In the early morning of March 13, the three major U.S. stock indexes fell sharply collectively. The Dow Jones Industrial Average fell more than 700 points, breaking below 47,000 points, a new low for the year. Market sentiment was dragged down by the surge in energy prices and inflation concerns. By the close of trading, the Dow Jones Industrial Average fell 1.56%, the Nasdaq Composite Index fell 1.78%, and the S&P 500 Index fell 1.52%. The banking sector and chip stocks performed weakly.
The core reason for the decline in U.S. stocks is the escalation of the Middle East geopolitical conflict, which pushed up oil prices, intensified inflation expectations, and led to a sharp cooling of Fed interest rate cut expectations. At present, market traders expect the Federal Reserve to cut interest rates by only 24 basis points in 2026, and the yield on the 2-year U.S. Treasury bond rose to about 3.70%. U.S. Treasury Secretary Besant said that the Federal Reserve is still a long way from returning to quantitative easing, and is not worried about the long-term fiscal costs related to the war with Iran.
In terms of Chinese concept stocks, the Nasdaq China Golden Dragon Index closed down 1.04%. Many stocks such as China Jin Medical and Youpin Auto fell by more than 10%, while a few stocks such as Xpeng Motors and Tencent Music rose against the trend. At the same time, the Independent Commission Against Corruption (ICAC) of Hong Kong and the Securities and Futures Commission (SFC) of Hong Kong launched a joint operation to crack down on suspected insider trading and corruption. The involved hedge fund made about HK$315 million in profits by short-selling through leaking confidential information on stock placements, and 6 men and 2 women were arrested.
In addition, the asset scale of U.S. money market funds reached a record high of $7.818 trillion, reflecting the rising market risk aversion; the U.S. Customs and Border Protection is developing a tariff refund system to refund $166 billion in illegal tariffs and interest, which will have a positive impact on the cash flow of related enterprises.
