Wall Street Daily (March 5): US stocks rebounded across the board on Wednesday, with short-term risk appetite showing a clear recovery. The market shifted from 'prioritizing risk aversion' back to 'risk recovery.' Cryptocurrencies surged, while geopolitical disturbances remain ongoing.

Summary: On Wednesday, US stocks experienced a corrective rebound, with all four major indices closing higher: S&P 500 up 0.78%, Nasdaq up 1.29%, Dow Jones up 0.49%, and Russell 2000 up 1.06%. The trading theme shifted from 'risk aversion first' the previous day to 'risk recovery'. Oil prices did not surge again, and improving employment data drove high-elasticity assets to strengthen first. Over a two-week horizon, short-term momentum began shifting back towards technology and growth sectors. In terms of sectors, consumer discretionary and technology led the gains, while defensive consumer stocks relatively weakened. In broader asset classes, gold rose 0.96%, crude oil increased by 1.75%, the US dollar index fell 0.26%, and Bitcoin surged by 6.33%. Overall, the market is still operating under the backdrop of geopolitical disruptions, but short-term risk appetite has shown significant recovery.

I. Major Events

1. After oil prices stopped surging, equity assets saw corrective recovery

In the previous trading session, the market rapidly elevated risk-aversion pricing around Middle East conflicts. Entering March 4, the marginal pressure from oil price fluctuations eased somewhat, providing breathing room for risk assets. Major US stock indices gradually stabilized after opening, then extended gains, as capital shifted from 'one-sided defense' to 'layered recovery', leading to a recovery in risk appetite.

2. ADP employment data improved, reinforcing the narrative of 'economic resilience'The ADP data released that day showed an increase of 63,000 new jobs in the private sector for February, a significant rise from the previous figure of 11,000. The data makes the expectation that 'growth has not yet lost momentum' more credible. The market’s tolerance for consumption and growth chains subsequently improved, giving risk assets a stronger basis for recovery.

3. Cryptocurrency leads gains as high-beta sectors amplify risk appetite recovery

Bitcoin surged 6.33% on the day, driving a significant rise in related stocks, with COIN jumping 14.57% in a single day. High-elasticity assets led the way, indicating that the day’s rebound was not across-the-board but prioritized areas more sensitive to risk appetite.

II. Major Trends

From a two-week perspective, short-term momentum is shifting back towards technology and growth sectors: QQQ's two-week gain rose to 0.82%, maintaining strength; DIA's two-week performance remained at -1.74%, with a relatively slower recovery pace. From a three-month view, the mid-term structure remains unchanged, with small caps and breadth continuing to outperform: IWM gained 4.30% over three months, RSP rose 6.34%, both outpacing SPY's 0.40%. In terms of style, value still leads growth, as SPYV rose 4.64% over three months, significantly higher than SPYG’s -3.20%. Overall, this looks more like 'risk rebalancing amid high volatility' rather than a trend reversal driven by a single main theme.

III. Market Sentiment

The VIX fell to 21.15, dropping 10.27% in a single day, as panic pricing that had quickly risen the previous day began to ease; the CNN Fear & Greed Index rose to 37 (from a previous 33), reflecting marginal improvement in sentiment from deeper fear levels. It’s important to note that the decline in volatility does not equate to markets returning to a low-volatility state, as geopolitical and policy uncertainties remain underlying constraints. Breadth and options snapshot metrics also indicate that investors’ risk appetite improved compared to the previous day, but defensive hedging has not been fully withdrawn.

IV. Market Scan

1. Index ETFs

At the index level, a repair structure emerged where 'growth outperformed blue chips.' QQQ led the way with a 1.52% gain, while DIA lagged with a 0.46% rise; corresponding to core indices, the Nasdaq’s 1.29% rise clearly outpaced the Dow’s 0.49% gain, showing a clear direction of risk recovery.

2. Sector Performance

Sector rotation favored offensive plays. XLY rose 1.78% to lead the pack, with XLK following closely at 1.70%, showing that consumer and tech sectors were most sensitive to 'economic resilience + recovery in risk appetite'; XLP fell 0.66%, underperforming during the capital replenishment phase.

3. Seven tech giants

Within large-cap tech, further divergence occurred. TSLA rose 3.44% to become the strongest stock of the day, reflecting the elasticity of high-beta recovery; AAPL fell 0.47%, moving against the trend, signaling that even on days when indices rebound, investors are making structural choices within the tech sector.

4. Chinese Equities

Chinese stocks presented a mix of recovery and caution. BILI rose 3.46%, showing active trading as high-elasticity names received replenishment; BABA fell 1.71%, reflecting investor discounting due to ongoing uncertainty around policy and fundamentals. Overall, Chinese stocks are seeing more structural recovery than systemic reversal.

5. Cryptocurrencies

Cryptocurrency assets acted as an 'amplifier' for the recovery in risk appetite during the day. Bitcoin surged 6.33%, and COIN skyrocketed by 14.57%, both significantly outperforming major equity indices; PLTR rose 4.06%, continuing the recovery trend for high-elasticity assets. The performance of this group also indicates that the market prioritizes trading 'elasticity' on rebound days rather than reverting to a 'defensive' stance.

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