MARKET SNAPSHOT
U.S. stocks moved higher for a second straight day. Oil prices resumed their ascent as more energy infrastructure came under attack in the Middle East. Treasurys gained a bit of ground, sending yields lower. The U.S. dollar weakened. Gold prices rose, while silver settled lower.
MARKET WRAPS
EQUITIES
Stocks moved higher as investors set aside some of the new worries around Iran. The Nasdaq composite rose 0.5%, while the S&P 500 rose 0.2% and the Dow industrials advanced 0.1%. Energy shares were among the strongest performers, with Exxon Mobil up 1%.
Traffic at the Strait of Hormuz remains largely paralyzed amid attacks on vessels as the war between Iran and the U.S. continued. Most recently, a tanker was struck by a projectile off the coast of Fujairah, where a key oil-exporting hub that bypasses the Hormuz passage was also struck.
President Trump meanwhile lashed out at NATO allies over their reluctance to support U.S. efforts in Iran. In a social-media post, the president said that the U.S. had already decimated Iran's Navy and Air Force and no longer needed help from NATO, Japan, Australia or South Korea.
Asian markets ended mostly lower after opening broadly higher on Tuesday.
A rebound in U.S. artificial-intelligence stocks overnight and upbeat guidance from AI chip giant Nvidia spilled over into the Asia session, sending technology-related names higher. However, the prolonged Middle East conflict and energy supply shortage continue to weigh on investor sentiment.
In China, stocks ended lower. The Shanghai Composite Index fell 0.9%, while the Shenzhen Composite and the ChiNext Price Index slipped 1.9% and 2.3%, respectively.
Hong Kong's Hang Seng Index rose 0.1%.
Japan's Nikkei Stock Average trimmed 0.1%, while South Korea's Kospi ended 1.6% higher.
In Australia, the S&P/ASX 200 Benchmark Index added 0.4%, and New Zealand's S&P/NZX 50 Index gained 0.1%.
COMMODITIES
Light crude oil futures settled up 2.9% to $96.21 a barrel, with traders continuing to react to the flow of war headlines and new damage to energy infrastructure in the Middle East.
Strikes hitting the Majnoon oil field in Iran and a gas field in the UAE caused those operations to suspend production.
"Two weeks plus into the Second War In Iran, the Iranians continue to disrupt oil and gas infrastructure despite constant U.S. and Israeli pressure from the sky," said Robert Yawger of Mizuho Securities USA.
Oil posted its second-highest close this year, having risen in 11 out of the past 13 sessions.
Brent crude finished up 3.2% to $103.42 a barrel.
Front Month Comex Gold for March delivery gained $7.00 per troy ounce, or 0.1%, to $5001.00. Front Month Comex Silver for March delivery lost 73.30 cents per troy ounce, or 0.9%, to $79.530.
TODAY'S TOP HEADLINES
The Fed Keeps Getting Hit With New Shocks in Its Yearslong Inflation Fight
It's happening again.
For the fifth year running, Federal Reserve officials find themselves expecting inflation to fall back to their 2% goal only to be confronted with another disruption that complicates the path. First it was the pandemic's aftershocks. Then, Russia's war in Ukraine. Last year, a sweeping tariff program.
The most recent data suggested inflation progress stalled even before America's war in the Middle East disrupted one of the world's most important shipping routes. The turmoil could send up energy and commodity prices in ways that could further delay reaching the target.
Chinese Economy's Bright Start Masks Uneven Growth as External Risks Loom
China's economy got off to a solid start this year but that momentum may prove hard to sustain as the world's largest oil importer navigates the conflict in the Middle East and continued pressures at home.
Data on Monday showed retail sales got a lift over January-February thanks to the extended Lunar New Year holiday, while industrial production rebounded on surging exports. Fixed-asset investment meanwhile improved after a decline last year.
Still, economists caution that underlying domestic demand is weak and growth is likely to soften across the board in March as the holiday boost fades.
Fund managers increased their cash reserves at the outset of war by the most since COVID emerged
Fund managers are becoming less enthusiastic and increased their holdings in cash by the fastest rate since the advent of the pandemic in March 2020, a new survey released Tuesday found.
The March instalment of Bank of America's global fund manager survey revealed a slump in investor sentiment to a six-month trough, though it's still well above the low from April when President Donald Trump announced sweeping tariffs. The decline in sentiment coincided with a notable jump in cash levels with respondents to the survey reporting an increase from February's 3.4% to 4.3% as of last week.
World Bank Embraces Industrial Policy, Abandoning Three Decades of Stigma
The World Bank Tuesday confessed to an error of more than three decades duration, moving to embrace industrial policy as tariffs, subsidies and a variety of other interventions become increasingly popular with governments in search of growth.
Back in 1993, the bank published an assessment of the rapid economic growth achieved by some economies in east Asia, and which appeared to owe something to government interventions in support of selected industries.
The bank controversially concluded that their economic success had nothing to do with those interventions, which it instead described as a "costly failure."
Oil Prices Rise. Trump Says U.S. Doesn't Need Help on Iran, After NATO Allies Say No
Oil prices were rallying Tuesday as Iran stepped up its attacks on energy infrastructure in the Middle East and President Donald Trump said U.S. allies in the North Atlantic Treaty Organization have declined to help with the Iran war and securing the Strait of Hormuz.
Brent international futures climbed 3.2% to $103.42 a barrel and West Texas Intermediate futures were 2.9% higher at $96.21 a barrel.
The benchmarks were clawing back their losses from Monday as fresh strikes by Israel and Iran fueled traders' fears about disruption of crude flows out of the Middle East.
Arizona Sues Predictions Platform Kalshi on Illegal Gambling Charges
Arizona sued the parent companies of Kalshi, a startup prediction platform, on Tuesday for operating what the state said was an illegal gambling business without a license.
Arizona Attorney General Kris Mayes accused Kalshi of accepting bets from residents on sports, elections and events in violation of state law. Arizona doesn't allow unlicensed wagering businesses and bans elections betting, Mayes said. The state charged the company with 20 counts of illegal betting and wagering.
"No company gets to decide for itself which laws to follow," Mayes said.
Airlines Offer Glimpse Into Operations as Middle East Conflict Weighs on Fuel Prices
Major carriers are offering a first look into how they are planning to outpace the rising cost of jet fuel as uncertainty continues to linger in the Middle East conflict.
Shares of Delta Air Lines were recently up 5% at $63.88 while American Airlines rose 4.3% to $10.91 in premarket trading Tuesday.
Earlier, Delta said it is looking to maintain capacity flexibility to weather the threat of fuel prices remaining elevated. The airline raised its revenue target for the first quarter of the year to reflect an acceleration in consumer and corporate demand trends into March, adding that it is well positioned to navigate the current environment of higher fuel costs.
Mastercard Splashes Up to $1.8 Billon in Bet on Blockchain Future
Payment companies are preparing for a world where your transactions are in digital tokens.
Mastercard on Tuesday said it would acquire stablecoin-infrastructure company BVNK for up to $1.8 billion, giving the company access to infrastructure that underpins transfers of the digital currency.
The deal will give Mastercard the ability to link its vast payments-processing network, the pipeline that connects customer money to merchants they want to pay, directly with stablecoins, a type of cryptocurrency pegged to traditional fiat like the U.S. dollar.