The US-Iran conflict heats up, causing a sharp decline across all US stock markets. Brent crude oil surpasses the $100 mark, triggering inflation concerns.

Thursday, March 12, Eastern Time: U.S. stocks fell across the board, with the three major indexes down by at least 1.5%. After Iran’s newly appointed supreme leader, Mujtaba Khamenei, issued his first statement, Iran said it would continue to take strategic measures, including the blockade of the Strait of Hormuz, and carry out attacks on U.S. military bases in the Middle East. By now, hopes for a rapid end to the Middle East war have faded, while oil prices keep surging, sparking worries about inflation. Combined with a sharp increase in redemption pressure in the U.S. private credit market, both U.S. stocks and U.S. Treasuries fell hard.

【U.S. Stock Indexes】

At the close, the S&P 500 fell 1.52% to 6,672.62; the Dow Jones fell 1.56% to 46,677.85; the Nasdaq fell 1.78% to 22,311.98.

According to reports from China Central Television and Xinhua News Agency, on March 12 local time, Iran’s supreme leader Mujtaba Khamenei issued his first statement since taking office as supreme leader, providing a systematic account on issues including the direction of national development, the regional situation, and how to respond to external challenges.

Mujtaba Khamenei said clearly that Iran will continue to take strategic measures, including the blockade of the Strait of Hormuz, and open new fronts if necessary. In a statement delivered via Iran’s national television, he said: “We have already studied other fronts that are lacking in the enemy’s experience and are extremely easy to attack. If a wartime condition continues and it is consistent with national interests, these fronts will be activated. Of course, the measure of blocking the Strait of Hormuz must continue to be used.”

He also said that all U.S. military bases in the Middle East should be shut down immediately, or else these bases will be attacked. “We believe in being friendly with neighboring countries, and we will only strike enemy bases. We will have to continue doing this.”

At the time the statement was released, the international oil benchmark, Brent, rose, ultimately closing up by about 10% and rising above the $100 level for the first time since August 2022. The resulting inflation concerns also led traders to no longer fully price in a rate cut by the Federal Reserve in 2026.

The International Energy Agency (IEA) warned that the Iran war is causing the largest-ever scale of oil supply disruption, intensifying concerns about inflation pressure rising. Goldman Sachs, meanwhile, warned that if Strait of Hormuz throughput remains under pressure throughout March, Brent crude could surpass the all-time high set in 2008, when it had peaked at as high as $147.50 per barrel.

In response to the continuously soaring oil prices, White House press secretary Karoline Leavitt said on Thursday that the Trump administration is considering temporarily exempting implementation of the century-old Jones Act to ensure that energy and agricultural products can be freely transported among U.S. ports. The act allows foreign vessels to carry cargo between U.S. domestic ports, in an effort to suppress oil prices. U.S. Energy Secretary Chris Wright said the U.S. Navy can at the fastest begin escorting oil tankers through the Strait of Hormuz by the end of March.

Some analysts said: “The market has already realized that the timeline for resolving the Middle East conflict may be pushed back further. Right now, the market sentiment is to sell first and only consider fundamentals later. Apart from the energy sector, there are hardly any truly safe sectors.”

In addition to the energy shock, new signs of stress are emerging in the $1.8 trillion private credit market, becoming another major factor dragging down U.S. stocks. The banking sector fell overnight, with Morgan Stanley and Goldman Sachs down more than 4%. Morgan Stanley and private credit funds under Cliffwater LLC saw a surge in redemption requests and were forced to limit withdrawals. Deutsche Bank disclosed that its exposure to the industry amounts to $30 billion.

【U.S. Treasuries】

U.S. Treasuries were sold off, pushing yields even higher. The benchmark 10-year Treasury yield closed at 4.263%, while the 2-year Treasury yield, which is sensitive to Federal Reserve policy rates, closed at 3.745%.

【Popular U.S. Stocks】

Among popular U.S. stocks, Nvidia fell 1.54%, Apple fell 1.94%, Google A fell 1.67%, Google C fell 1.69%, Microsoft fell 0.74%, Amazon fell 1.47%, TSMC fell 5.00%, Meta fell 2.55%, Tesla fell 3.14%, AMD (Advanced Micro Devices) fell 3.46%, and Intel fell 5.69%.

On key news, Alphabet is working on what it says is its biggest upgrade to its Maps product in more than a decade. The company rolled out a new feature called “Ask Maps” in Google Maps, letting users interact with the app the same way they would talk to a chatbot.

In the most recent quarter, Microsoft and Meta added nearly $50 billion in data center leasing commitments each, to support the development of artificial intelligence. Including Oracle and Amazon, the world’s largest cloud computing companies have already exceeded $700 billion in total commitments for future data center leasing.

【Global Indexes】

In European markets, the UK FTSE 100 edged down 0.47% to 10,305. The French CAC 40 edged down 0.71% to 7,984. The German DAX edged down 0.21% to 23,590.

In Asian markets, the Hang Seng Index edged down 0.70% to 25,717. The H-share index edged down 0.06% to 8,700. The Nikkei 225 fell 1.04% to 54,453.

【China Indexes】

On March 12, overnight Hang Seng Tech Index futures fell 0.51%, Nasdaq China Golden Dragon Index fell 1.02%, and the FTSE China A50 Index fell 0.35%.

