead, it saw energy performing strongly while other sectors diverged based on their individual logics, making the market structure appear more complex than the index surface suggests.

3. Seven tech giants

Within the seven major tech giants, performance was mixed. Google rose by 1.64%, continuing to play the role of leader among large-cap tech firms, showing that investors are still willing to pay for leaders supported by solid fundamentals and AI narratives. On the other hand, Netflix dropped by 0.88%, falling behind during this growth recovery day. Such a combination also hints that while there is still demand within the tech sector, it has shifted from broad-based gains to selective buying.

4. Chinese Equities

Chinese tech stocks were among the most sharply divided areas of the day. Bilibili surged 4.45%, buoyed by institutional bullishness and AI-driven advertising logic, becoming one of the strongest Chinese tech names. Meanwhile, Tencent Music plummeted 24.65% after its earnings report landed, a classic case of 'selling the news.' Despite being in the same Chinese tech sector, their divergent performances point to a common shift: capital is no longer measuring all targets with the single yardstick of 'Chinese tech sentiment,' but rather focusing more on whether event catalysts can materialize and whether expectations are overly optimistic.

5. Cryptocurrencies

Bitcoin's latest quote reflected a 0.60% drop for the day, indicating that the coin itself wasn't strong. However, some related concept stocks remained locally active. CRCL rose by 5.15%, continuing to benefit from valuation expansion in stablecoins and payment chains, significantly outperforming the coin itself. MARA, on the other hand, only edged up by 0.11%, nearly treading water, showing that mining stock elasticity hasn't been ignited simultaneously. The current crypto space behaves more like a thematic stock driver rather than a full return of risk appetite where both coins and stocks rise together.

$NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $Bitcoin (BTC.CC)$ $BTC/USD (BTCUSD.CC)$ $Ethereum (ETH.CC)$ $ETH/USD (ETHUSD.CC)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

1M Views