Wall Street Briefing (March 31): US stocks showed divergent trends on Monday as the market continued to trade on 'high oil prices + high uncertainty'; traditional blue chips/financials remained relatively stable, while technology/small caps stayed under pressure.

Summary: The US stock market showed a mixed performance on Monday, with the S&P 500 Index down 0.39%, the Nasdaq Index falling 0.73%, the Dow Jones Industrial Average slightly up 0.11%, and the Russell 2000 Index dropping 1.46%; the VIX fell to 30.61, down 1.42% for the day, but remained in the high range, indicating that defensive sentiment had only shifted from extreme tension to high volatility, without being fully resolved. The market was still dominated by one main theme: the war has not reached a clear resolution, continuing to trade on 'high oil prices and high uncertainty.' On the trading board, traditional blue chips and financials performed relatively better, while tech and small caps continued to face pressure, suggesting funds were still reducing positions in high-duration and high-volatility sectors. In major asset classes, the US Dollar Index rose 0.29%, gold climbed 0.35%, crude oil surged 3.79%, and Bitcoin gained 1.40%. Overall, Monday wasn't a full-blown panic, but rather the market continuing to reduce risk structurally under the assumption of 'higher oil prices.'

I. Major Events

The dominant pricing factor on Monday was still just one main theme: the war has not found a clear resolution. Trump, on one hand, urged Iran to quickly reach an arrangement, while threatening to expand strikes on key infrastructure; at the same time, Gulf allies privately advised him against stopping too soon. Iran denied any direct negotiations. For the market, these statements collectively point to one thing: the conflict is not showing signs of significant de-escalation, and remains in a phase of high noise and high uncertainty.

Against this backdrop, the trading focus naturally returned to 'higher oil prices and prolonged uncertainty.' Crude oil rose another 3.79% on Monday, and risk appetite continued to be suppressed. The market's reaction also leaned more structural: the Dow slightly increased, financials remained relatively stable, but tech and small caps continued to face pressure, with funds actively reducing positions in high-duration and high-volatility sectors.

II. Major Trends

By Monday, the key issue of this round of adjustments was no longer how much the indices had fallen, but the continuous reinforcement of defensive pricing. With high oil prices and high uncertainty persisting, fund allocation favored shorter duration, lower volatility, and lower valuation directions. Looking at the past five trading days, the pressure did not remain confined to single-day sentiment shocks but continued to accumulate at the index level: SPY’s two-week decline expanded from -4.00% as of March 27 to -5.28%, while QQQ widened from -5.24% to -7.01%. Structurally, large tech-related exposures saw deeper drawdowns, with MAGS’ two-week fall expanding from -7.49% to -9.02%; meanwhile, XMAG widened from -2.43% to -4.01%, indicating weakness was not concentrated solely among leading tech stocks but selling pressure was spreading to broader non-leading large-cap weights.

When observing from a style perspective, SPYG’s two-week drop widened from -6.21% to -8.11%, whereas SPYV only expanded from -1.97% to -2.63%, further clarifying the trend of growth under pressure and value relatively outperforming. On a daily basis, finance rose 1.15%, technology fell 1.86%, and industrials dropped 1.63%; over three months, IWM outperformed SPY (-3.22% vs -7.76%), and SPYV significantly outpaced SPYG (-2.73% vs -12.48%). Taken together, Monday’s divergence was not a random fluctuation but a continuation of the recent trend of 'weaker tech, value outperformance, and defensive rotation.'

III. Market Sentiment

Sentiment remained tight but seemed more like a 'pullback from elevated levels' rather than 'further loss of control.' The VIX fell to 30.61, indicating some easing of the sharp rise in panic seen in the previous session; however, remaining above 30 itself still indicates a high volatility zone, and the market is far from a comfortable state. The CNN Fear & Greed Index dropped from 14 in the previous session to 9, re-entering the extreme fear zone, showing that subjective risk appetite hasn’t significantly recovered. In options markets, the Put/Call ratio rose to 0.7865 on March 30, higher than the previous session’s 0.7544, indicating rising demand for protective hedging. Overall, the current environment remains one of sustained defensiveness amidst high volatility.

IV. Market Scan

1. Index ETFs

Major index ETFs continued to diverge, with traditional blue chips remaining the most stable. DIA rose 0.15%, making it the strongest among major index ETFs, while IWM fell 1.44%, remaining the weakest. SPY fell 0.42%, and QQQ dropped 0.87%, indicating both large caps and tech were under pressure, but small caps and high-elasticity areas were the ones seeing sustained reductions. Monday felt more like continued risk appetite contraction rather than one-sided panic selling.

2. Sector Performance

Sector rotation became clearer. The financial sector rose 1.15%, becoming the strongest sector, while the technology sector fell 1.86%, and the industrial sector declined 1.63%, both under pressure. This combination shows that amid higher oil prices and greater uncertainty, the market preferred more resilient sectors like finance while continuing to avoid technology and cyclical manufacturing.

3. Seven tech giants

The divergence within the Magnificent Seven continued. Meta rose by 2.03%, making it the strongest performer in the group, while Tesla fell by 1.81%, remaining the weakest. Although not all tech giants made it onto the day's anomaly list, the two-week performance of MAGS has dropped to -9.02%, indicating that the unwinding of crowded trades in big tech is not yet over; Monday merely widened the gap between strong and weak performers.

4. Chinese Equities

Chinese concept stocks still lack a clear independent trend. JD.com rose by 0.84%, showing relative stability, while Bilibili fell by 2.87%, experiencing the deepest pullback. Overall, Chinese concept stocks are more driven by global risk appetite and shifts in growth style rather than individual fundamental events.

5. Cryptocurrencies

The divergence within the crypto sector is greater than the surface numbers suggest. Bitcoin rose by 1.40%, with its price rebounding; however, COIN still declined slightly by 0.22%, and RIOT plummeted by 7.58%. This indicates that funds have not fully returned to high-volatility crypto-related stocks despite the price recovery. For the market, this 'Bitcoin up, mining stocks down' structure also suggests that the recovery in risk appetite remains fragile.

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

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