As of early morning March 17th Beijing time, all three major U.S. stock indices recorded gains. Investors are closely monitoring the latest developments regarding the conflict involving Iran. Brent crude oil fell below $100 per barrel, while WTI oil prices retreated to under $95 per barrel.
The Dow Jones Industrial Average increased by 377.85 points, or 0.81%, closing at 46,936.32. The Nasdaq Composite rose by 272.55 points, or 1.23%, to reach 22,377.91. The S&P 500 index advanced by 63.21 points, or 0.95%, settling at 6,695.40.
Influenced by a report, Meta's stock price climbed approximately 3%. The report suggested the company plans to reduce its workforce by more than 20%, although the company described the report as "speculative." Additionally, Nvidia's stock price increased over 1% ahead of the opening of its GTC conference on Monday.
Progress in diplomatic efforts aimed at reopening the Strait of Hormuz has alleviated market concerns about a prolonged energy supply disruption.
The CBOE Volatility Index (VIX) declined by 7.4% to 25.17, indicating a significant reduction in recent market fear.
The S&P 500's gain of nearly 1% suggests the market advance is broad-based and not confined to a single sector.
The drop in Brent crude below $100 per barrel is identified as a key driver behind these market movements.
Brent crude fell below $100 per barrel during Monday's early trading after briefly touching $105. WTI crude, which had surged from $71 on March 2nd to $94.65 on March 9th, saw its price at the 99.6th percentile of its range over the past 12 months. The catalyst for this surge was Iran's blockade of the Strait of Hormuz, which severed a critical artery for global oil exports.
This relief rally coincides with the U.S. President threatening to reconsider leniency towards Iranian oil facilities unless the strait is reopened, while his administration prepares to announce the formation of a coalition to escort vessels through the waterway. Iraq has also begun efforts to resume operations on the Kirkuk-Turkey pipeline.
Analysts from Goldman Sachs noted, "The current supply shock appears concentrated in the energy sector," differentiating it from the broader inflationary spike that followed. This assessment is significant because it implies central banks may not need to respond too aggressively, providing room for U.S. stocks to rebound.
Despite Monday's decline, the VIX level of 25 remains substantially above its one-year average of 19, placing it at the 93.8th percentile of its readings over the past year. The index has experienced significant volatility, soaring to 52.33 during the tariff panic in April 2025 before compressing to 13.47 by the end of December. Monday's drop is meaningful but does not erase the sharp increase triggered by recent geopolitical shocks.
The decline in oil prices occurred as the U.S. Treasury Secretary stated on Monday that the U.S. would permit Iranian oil tankers passage through the Strait of Hormuz. Furthermore, U.S. officials indicated that an announcement regarding a multinational coalition to escort ships through the strait is forthcoming, which also contributed to pulling prices down from their highs.
The U.S. President ordered strikes on Iranian military assets on哈尔克岛 last Friday. Although these strikes did not affect oil infrastructure, he stated that the U.S. would consider targeting such facilities if Iran continues to blockade the strait.
The President also told media over the weekend that Iran wants to reach a deal, but he is not yet prepared to do so.
A Wharton School professor commented on Monday: "The market perceives that we hold the upper hand regarding Iran, and that an agreement will be reached, possibly this week. Certainly, significant tail risks remain, but it's fair to say... the market is currently pricing in this possibility."
However, despite the geopolitical tensions, selling pressure in U.S. stocks has been relatively moderate. The S&P 500 is currently only about 5% below the record high it set earlier this year.
The president of Yardeni Research wrote: "The resilience shown by the S&P 500 is attributed to increasingly optimistic consensus earnings per share estimates from industry analysts for 2026 and 2027. Clearly, they have not yet factored in the potential negative consequences of a prolonged conflict and the closure of the strait."
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