Hormuz Strait Formalizes Toll, Powell Sends Dovish Signal Amid Ebbing Risk Appetite, US Stocks Open Higher but Turn Lower, Oil Surges 4% Intraday

March 31 – **Fed Signals Dovish Pause** Federal Reserve Chair Jerome Powell struck a dovish tone Monday, saying the central bank’s current policy stance is well-calibrated and it can afford to wait and assess how conditions evolve. While the ongoing energy shock persists, long-term inflation expectations remain stable, and the Fed has not yet determined a response to the latest developments (it still lacks clarity on the shock’s magnitude, making early conclusions premature). Markets reacted by pricing out Fed rate hike bets, with traders now factoring in potential rate cuts later this year. However, Powell’s comments failed to stem U.S. stock weakness. **Middle East Tensions Escalate** U.S. stocks opened higher but reversed lower as Middle East tensions flared: Former President Donald Trump issued new threats to Iran, Tehran rejected U.S. negotiation claims, and Kuwait reported an oil tanker attack. - Trump’s threat: “The U.S. is in serious talks with a new, more rational regime to end military actions in Iran. Significant progress has been made, but if an agreement isn’t reached quickly (which is likely) and the Strait of Hormuz isn’t immediately ‘open for business,’ we will destroy and completely obliterate all of Iran’s power plants, oil wells, and Khark Island (which may include all desalination plants).” - Iran’s response: It maintains it has not engaged in talks with the U.S. since the conflict began. Its parliament also passed a bill imposing tolls on Strait of Hormuz ships (up to $2 million per oil tanker). - Kuwait Petroleum Corporation: A crude oil tanker was attacked by Iran at Dubai Port, driving oil prices higher. **Market Moves** - **U.S. Stocks (close):** Dow +0.11%, S&P 500 -0.39%, Nasdaq -0.73% (Bitget data) - **Oil:** WTI crude surged 4.00% intraday to $105.58/bbl – first time above $100 since July 2022 - **Gold:** Spot gold erased intraday gains to trade at $4,500/oz (after hitting a high of $4,580/oz) - **Asia Stocks (open today):** - South Korea KOSPI: -130.16 points (-2.47%) to 5,147.14 - Japan Nikkei 225: -447.09 points (-0.86%) to 51,438.76 - **Crypto (HTX data, 24h):** - Bitcoin: Briefly topped $68k, now $66,652 (+1.23%) - Ethereum: $2,021 (+1.97%)