Wall Street Brief (March 10): US stocks rebounded on Monday with tech and small caps leading the recovery; a sharp drop in oil prices triggered risk recovery, boosting both Chinese stocks and crypto-related sectors

Summary: On Monday, US stocks rebounded after volatility, with all four major indices closing higher: the S&P 500 rose 0.83%, Nasdaq rose 1.38%, Dow Jones rose 0.50%, and Russell 2000 rose 1.12%; the VIX fell to 25.5, down 13.53% in a single day, indicating that the defensive sentiment sharply elevated on Friday eased significantly. The most critical variable of the day was not policy but an abrupt reversal in the direction of oil prices: Trump’s statement that the war with Iran might end sooner than expected, combined with news that the US is considering easing some Russian oil sanctions, drove crude oil prices down sharply, prompting the market to shift from 'defensive de-risking' back to 'risk recovery.' Tech stocks regained leadership amid expectations for NVIDIA's GTC conference, while Chinese stocks and crypto-related sectors also followed suit in recovery. In terms of major assets, the dollar index fell by 0.12%, gold fell by 0.72%, crude oil plummeted by 6.78%, and Bitcoin rose by 3.62%. Overall, this appears more like a technical recovery following the easing of energy shocks rather than risk appetite fully returning to normal.

I. Major Events

1. Oil prices plunged suddenly, completing a reversal in market dynamics

During Monday's trading session, the market rhythm was almost entirely dictated by oil prices. Trump stated that the progress of military actions against Iran was 'already very complete,' and the pace may be faster than initially estimated. Subsequently, Reuters exclusively reported that the US is studying easing some Russian oil sanctions. These two pieces of information successively shifted the trading focus rapidly from 'escalation of Middle East conflict, rising oil prices' back to 'easing supply pressure, cooling oil prices'.

Crude oil prices then retreated significantly, plunging 6.78% on the day. This caused the 'high oil prices + high volatility' logic, which the market had repeatedly priced in last week, to experience its first substantial loosening. As the chain reaction of inflation, costs, and policy constraints temporarily eased, US stocks gradually stabilized from their earlier pressure and ultimately closed with gains. For investors, Monday's change wasn't about sentiment turning suddenly optimistic but rather about stepping back from pricing the worst-case scenario.

2. NVIDIA GTC + improvement in China's inflation data, AI and Chinese stocks take the lead in the rebound

As the macro pressure brought by oil prices eased slightly, the direction of capital recovery was also very clear: buy back the most elastic assets first. In the US stock market, NVIDIA strengthened before the GTC conference, driving the technology sector and Nasdaq's recovery; in the Chinese asset market, February CPI rose to 1.3%, hitting a more than three-year high, improving the market's expectations for domestic demand and policy transmission, with Bilibili, Baidu, and KWEB rebounding in sync. The signal from the market was very straightforward: this was not indiscriminate bottom fishing, but rather 'after oil prices took a breather, risk recovery returned to the high-elasticity main line.'

II. Major Trends

In terms of short-term rhythm, the Nasdaq regained the lead, indicating that the day’s recovery leaned more towards growth and technology: QQQ's two-week performance returned to 1.06%, significantly better than IWM’s -2.64%; however, looking at the single-day rebound magnitude, small caps also kept pace, indicating that risk appetite did not just flow back to a few heavyweights. Over a three-month horizon, the market's main structure has not been completely rewritten, with RSP up 4.73% continuing to outperform SPY’s -0.40%, and SPYV up 3.06% still leading SPYG’s -3.27%, indicating that the medium term remains 'breadth and value dominant.' Therefore, Monday was more like a tactical recovery after the energy shock eased, rather than the market having fully returned to an all-out offensive state.

III. Market Sentiment

The VIX fell back to 25.5, plunging 13.53% in a single day, indicating that the rapidly amplified hedging demand seen on Friday clearly receded, and the market's most tense defensive sentiment took a breather first. However, the absolute value is still above 25, meaning the volatility environment remains high, with sentiment merely returning from 'acute panic' to 'high alert,' far from fully normalizing. The CNN Fear & Greed Index rose from 25 to 27, still within the fear range, only showing marginal sentiment recovery rather than a full return of risk appetite. Considering the simultaneous pullback in crude oil and VIX, Monday's core was not a sudden burst of optimism, but rather the market first retracting the worst geopolitical and inflation trades.

IV. Market Scan

1. Index ETFs

Index ETFs rebounded across the board, but the main line was clear: QQQ led the gains with a 1.34% rise, followed closely by IWM with a 1.09% increase, while DIA lagged relatively with only a 0.56% gain. Corresponding to the market structure, it was the high-elasticity sectors such as technology and small caps, which were hit hardest last week, that were bought back first, whereas traditional heavyweights saw more limited recoveries. The market did not return to one-sided optimism but instead prioritized repairing the assets most exposed to risk after the pressure from oil prices eased.

2. Sector Performance

At the sector level, technology once again took the lead. XLK rose 1.80%, becoming the strongest sector of the day, directly reflecting the repair strength of the AI main line and Nasdaq; XLV rose 1.02%, indicating that relatively stable sectors like healthcare also saw follow-up gains, but it was not the absolute main line. Conversely, XLF fell 0.47%, becoming the weakest sector, indicating that finance did not fully participate in this round of rebound. In other words, Monday was not about 'all sectors strengthening together,' but rather typical of growth sectors recovering first while finance remained cautious.

3. Seven tech giants

Within tech giants, there was a standard 'AI-led rally' structure. NVIDIA rose 2.72%, regaining its role as a sector bellwether under the expectation of the GTC conference; GOOG rose 2.58%, following the narrative of AI and cloud computing. By contrast, NFLX fell 0.71%, becoming the weakest stock during the rebound, showing that funds were not evenly distributed but rather prioritized returning to AI chains with stronger industrial narratives and elasticity. For the tech sector, this kind of recovery was more qualitative, but it also meant the market was still theme-driven.

4. Chinese Equities

Chinese concept stocks saw larger recovery magnitudes and greater elasticity. Bilibili surged 6.04%, becoming the strongest sample, Baidu rose 2.88%, and KWEB increased by 2.79%, all indicating a clear warming of risk appetite in China's internet sector; only Futu edged down 0.14%, lagging relatively within the sector. The logic behind this was not complicated: On one hand, the rebound in China's February CPI improved the market's judgment on domestic demand and policy transmission; on the other hand, after the overall risk sentiment in the US stock market warmed up, Chinese high-beta assets were easier to receive capital replenishment. Market-wise, this looked more like a resonance of 'macro easing + position recovery' rather than being driven by events of a single company.

5. Cryptocurrencies and Related Stocks

Bitcoin rose 3.62%, indicating that highly volatile risk assets regained incremental buying after the synchronous pullback in oil prices and VIX. Among concept stocks, CRCL soared 9.74%, significantly outperforming the broader market, showing that stablecoins and crypto payment chains were among the more elastic branches of this recovery. Compared to last week's situation where 'Bitcoin weakened and negative feedback between cryptocurrency and stocks amplified,' Monday had already switched to the opposite direction: as long as macro pressures eased a bit, the crypto chain often quickly restored its elasticity. Overall, the recovery strength in this direction was strong enough, but essentially still highly dependent on the sustainability of risk appetite.

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