Wall Street Brief (April 3): US stocks ended Thursday with volatility, as risk appetite turned cautious ahead of the long weekend; oil prices surged again, Nasdaq/small caps narrowly closed higher, while gold/Bitcoin fell

Summary: On Thursday, US stocks saw typical volatile trading ahead of the long weekend. The S&P 500 rose 0.11%, the Nasdaq climbed 0.18%, the Dow Jones Industrial Average fell 0.13%, and the Russell 2000 gained 0.70%. The VIX dropped to 23.87, a single-day decline of 2.73%, but it initially surged to 26.78, indicating that panic has not disappeared, only shifting from extreme tension to high caution. Early in the session, markets were weighed down by Trump's remarks about 'prolonged conflict' and surging oil prices, with some recovery seen towards the close. Meanwhile, Tesla’s Q1 deliveries missed expectations, directly dragging on discretionary consumption and high-elasticity consumer chains. In broader asset classes, the dollar index rose by 0.45%, gold fell by 1.71%, crude oil soared by 13.29% to around $112, and Bitcoin dropped by 1.67% to near $67,000, overall still pointing to a lack of genuine recovery in risk appetite.

I. Major Events

1. Trump did not provide an endpoint for the conflict, oil prices surged again

In his speech on Wednesday night, Trump stated that the US would continue its strikes on Iran but did not provide a clear timeline for the end, prompting markets to once again raise concerns about prolonged conflicts in the Middle East. For the stock market, the pressure does not stem solely from the fact that 'conflict continues,' but more directly from the spike in oil prices: West Texas Intermediate (WTI) oil approached $114 at one point during the session and still closed up 13.29%. Rapid upward movement in oil prices prompts markets to reassess the risks of energy shocks and inflation persistence. As a result, Thursday's early trading resembled a 'contract first, observe later' pattern: reducing risk, compressing valuations first, then observing whether there was capital support at the close.

2. Tesla delivery slowdown hits high-elasticity consumer chains

According to Reuters data, Tesla delivered 358,023 vehicles in Q1, significantly below market expectations, bringing inventory levels and demand absorption capacity back into focus. Tesla fell 5.42% on the day, becoming the weakest among the seven major tech stocks and directly weighing on the discretionary consumption sector. More importantly, this occurred against a backdrop where the market was already cautious, further lowering investor tolerance for high-valuation, high-elasticity assets: once fundamentals fail to meet expectations, capital is more likely to retreat quickly to relatively conservative positions.

3. The index rebounded on a weekly basis, but the foundation for recovery remains fragile.

Another noteworthy piece of information on Thursday was that major indices completed their first weekly rebound since the Iran war. The issue lies in the fact that this round of recovery occurred against the backdrop of high oil prices, VIX still above 23, and an upcoming long weekend, making it seem more like a phase of short-covering brought about by end-of-day support rather than markets entering another tailwind period. While Nasdaq and Russell managed to barely close in positive territory, the Dow still ended lower, indirectly suggesting that risk appetite has not fully reopened.

II. Major Trends

What was even more notable on Thursday was not that the indices barely closed in the green, but that the market remained in a 'short-term repair, medium-term pressure' phase. Over a two-week span, IWM rose by 1.48%, significantly outperforming SPY's -0.33% and QQQ's -1.23%, indicating small caps and high volatility sectors were getting priority rebounds. However, when looking at the past three months, SPY is still down by 3.74% and QQQ by 4.47%, showing the medium-term environment hasn't returned to being favorable. Meanwhile, RSP has outperformed SPY over the same period, and SPYV continues to lead SPYG, meaning capital structure still favors equal-weight and value over big tech dominance. In other words, Thursday’s rebound looks more like localized repair rather than a definitive switch in style leadership.

III. Market Sentiment

The keyword for market sentiment remains 'unsettled but not spiraling further out of control.' VIX closed at 23.87, retreating by 2.73% from the previous day, but surged to as high as 26.78 during early trading, indicating that as long as oil prices and war expectations continue to rise, the market could quickly revert to defense mode. The CNN Fear & Greed Index only moved from 14 to 15, remaining in the extreme fear zone, while the Put/Call ratio increased from 0.938 to 0.9544, showing no decline in demand for protective hedging. Taken together, these metrics suggest that while there is some buying support, the market is reluctant to prematurely shift from caution to optimism with high oil prices and a long weekend looming.

IV. Market Scan

1. Index ETFs

Major index ETFs continued to show a structure where 'high volatility sectors slightly outperform while traditional heavyweights remain weaker.' IWM rose by 0.69%, making it the best-performing core index ETF of the day; SPY gained 0.09%, roughly corresponding to the late-day recovery in the broader market; QQQ climbed 0.11%, barely staying in positive territory; while DIA fell 0.09%, finishing last once again. This corresponds to the four major indices, suggesting the market hasn’t fully turned bullish—there’s just marginally better support for small caps and technology over traditional blue chips.

2. Sector Performance

Sector-level divergence was clearer than index movements. Real estate rose 1.61%, making it the strongest sector of the day, reflecting some recovery in interest-rate-sensitive and high-elasticity sectors. Discretionary consumption fell 1.50%, becoming the weakest sector, vividly illustrating the drag caused by Tesla’s sharp drop on the consumer chain. Combined with gains of 0.80% in tech, 0.50% in utilities, and 0.53% in staples, Thursday wasn’t simply about 'adding risk' in one direction—it showed part of the funds returning to high-elasticity sectors while others remained in defensive plays.

3. Seven tech giants

Strength among the Magnificent Seven also diverged. Netflix rose 3.25%, leading the group, while Microsoft gained 1.11% and NVIDIA added 0.93%, showing AI and platform-heavy names still had some support. On the other hand, Meta fell 0.82%, Google dropped 0.15%, and Apple edged up just 0.11%, closer to weak recovery overall. Most concerning was Tesla's 5.42% drop, with delivery misses amplifying market concerns about the high-elasticity consumer chain. In short, while the tech sector didn’t weaken across the board, it was far from signaling a uniform return of risk appetite.

4. Chinese Equities

Chinese ADRs underperformed overall, failing to keep pace with the U.S. market’s late-day recovery. Bilibili rose 0.70%, one of the few names to stay in positive territory, while JD.com fell 1.42%, becoming the weakest name on the whitelist. Alibaba and PDD Holdings also declined by 1.36% and 0.89%, respectively. This suggests the recovery in Chinese ADRs lacks consistency, with capital still cautious toward China’s internet assets. Compared to the more synchronized recovery seen at the end of March, Thursday felt more like isolated resistance rather than a re-emergence of independent momentum.

5. Cryptocurrencies

Bitcoin closed near $67,000, falling 1.67% on the day, with its price offering no clear signal on risk appetite. Among related stocks, MARA surged 8.33%, indicating ongoing speculative interest in high-elasticity mining stocks, but MSTR dropped 2.40%, showing the lack of unified upward movement within the sector. Overall, amid dual constraints of the long weekend and high oil prices, capital participation in the crypto space remained selective, with weaker linkage among related stocks compared to earlier phases of risk recovery.

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

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