Unusual Calm in U.S. Stocks: Is the Market Waiting or Complacent Amid Iran Risks?

Despite escalating geopolitical tensions in the Middle East over the weekend, the U.S. stock market displayed surprising calm. On March 2, U.S. equities initially reacted with selling pressure at the open but quickly absorbed the shock: stocks rebounded more than 1% from morning lows to close nearly unchanged.

The trading desk at Goldman Sachs provided a more direct market sentiment: investors are downplaying geopolitical volatility, with many puzzling reverse movements observed. Feedback they consistently received indicated that sub-sectors expected to open higher or lower moved in the completely opposite direction.

More notably for investors was the scale of trading activity: markets were unusually quiet. Trading volumes declined, with Nasdaq 100 constituent volume tracking down over 10%. Investors showed reluctance to make significant portfolio adjustments following the intraday rebound, and individual stock trading remained restrained, as if "many were frozen in place."

Sector performance was counterintuitive: technology held up while defensive healthcare slumped. Goldman Sachs' trading department noted that despite the over 1% rebound from morning lows, many perplexing "reverse" movements persisted in the market. Defensive healthcare sectors, traditionally seen as safe havens, experienced sharp declines, while technology and software stocks staged strong rebounds, recovering prior losses. This反常 capital flow puzzled numerous traders.

The index-level recovery was driven by mega-cap technology stocks. The "Magnificent Seven" displayed more defensive characteristics, diverging from the typical "source of funds" logic seen earlier this year. Software stocks surged significantly, recouping all of Friday's declines; SaaS also advanced, extending its recent squeeze-induced rally.

Simultaneously, another seemingly disconnected trend emerged: HALO stocks rose notably even as technology/software sectors strengthened. More strikingly, healthcare became the clear underperformer during a session of heightened geopolitical uncertainty. Goldman Sachs identified this as "the most typical 'reverse move'" - when investors expected defensives to outperform, healthcare instead declined sharply.

From an S&P 500 sector perspective, energy emerged as the day's strongest performer (directly reflecting oil price increases), while consumer sectors (both staples and discretionary) were among the worst performers.

Risk premium first reflected in oil and shipping rates, with Brent crude rising 7%. The most direct asset pricing impact from geopolitical escalation emerged in energy: Brent near-month crude rose approximately 7%, while U.S. Henry Hub natural gas gained 12%. Tanker shipping rates also jumped, with the Breakwave Tanker Shipping ETF (BWET) surging, indicating rapid risk pricing in shipping channels.

Chris Larkin of Morgan Stanley's E*Trade identified oil prices as the market's current "master switch": "There are far more questions than answers right now, but if the energy situation stabilizes, it could create positive ripple effects; if concerns about prolonged disruptions persist, the impact could be opposite."

Notably, oil prices didn't surge unilaterally. Reports indicated crude had retreated significantly from intraday highs.

Bonds priced inflation rather than safety, with 10-year yields briefly exceeding 4.06%. More surprising to investors was the bond market reaction: U.S. Treasuries briefly strengthened after opening, then turned lower and extended declines, with yields rising 9-12 basis points intraday. The 10-year yield climbed from approximately 3.92% at opening lows to reclaim 4.00%, reaching above 4.06% at its intraday peak.

This reversal of "safety not flowing into bonds" was interpreted as traders preferring to bet on conflict-induced inflation attributes rather than immediately fleeing to traditional safe havens; rising oil prices further intensified yield pressure. Reports also noted astonishing upward movement in the "prices" component of that day's manufacturing survey data, exacerbating pricing in this direction.

Meanwhile, despite weaker U.S. Treasuries, the dollar strengthened against major currencies to reach one-month highs (particularly against the euro), indicating some "flight to quality" trading patterns remained. Bitcoin rebounded following typical "sell-first, buy-later" patterns, recovering to $70,000.

JPMorgan Chase: Key question isn't "what happens" but "how long it lasts". However, JPMorgan Chase's commodities team emphasized that "timing" represents the most challenging yet crucial factor when assessing geopolitical crises' impact on oil prices.

Regarding how conflicts transmit to asset prices, JPMorgan Chase identified three key risks: Strait of Hormuz closure potentially pushing WTI above $100 per barrel; external military aid escalation threatening U.S. naval power concentration; and conflict spillover potentially extending strike ranges to U.S. or allied commercial interests.

JPMorgan Chase's commodities team stressed "the most difficult variable is rhythm": previous estimates of 4-5 days have extended to potentially four weeks, with objectives determining duration. Reports indicate U.S. ammunition inventories face pressure from multiple engagements, while regional allies show reluctance to support ground operations, making current actions resemble "surgical strikes" with possible path changes.

They see potential for military confrontation resolution within one month if dialogue occurs with Iran's interim administration, though Congress support for prolonged conflict remains uncertain.

Hormuz: Never truly closed historically, but any disruption sufficient to elevate risk pricing. JPMorgan Chase provided structural facts about the Strait of Hormuz to distinguish between "sentiment" and "sustainable disruption": The narrowest point measures 21 miles, handling approximately 30% of global seaborne crude and 20% of LNG shipments. Multiple Middle Eastern nations depend on this passageway for exports. Despite repeated threats, the strait has never been completely closed, with oil continuing to flow even during major crises. During the 1980s "Tanker War," 259 vessels were attacked yet Gulf exports continued with limited global oil price impact.

These facts point to the same trading logic: what markets truly need time to answer is the severity and duration of disruptions.

History shows: Oil price spikes don't necessarily sink stocks, but "sustainability" determines tail risks. Compiled statistics show WTI crude recorded 22 single-day gains of 10% or more since 2000, with corresponding S&P 500 forward returns not uniformly negative: 1-day average -0.24%; 1-week average +0.52%; 2-week average -0.35%; 1-month average +1.23%.

Goldman Sachs trader Dom Wilson's team offered more conditional judgment: oil price shocks typically negatively impact equities and credit, but only severe and sustained oil disruptions substantially affect global growth. They anticipate cyclical sectors and oil importers facing greater pressure from position adjustments given strong early-year positioning and gains, unless situations resolve quickly.

Combining these clues, current markets appear to be making two-tiered distinctions: at index level, choosing to "see through" short-term shocks while focusing on AI trading, U.S. GDP trajectory, and corporate policy uncertainty; but rapidly repricing interest rates and energy, particularly when yield increase pace combines with oil price rises,更像是交易"reignition of inflation risks."

JPMorgan Chase's further conclusion suggests substantial geopolitical risk may already be priced into equities (with stock pricing above futures strip levels), leading them to advocate restraint toward initial stock market exuberance while warning of potential 1-2 week downward phase for risk assets.