Author: Shenchao TechFlow
U.S. stocks: Quarter-end settlement day, with Q1 invoices coming due for everyone.
On Tuesday, the calendar turned to March 31, marking the end of the first quarter of 2026.
As of the close on Monday, March 30, the S&P 500 stood at 6,343, down more than 7% for the quarter and over 9% below its January peak, nearing correction territory. The Nasdaq has already entered correction, and the Dow Jones officially entered correction last Friday—the first time since the Fed’s aggressive rate-hiking cycle began in 2022 that both the Dow and Nasdaq have fallen into correction simultaneously. The Russell 2000 small-cap index fared even worse, closing at 2,414 with a correction depth exceeding 12%. The S&P 500 has now posted five consecutive weekly declines, the longest such streak since 2022.
The year-end "window dressing" effect should have provided some support, as fund managers tend to rebalance their portfolios at quarter-end, selling underperformers and buying winners to create an attractive-looking holdings profile. But this quarter, the very term "winner" was contentious: energy and defense stocks rose, at the expense of tech and consumer stocks, which plummeted. The stocks locked into managers’ "best holdings" were often oil shares that outperformed the market, rather than Nvidia and Microsoft.
This distorted internal structure was clearly outlined in Monday’s market action. The Dow Jones rose only 49.5 points (+0.11%), supported by Wells Fargo, JPMorgan Chase, and energy companies; the S&P 500 fell 0.39%, and the Nasdaq dropped 0.73%, with the technology sector once again acting as the drag. Micron plunged 9.7% in a single day, illustrating how the chip sector is being slowly worn down by this conflict: Google’s computational efficiency algorithms and uncertainties in semiconductor supply chains due to the Strait of Hormuz blockade have turned even the most favored AI hardware stocks into nervous, skittish assets. The technology sector’s 50-day moving average has now fallen below its 200-day moving average, forming a “death cross,” marking five consecutive months of declines—the longest such streak since the dot-com bubble burst in September 2002.
One more quote worth archiving from Monday: Fed Chair Powell, during a speech at Harvard, explicitly stated that Fed policy is “in the right place” and inclined to “look through” this supply-side shock. He said, “By the time the full effects of monetary tightening are felt in the economy, this oil price shock will likely already be over—and tightening further at that point would be inappropriate.” This was a textbook dovish statement—but the market reacted with further declines, as oil prices continued to climb, with WTI holding above $102.88 and Brent above $108.
Powell's "look-through" and oil prices' "failure to look-through" are the most insoluble contradictions in this quarter-end market.
Today, major data and earnings releases coincide: the Consumer Confidence Index (March) and JOLTS Job Openings (February) will be released during trading hours, while Nike will report earnings after the close—this is the only major earnings release among Dow components this quarter and the first post-war financial check-up for a consumer giant. Wall Street’s consensus estimates: EPS of approximately $0.29, down about 46% year-over-year, and revenue of around $11.2 billion, roughly flat compared to last year. Against a low base, the impact of supply chain disruptions in Vietnam and India due to the Hormuz blockade will be a key variable in management’s commentary.
Morgan Stanley’s assessment deserves separate mention: ahead of the quarter-end, the bank downgraded global equities to "neutral" while upgrading U.S. Treasuries and cash to "overweight." The rationale? "Uncertainty regarding the scale and duration of oil supply disruptions has made the outlook for risk assets increasingly asymmetric"—a statement in the most restrained language possible from a top Wall Street institution, conveying its most pessimistic forecast.
Gold and Oil: Oil Prices Remain Elevated at Quarter-End, While Gold Rebounds in Counter-Trend
Oil price: $103; war premium remains intact
WTI crude oil closed on Monday at $102.88 per barrel, while Brent crude traded in the range of approximately $108 to $109, both reaching new interim highs since the outbreak of the Iran conflict. The catalyst was a new escalation over the weekend: Houthi forces in Yemen launched missiles at Israeli and U.S. military targets, and Iran attacked a tanker passing through Kuwaiti waters at night—the latter directly triggered a fresh surge in futures prices during Monday’s trading session.
