Wall Street Daily (March 28): US stocks plummeted again on Friday, with the market entering a heightened state of alert, reverting to the logic of 'high oil prices + high volatility + growth under pressure'; oil/gold prices surged while financials/tech weakened

Summary: On Friday, US stocks suffered another significant decline, with the S&P 500 Index dropping by 1.67%, the Nasdaq Index falling by 2.15%, the Dow Jones Index sliding by 1.73%, and the Russell 2000 Index declining by 1.75%; VIX rose to 31.05, surging 13.16% in a single day, with sentiment deteriorating faster than prices themselves; the market is no longer merely 'cautious' but has entered a higher state of alert. The main focus of the market that day was on two key developments: first, the escalation of Middle Eastern conflicts, with oil prices surging by 7.09%, bringing supply risks and reflationary pressures back into the spotlight; second, a drop in the final University of Michigan Consumer Sentiment Index and a rise in one-year inflation expectations, causing investors to associate the impact of war with stagflation fears. In terms of sector performance, energy stocks bucked the trend and rose, while discretionary consumption, finance, and technology sectors faced pressure, with funds continuing to withdraw from long-duration and high-volatility assets. Among major asset classes, the dollar index rose by 0.29%, gold climbed by 3.33%, crude oil jumped by 7.09%, and Bitcoin fell by 3.53%. Overall, Friday was not simply about 'risk-off buying', but rather the market reassessed risk assets based on the framework of 'high oil prices + high volatility + growth pressures'.

I. Major Events

1. Escalation of conflict once again overwhelmed hopes for easing, as markets returned to 'high oil prices + high risk premium' trading.

The most important change on Friday was the expectation of a potential de-escalation earlier this week, which was once again interrupted by stronger signals of escalation. Iran attacked a US military base in Saudi Arabia, injuring American troops, while Israel continued strikes against Iranian nuclear facilities, indicating that the conflict is not subsiding but spreading. For the market, this means that supply and transportation risks are unlikely to cool quickly, and the impact of oil prices may last longer. As a result, the core pricing on Friday was not about 'how much it fell,' but rather investors reintegrated higher oil price assumptions and higher risk premiums into asset prices, leading to a further decline in risk appetite.

2. Weakening consumer confidence and rising inflation expectations confirmed stagflation fears with data.

The second key event of the day was the University of Michigan's final March Consumer Sentiment Index falling to 53.3, with one-year inflation expectations rising to 3.8%. The significance of this data lies not in its standalone ability to alter the course of the conflict, but in how it impacts household expectations: amid high oil prices and market volatility, consumers have grown more pessimistic and sensitive to inflation. In other words, what worries the market now is not just geopolitical headlines but how those shocks are starting to show up in consumer confidence and inflation expectations. For risk assets, the combination of 'weaker growth and rising inflation' is often more challenging and tends to push capital toward defensive positioning.

II. Major Trends

Structurally, although the four major indices fell together on Friday, the market did not experience indiscriminate selling. Instead, it continued to pivot around the theme of 'high oil prices.' On a single-day basis, the energy sector rose against the trend by 1.69%, while discretionary consumption fell by 2.89%, financials dropped by 2.53%, and technology declined by 1.95%. This indicates that capital is more inclined to return to sectors benefiting from rising oil prices rather than continuing to bet on consumption and growth. Over a three-month horizon, IWM still outperformed SPY (-3.14% vs -7.89%), and RSP continued to surpass SPY (-2.78% vs -7.89%), showing that mid-term breadth remains better than the weighted indices. Value style continues to significantly outperform growth, with SPYV outpacing SPYG (-3.10% vs -12.37%). Meanwhile, over a two-week timeframe, QQQ fell to -5.24%, and MAGS dropped to -7.49%, suggesting that crowded trades in large tech are still being unwound.

III. Market Sentiment

The deterioration in sentiment has clearly accelerated faster than price movements themselves. The VIX breaking above 31 signals that the market is no longer merely 'cautious' but has entered a higher state of alert. The CNN Fear & Greed Index dropped from 15 to 10, further sliding into the deep zone of extreme fear, indicating that subjective risk appetite is rapidly weakening. Over a three-month period, RSP continues to outperform SPY, suggesting that the mid-term breadth foundation has not completely deteriorated. However, Friday's trading dynamics showed that capital is prioritizing the reduction of high-valuation, long-duration, and high-volatility positions. The current market condition is closer to 'structural defense centered around war and oil price shocks' rather than pure emotional panic selling.

IV. Market Scan

1. Index ETFs

Major index ETFs weakened across the board, with the main difference being that growth-oriented sectors performed worse. SPY fell by 1.71%, making it relatively the most stable among major index ETFs; DIA dropped by 1.72%, IWM fell by 1.75%, with similar retracement magnitudes; QQQ declined by 1.95%, remaining the weakest. This order shows that Friday was not solely about small-cap selling or traditional weight selling but rather continued prioritization of compressing valuations for growth stocks and long-duration assets.

2. Sector Performance

Sector-level signals were more direct. Energy rose by 1.69%, one of the few sectors that closed positively against the trend; discretionary consumption fell by 2.89%, financials dropped by 2.53%, technology declined by 1.95%, healthcare fell by 1.70%, communication services dropped by 1.63%, and industrials declined by 1.28%. This set of data indicates that the keyword for the day was not 'broad-based decline,' but rather a clearer selection by capital between 'benefiting from high oil prices' and 'pressure on consumption and growth.'

3. Seven tech giants

Within the seven major tech companies, only a few resisted declines while most remained under pressure. Netflix slightly increased by 0.12%, making it the most stable stock; Meta fell by 3.99%, continuing to be the weakest. MAGS dropped by 2.77%, Tesla fell by 2.76%, Microsoft declined by 2.51%, Google fell by 2.49%, and NVIDIA dropped by 2.17%. This suggests that the pressure on big tech has not ended despite recent adjustments, as growth-weighted positions are still being cleared out.

4. Chinese Equities

Chinese internet stocks did not form an independent main narrative for the day, instead largely following the global retreat in risk appetite. NetEase fell by 0.62%, the smallest drop in this group, while Alibaba fell by 2.17%, experiencing deeper retracement. Overall, Chinese internet stocks lack an independent catalyst to counteract global risk contraction, behaving more like passive pressure rather than isolated fundamental deterioration.

5. Cryptocurrencies

The crypto chain continued to face selling pressure in a high-volatility environment. Bitcoin fell by 3.53%, as risk capital continued to exit highly elastic assets; RIOT plummeted by 8.60%, with its decline notably greater than the cryptocurrency price itself, reflecting that the leverage attribute of crypto-related stocks was amplified again on Friday. In contrast to 'oil up, gold up,' the structure of 'crypto down, mining stocks even more down' persisted, indirectly confirming that risk appetite has yet to stabilize.

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

535K Views