Wall Street Daily (April 1): US stocks surged violently on Tuesday, as the market shifted from defense to 'growth + risk recovery'; heavyweight tech stocks rebounded across the board, but safe-haven demand has not completely subsided

Summary: US stocks rebounded across the board on Tuesday, with the S&P 500 Index up 2.91%, the Nasdaq Index up 3.83%, the Dow Jones Index up 2.49%, and the Russell 2000 Index up 3.41%; the VIX dropped to 25.25, significantly easing the market's most tense layer of defensive sentiment. As the market re-bets on a phased resolution to the Iran conflict, the decline in oil prices drove a collective recovery in high-elasticity assets, with heavyweight tech stocks rebounding across the board. However, one premise must be understood about Tuesday’s market action: this is short-term risk recovery, not an indication that the medium-term structure has fully returned to 'big tech dominance'. In terms of major asset classes, the US Dollar Index fell by 0.61%, gold rose by 3.48%, crude oil fell by 3.29%, and Bitcoin rose by 2.08%, indicating that safe-haven demand has not completely disappeared, but the focus has shifted back from energy defense to growth-oriented trading and risk recovery.

I. Major Events

1. War risk premium temporarily eases

The dominant pricing factor on Tuesday was still the market's expectation of a phased resolution to the Iran conflict. Trump’s statements on the Hormuz Strait issue leaned towards de-escalation, prompting capital to re-bet that the conflict may not escalate along the worst-case scenario. With the pullback in oil prices, the risk discount that had weighed heavily on technology, small-cap, and Chinese stocks in recent weeks quickly eased, with capital rushing to cover the highest elasticity sectors first, driving a collective rebound in major indices.

2. The AI theme reignites heavyweight tech stocks

In addition to macro-level easing, technology stocks also received more specific industry catalysts that day. NVIDIA expanded its NVLink Fusion ecosystem and increased investments in its partners, reinforcing the market's view that demand for AI infrastructure remains strong. As a result, the technology sector led gains with a 4.24% increase, NVIDIA rose by 5.59%, and Meta and Google also strengthened synchronously, indicating that capital is clearly flowing back into platform-based tech and core AI assets.

3. Improvement in China’s economic indicators supports Chinese stocks

China’s official manufacturing PMI rebounded to 50.4 in March, ending two months of contraction and marking the strongest performance in a year. While this does not determine the direction of the S&P, it serves as an independent catalyst for Chinese stocks. Baidu, Futu, Bilibili, and PDD Holdings all rose between 3% and 5% on the day, showing that Chinese stocks were not merely following the recovery sentiment of U.S. equities but were also driven by their own improving fundamentals.

II. Major Trends

A key premise of Tuesday's trading is that this represents short-term risk recovery, not a complete mid-term shift back to 'single-leader dominance by big tech.' Over a two-week period, QQQ still fell by 4.21%, and MAGS dropped by 5.22%, suggesting this was more of a correction after overselling rather than crowded growth trades regaining absolute dominance.

From a three-month perspective, the market’s original structure has not been overturned by one day’s rebound. IWM rose by 0.93% during the same period, outperforming SPY’s 4.37% decline; RSP also gained 0.62%, surpassing SPY, indicating that breadth remains solid. In terms of style, SPYV only fell by 0.03% over three months, significantly outperforming SPYG’s 8.12% drop, demonstrating that value remains the relative winner year-to-date.

Therefore, a more accurate interpretation of Tuesday’s activity is not that 'the market now only loves tech,' but rather that 'after war-related trades subsided, capital first flowed back into high-elasticity sectors that had been previously suppressed.' As long as oil prices do not spiral out of control again quickly, this recovery may continue, but whether the market truly shifts back to growth dominance in the medium term still depends on subsequent macro and geopolitical variables.

III. Market Sentiment

Tuesday saw clear sentiment recovery, though it is far from optimistic territory. The VIX fell to 25.25, plunging 17.51% from the previous day, indicating that some of the most extreme risk-aversion pressures have been alleviated. However, levels above 25 still indicate elevated volatility, and the market retains caution toward tail risks.

The CNN Fear & Greed Index rose from 14 to 15, remaining in the extreme fear zone; the CBOE Total Put/Call Ratio increased from 0.7865 to 0.9024, showing that while capital chased rebounds, protective measures were simultaneously being added. Over a three-month timeframe, RSP outperformed SPY, indicating decent underlying market breadth, which made the quality of the rebound better than a pure short squeeze. However, sentiment-wise, it is too early to say the market has fully escaped danger.

IV. Market Scan

1. Index ETFs

Index ETFs across the board recovered, with IWM leading at a 3.50% gain, followed by QQQ rising 3.39%, SPY up 2.91%, and DIA increasing by 2.46%. This suggests that as oil prices retreated and war-related trades cooled, capital prioritized small-cap and tech recovery, while traditional blue chips also rose but with the weakest elasticity.

2. Sector Performance

Sector-wise, the technology sector led the rally, with XLK rising 4.24%, directly driven by the recovery of the AI chain and a counterattack by major tech names. Industrial and consumer discretionary sectors, which had previously faced significant pressure, rose by 3.27% and 3.14%, respectively, while the communication services sector gained 2.69%, and the financial sector rose by 2.09%, indicating that the rebound was not concentrated in a single track. In contrast, XLE fell by 1.13%, becoming one of the few逆势 sectors, primarily because energy trades, which benefited the most from the earlier oil price surge, began to see profit-taking as crude oil prices retreated.

3. Seven tech giants

The seven major tech stocks showed strong recovery overall, with Meta leading the pack by rising 6.67%, followed by NVIDIA up 5.59%, Google up 5.02%, Tesla up 4.64%, and Microsoft and Netflix rising 3.12% and 3.42%, respectively. Apple increased by 2.90%, showing the least elasticity in this group. Overall, after the AI-driven rally reignited, platform-based tech companies once again became the main engine driving the index rebound.

4. Chinese Equities

Chinese概念股 performed quite uniformly that day, with Baidu leading the way at a 4.52% increase, Futu up 4.10%, Bilibili rising 4.01%, PDD Holdings gaining 3.82%, Alibaba increasing by 2.85%, JD.com up 2.18%, and KWEB rising 2.34%. Only Tencent Music slightly dropped by 0.32%. China's PMI returning to expansion territory in March was an important support for this group of assets to keep up with global risk recovery.

5. Cryptocurrencies

Bitcoin was recently quoted at approximately $68,172, with a daily increase of 2.08%. After risk appetite recovered, Bitcoin’s price and related concept stocks resumed their correlation. Coinbase surged 8.60%, significantly outperforming MicroStrategy's rise of 2.77%, indicating that capital is more inclined toward high-elasticity trading platforms rather than merely passively following. The performance of crypto-related assets further confirmed that Tuesday's market focus was on the recovery of high-elasticity assets.

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

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