[New York Stock Market] Closes Flat Despite Iran Airstrikes... Oil, Gold, and U.S. Treasury Yields Surge

Iranian Revolutionary Guard Blocks Strait of Hormuz

International Oil Prices Surge; Safe-Haven Gold Also Rises

U.S. Treasury Yields Jump Amid Inflation Concerns

As U.S. and Israeli airstrikes on Iran continued for a third day, the New York stock market opened lower across the board on March 2 (local time), but ended mixed as bargain hunters entered the market. News that Iran's Islamic Revolutionary Guard Corps had closed the Strait of Hormuz led to a sharp rise in international oil prices, and gold-considered a safe-haven asset-also finished higher.

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,904.78, down 73.14 points (0.15%) from the previous session. The S&P 500, which focuses on large-cap stocks, finished at 6,881.52, up 2.74 points (0.04%), while the tech-heavy Nasdaq ended the day at 22,748.85, up 80.64 points (0.36%).

International Oil Prices Soar Amid Supply Uncertainty... Defense and Refinery Stocks End Higher

A naval ship sailing in the Strait of Hormuz. Photo by AFP

Following the start of the airstrikes on Iran, near paralysis of traffic in the Strait of Hormuz, and the shutdown of major refinery facilities in Saudi Arabia, international oil prices surged. The May Brent crude futures settled at $77.74 per barrel, up 6.7% from the previous session. During intraday trading, Brent crude at one point soared 13% to $82.37 per barrel, marking the highest level in about a year since January of last year.

April West Texas Intermediate (WTI) crude futures also closed at $71.23 per barrel, up 6.3% from the previous session. WTI briefly jumped 12% intraday to $75.33 per barrel, the highest since June of last year.

Chris Larkin, a representative of E*Trade at Morgan Stanley, stated, "If the energy market stabilizes, there could be positive ripple effects, but concerns over long-term supply disruptions could lead to the opposite outcome."

Just before the market closed, the Islamic Revolutionary Guard Corps announced it would "burn any vessel attempting to pass through the Strait of Hormuz," effectively blockading the strait. The Strait of Hormuz is a strategic chokepoint through which about 20% of the world's seaborne oil passes. If the Strait of Hormuz is closed, a sharp increase in oil prices becomes inevitable.

As a result, there was a clear divergence by sector. Due to the rise in international oil prices from the Iranian airstrikes, defense and refinery stocks finished higher. Notable gainers included ExxonMobil (up 1.10%), Chevron (up 1.62%), Lockheed Martin (up 3.48%), and Northrop Grumman (up 6.30%).

In contrast, airline stocks all fell due to flight cancellations resulting from the closure of Iranian airspace. Delta dropped 1.86%, American Airlines fell 4.36%, and United Airlines declined 3.02%.

Safe-Haven Gold Rises... U.S. Treasury Yields Jump on Inflation Concerns

Since the start of U.S. and Israeli airstrikes on Iran, a strong preference for safe-haven assets was also evident. On the New York Mercantile Exchange, April gold futures settled at $5,311.60 per ounce, up 1.2% from the previous session.

Bill Smead, founder of Smead Capital Management, told Reuters, "Market participants believe that this situation will have only a temporary impact and that issues in the oil market will also dissipate."

U.S. Treasury prices, another global safe-haven asset, actually fell (meaning yields rose). Analysts attributed the investor sentiment to concerns that the surge in oil prices could fuel higher inflation.

According to Investing.com, around the close of the New York stock market, the yield on the 10-year U.S. Treasury note jumped 0.08 percentage points to 4.04% compared to the previous session. The 30-year Treasury yield also rose 0.05 percentage points to 4.68%.

Seema Shah, a representative at Principal Asset Management, analyzed, "Although inflation has eased, it remains above central bank targets. If oil prices continue to rise, it will not only put renewed pressure on consumers but could also delay interest rate cuts."

Looking at major large-cap stocks, technology shares ended higher, with Nvidia up 2.92%, Apple up 0.25%, Microsoft up 1.31%, Tesla up 0.08%, and Meta up 0.62%. In contrast, TSMC fell 1.24%, Alphabet A dropped 1.84%, Broadcom lost 0.73%, Walmart declined 0.47%, and Eli Lilly slid 3.17%.

This content was produced with the assistance of AI translation services.