Looking at the data, the total cost of this war on oil prices: WTI was around $57 at the start of the year and has since risen by approximately 80%. This is the biggest market story of the quarter.
A noteworthy macro perspective: Economists have noted that the current global supply contraction is as severe as the OPEC oil embargo during the 1973 Arab-Israeli War. The IEA has characterized this crisis as "the most severe global energy security challenge in history."
Gold: Seeking conditions for another takeoff amid the oil-inflation chain
Gold rose approximately 1.4% on Monday, trading in the range of $4,542 to $4,544, leaving behind its low of $4,100.
Gold’s structural situation remains complex: on one hand, it faces pressure as the dollar strengthens amid rising inflation expectations; on the other, demand driven by geopolitical conflicts and continuous central bank accumulation has never disappeared. Overall, gold declined by approximately 17% in March—the worst monthly drop since 1983—but this followed a record high of $5,600. At the end of the quarter, gold still posted positive returns for the quarter and remains one of the top-performing major assets this year, aside from energy stocks.
Cryptocurrency: Bitcoin has stabilized after falling, but the quarter-end financials are equally disappointing.
Bitcoin closed Monday at approximately $66,727, briefly rebounding to around $67,747 during the day, but posted a dismal quarterly performance, declining over 30% from its年初 high of approximately $97,000, officially becoming the worst-performing major asset class this year.
An unexpected signal arrived at the end of the quarter: Strategy paused Bitcoin purchases for the first time this week, ending a 13-week streak of continuous buying during the most intense week of the conflict. This is not necessarily a bearish signal—it could simply be an internal operational adjustment—but the timing of this pause is particularly noteworthy, coming just after Bernstein declared that "the bottom is in."
Bitcoin's trajectory throughout Q1 reflected a complex internal logic: it initially plunged alongside all risk assets at the onset of the war, then rebounded in certain phases, demonstrating a degree of "geopolitical crisis resilience." However, under the macroeconomic environment where interest rate expectations shifted toward hikes, it ultimately could not escape the gravitational pull of liquidity dynamics. Global crypto market capitalization contracted by approximately 25% during Q1 to around $2.5 trillion, with the Fear & Greed Index remaining near 25 (extreme fear).
Throughout Q1, the primary pressure on the crypto market was not a single crash, but a persistent expectation of liquidity tightening—when the Fed’s next move shifted from "rate cuts" to "possible rate hikes," all risk assets were repriced.
Today's summary: The end of the first quarter of the war—how will history record these 32 days?
March 31, 2026: End of Q1
U.S. stocks: The S&P 500 fell more than 7% for the quarter, with the Dow and Nasdaq entering correction territory; the technology sector posted its longest consecutive monthly decline since 2002, lasting five months, while the VIX remained above 30. This quarterly decline occurred almost entirely over the 32 trading days following the U.S.-Israel joint strike against Iran on February 28.
Oil/Gold: WTI crude oil rose from approximately $57 to $102 over the quarter, an increase of about 80%, representing the most direct transmission channel of war impacts on the global economy; gold retreated from its historical high of $5,600 to around $4,500, posting a positive quarterly return but suffering a monthly loss of approximately 17% in March—the worst monthly decline since 1983.
Cryptocurrency: Bitcoin fell over 30% for the full quarter, becoming the worst-performing major asset in Q1, but has since recovered from its recent low of approximately $62,800 and is now trading steadily in the $66,000 to $68,000 range.
The market is now focused on only one question: Will Trump actually press the button when April 6 arrives?
April 6 is the latest deadline set by Trump, at which point he will face a choice between striking Iran’s energy infrastructure or extending the deadline again if the Strait of Hormuz remains closed. Both outcomes carry market costs: the former implies oil prices surpassing $130 and a real risk of recession; the latter means further erosion of Trump’s negotiating credibility, as markets begin to seriously price in a scenario of prolonged blockade.
No one knows which path will be chosen. All we know is that the first quarter has ended, and the cost of those 32 days is etched into the K-lines of every asset class.