【Chinese Concept Stocks】

Among popular Chinese concept stocks, Tencent Holdings (HK) fell 1.00%, Alibaba fell 1.52%, PDD fell 1.28%, NetEase rose 0.88%, Baidu fell 1.59%, Trip.com fell 0.33%, Li Auto fell 2.52%, XPeng rose 3.55%, and NIO rose 1.10%.

【FX and Commodities】

On Thursday, with investors still maintaining caution about the Middle East conflict, the U.S. dollar index fell first and then rose, kicking off gains before the U.S. trading session and coming close to the 100 level. It ultimately closed up 0.51%, at 99.739, marking a third straight session of strength.

Driven by a stronger dollar and worries that inflation will cause global central banks to slow the pace of rate cuts, spot gold fell throughout the pre-U.S. session, and London gold ultimately closed down 1% at $5,080 per ounce. Spot silver tracked gold lower; London silver ultimately closed down 0.82% at $83.91 per ounce.

Due to attacks on tankers in the Gulf region and warnings from Iran, crude oil surged strongly during the day and again edged up toward $100. WTI opened sharply higher and continued climbing during the European session, ultimately closing up 10.44% at $96.36 per barrel; Brent crude closed up 10.62% at $101.75 per barrel (futures settlement price).

【Highlights】

Middle East situation escalates: multiple drone attack incidents erupt in Dubai; oil prices break above the $100 mark

According to Xinhua News Agency, on March 11, two drones crashed near Dubai International Airport, injuring four people. Institutions including Goldman Sachs and Citigroup urgently evacuated personnel, and more than 46,000 regional flights were canceled. Affected by the paralysis of the Strait of Hormuz, countries including Saudi Arabia were forced to cut production, and Brent crude briefly broke above $101.50. Models predict that if the closure lasts for three months, the peak oil price could approach $164.

Iran says several of Trump’s tweets can’t end the war

On March 12 local time, the secretary of Iran’s Supreme National Security Council, Larijani, said when discussing U.S. President Trump’s remarks that he “must win this war quickly” that starting a war is easy, but ending it cannot be done through a few tweets. Larijani said that once a war begins, ending it is not something that can be achieved easily. He also emphasized that Iran will never easily let the other side off the hook.

The market no longer expects the Fed to cut rates this year for sure! Trump urges Powell to cut rates immediately: don’t wait until the next meeting!

On Thursday, the 2-year U.S. Treasury yield skyrocketed, and traders no longer believe the probability of a single Federal Reserve rate cut in 2026 is 100%. In a social media post that day, Trump wrote: “Where is Powell, the Fed chair, who is always too late today? He should cut rates immediately, not wait until the next meeting!” The Middle East conflict has pushed up oil prices and threatens global supply chains. U.S. consumers’ dissatisfaction with the cost of living is rising continuously, which is not favorable for the Republican Party’s outlook for maintaining control of Congress in the November midterm elections.

Nvidia splashes out $26 billion to build an AI model—directly challenging OpenAI

Nvidia announced that it will invest $26 billion over the next five years to develop open-source large models, formally transforming from a hardware giant into an end-to-end AI company. The newly released Nemotron 3 Super has 128B parameters, and in combined scoring it scored 37 points, surpassing OpenAI GPT-OSS’s 33 points. This move deeply ties its own hardware ecosystem through an open-source strategy. While challenging labs such as OpenAI, it further solidifies its absolute leadership position in the AI compute market.

Google adds AI Q&A features to its software

Alphabet is rolling out what it calls the biggest upgrade to its Maps product in more than a decade. The company launched a new feature called “Ask Maps” in Google Maps, enabling users to interact with the app as if they were talking to a chatbot. In an official blog post, Miriam Daniel, Vice President and General Manager of Google Maps, said: “We combine the latest global maps with our most powerful Gemini model to make exploring maps effortless and convenient, and through the largest navigation upgrade in more than a decade, the experience becomes more intuitive than ever.”

Microsoft and Meta push data center leasing scale soaring to $700 billion

In the most recent quarter, Microsoft and Meta added nearly $50 billion in data center leasing commitments each, to support the development of artificial intelligence. Including Oracle and Amazon, the world’s largest cloud computing companies have already exceeded $700 billion in total commitments for future data center leasing. These future leasing commitments (including facilities such as data centers, offices, or warehouses) will be paid in installments over a 15–19 year term.

Amazon’s $54 billion bond offering gets wildly oversubscribed

The bank responsible for selling Amazon’s corporate bonds this week delivered a clear message to investors: in a world that is becoming increasingly difficult to predict, the company is a relatively safe investment. On Tuesday, Amazon issued $37 billion in bonds in the U.S. across 11 tenors. Orders from asset management institutions reached as high as $126 billion, close to a historical record. On Wednesday, the company also issued bonds in the euro market for the first time, with a size of €14.5 billion (about $16.8 billion), setting a record for the largest corporate bond issuance in the euro market. John Servidea, co-head of investment-grade debt capital markets at lead underwriter JPMorgan, said Wall Street banks have been advising companies that the current environment is one where a “window could open quickly and close quickly.”