Market risk appetite remains under significant pressure. In early Asia-Pacific trading on March 30, futures for the three major U.S. stock indices collectively experienced a sharp decline. At the time of reporting, Dow Jones futures, Nasdaq 100 futures, and S&P 500 futures all fell by more than 0.50%.
A downturn also hit the cryptocurrency market. During the session, Bitcoin, Ethereum, BNB, and XRP saw declines exceeding 2% at one point, while Solana dropped over 3% and Cardano fell more than 5%. According to data from CoinGlass, nearly $200 million in cryptocurrency futures positions were liquidated within one hour, with long positions accounting for 96% of the liquidations. By the time of reporting, the losses for these cryptocurrencies had partially recovered.
Regarding the latest developments concerning Iran, Iranian Foreign Ministry spokesperson Nasser Kanaani stated that proposals conveyed to Iran by mediators on behalf of the United States were extremely extreme and unreasonable. He further emphasized that Iran must rely on its own capabilities to ensure national security and prevent further attacks from the U.S. and Israel.
Additionally, a spokesperson for the Central Headquarters of Iran's Armed Forces stated on March 29 that the residences of U.S. and Israeli military commanders and political officials would be considered legitimate targets for Iranian strikes. The spokesperson described this as a retaliatory measure for attacks on residential areas in various parts of Iran.
U.S. stock index futures saw a collective drop during the early hours of March 30. Dow Jones futures and Nasdaq 100 futures both declined by more than 0.80% at one point during the session, while S&P 500 futures fell over 0.70%. By the time of reporting, Dow Jones futures, Nasdaq 100 futures, and S&P 500 futures were down 0.58%, 0.65%, and 0.57%, respectively.
International oil prices surged significantly during the session, with WTI crude futures rising more than 3%. At the time of reporting, WTI crude was up 2.76% to $102.39 per barrel, while Brent crude increased 2.32% to $107.76 per barrel.
Matt Maley, Chief Market Strategist at Miller Tabak, commented, "The escalation increases the likelihood that the conflict will last longer than investors anticipate, thereby keeping oil prices elevated. We should expect further weakness in the stock market."
Michael O'Rourke, Chief Market Strategist at JonesTrading, noted, "The global investment community wants to see progress on reopening the Strait of Hormuz. Meanwhile, selling has reached a point where the market requires a liquidation event to stabilize."
Rising gasoline prices due to the conflict pushed the U.S. Consumer Confidence Index for March to a three-month low, while one-year inflation expectations surged. According to the latest Bloomberg monthly survey, economists have raised their inflation forecasts for the U.S. through the end of the year, while downgrading expectations for consumer spending, growth, and employment.
Federal Reserve policymakers are currently weighing the persistence of demand and moderate hiring against the possibility of an unwelcome resurgence in inflation driven by higher energy costs. On Monday, Fed Chair Jerome Powell is scheduled to participate in a moderated discussion at Harvard University, where he may provide insights into how the conflict affects the balance of risks between inflation and employment.
Some international media have pointed out that while the Fed may be signaling caution, the bond market is increasingly pricing in a more hawkish stance from the committee. Last week, the yield on the 10-year U.S. Treasury note (which moves inversely to price) jumped to 4.48%, its highest level since July, as delayed U.S. strikes on Iranian infrastructure failed to ease investor anxiety. On the short end of the yield curve, the two-year Treasury yield climbed to 4% on Friday.
Notably, these short-term yields have diverged from oil prices. After tracking crude oil movements during the initial weeks of the conflict, the two-year yield—often seen as a gauge of expected Fed policy path—has risen more than 30 basis points since the Fed's meeting, while oil prices have remained largely flat over the same period.
Aditya Bhave, Global Research Director and Global Economist at Bank of America Securities, wrote, "Given this divergence between short-term rates and oil prices following the Fed meeting, we believe the market is now anticipating a more hawkish Fed reaction function and potentially a broader commodity shock."
A shift that was difficult to imagine before the outbreak of conflict with Iran is that traders now assign a 22% probability to a 25-basis-point Fed rate hike by the end of 2026.
Iran: U.S. Proposals Deemed Extremely Extreme and Unreasonable
According to a report by the Islamic Republic News Agency (IRNA) on March 29, Iranian Foreign Ministry spokesperson Nasser Kanaani stated in a media interview that proposals conveyed to Iran via mediators on behalf of the United States were extremely extreme and unreasonable.
Kanaani said the U.S. suggestions involved matters related to Iran's national sovereignty and lacked any diplomatic seriousness. He reiterated that Iran must rely on its own strength to safeguard national security and ensure that the U.S. and Israel do not launch further attacks against Iran.
Kanaani emphasized that Iran's military actions are not directed at Arab nations, but solely target U.S. and Israeli military bases and assets used to attack Iran. He stated that this is not a war between the American and Iranian peoples, but a war imposed on the region by the U.S. and Israel, for which the U.S. must bear full responsibility.
Pakistani Foreign Minister Ishaq Dar said on March 26 that indirect negotiations between the U.S. and Iran were being conducted through messages relayed via Pakistan. Regarding a 15-point ceasefire proposal put forward by the U.S., Iran's Tasnim News Agency reported on March 26, citing informed sources, that Iran had formally responded.
Separately, according to a report by Islamic Republic of Iran Broadcasting (IRIB) on March 29, a spokesperson for the Central Headquarters of Iran's Armed Forces stated that the residences of U.S. and Israeli military commanders and political officials would be considered legitimate targets for Iranian strikes.
Furthermore, Majid Mousavi, Commander of the Aerospace Force of Iran's Islamic Revolutionary Guard Corps (IRGC), stated in a social media post that U.S. forces had been compelled to withdraw from certain areas due to frequent strikes on radar networks and logistical systems near Iran's borders.
Mousavi added that several U.S. early warning aircraft and refueling planes had been shot down, and multiple warehouses destroyed, increasing defensive pressures on the American side. He indicated that more high-value targets would be added to the list for future strikes.
Mohammad Aghamiri, spokesperson for the Iranian Army, was quoted by IRNA on March 29 as saying that the core issue between the U.S. and Iran is absolutely not the nuclear issue, but rather matters of Iran's sovereignty and independence.
Aghamiri also noted that during Barack Obama's presidency, Iran and the U.S. reached an agreement on the nuclear issue. However, Donald Trump unilaterally withdrew from the deal during his first term, demonstrating his disregard for laws and commitments.
Aghamiri stated that the Strait of Hormuz has historically been a passage of security and peace, but the malign actions of the U.S. and the "Zionist regime" endanger its safety. He emphasized that the "Greater Israel" project essentially aims to divide regional countries, including Iran, Saudi Arabia, Iraq, and Syria.
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