Strait of Hormuz, Breaking News! US Military Drops Heavy Ammunition! Retail Investors Suddenly Stop "Buying the Dip" - What's Going On?

Iran Situation: New Developments!

On the early morning of the 18th, Iran’s Supreme National Security Council issued a statement confirming that Secretary Ali Larijani was killed in the airstrike.

According to CCTV News, early morning on the 18th Tehran time, U.S. Central Command announced that hours earlier, U.S. forces successfully used multiple 5,000-pound deep-penetration munitions to destroy Iran’s fortified missile launch sites along the coast near the Strait of Hormuz. The U.S. military stated that these sites’ anti-ship cruise missiles pose a threat to international shipping within the strait. As of now, Iran has not responded.

Additionally, on the 17th local time, Iran’s Islamic Parliament Speaker, Ali Khamenei, posted on social media that the Strait of Hormuz will not return to pre-war conditions. French President Emmanuel Macron also said on the 17th that France will participate in escort operations once the situation in the Strait of Hormuz is calmer.

U.S. President Donald Trump on the 17th expressed dissatisfaction again with NATO allies for not participating in the U.S.-proposed escort operation in the Strait of Hormuz, calling it “disappointing.” Trump claimed that safe passage through the Strait of Hormuz “won’t be too long.” He also said the U.S. is not yet ready to end its conflict with Iran, but “we will leave soon.”

According to foreign media reports cited by CCTV News, the Pentagon is reinforcing forces in the Middle East, with the amphibious assault ship USS LPD-17 “Lafayette” heading toward the region.

On Tuesday, the three major U.S. stock indices surged then pulled back. By the close, the Dow rose slightly by 0.10%, after nearly hitting a 1% gain during the day; the Nasdaq and S&P 500 gained 0.47% and 0.25%, respectively. Large tech stocks were mixed: Google and Amazon rose over 1%, Nvidia fell 0.70%, and Facebook dropped 0.76%. Chip stocks diverged: Micron up over 4%, Qualcomm up 1.70%, Intel down nearly 4%.

Notably, the Iran situation previously dampened retail investor sentiment in the U.S. A recent report from JPMorgan shows that as tensions escalated, retail investors ended their previous “buy-the-dip” enthusiasm, showing signs of “sustained fatigue.” During the week of March 5-11, retail weekly purchase volume plummeted nearly 30% week-over-week. Meanwhile, retail ETF weekly net inflows decreased by 22%, ending a three-month buying streak.

Latest Iran Situation News

According to Xinhua, Iran’s Supreme National Security Council issued a statement early on the 18th confirming that Secretary Ali Larijani was killed in the airstrike.

Iran’s Tasnim News Agency quoted the statement, saying Larijani died early on the 17th. His son, Morteza Larijani, the deputy head of the Security Affairs Office of the Supreme National Security Council, and several accompanying personnel also perished.

The statement said Larijani had always been committed to Iran’s development and called for national unity in the face of external enemies. It emphasized that this event would further strengthen Iran’s resolve to continue the “resistance path.”

An IDF statement on the 17th indicated that Israeli forces carried out an airstrike near Tehran, Iran’s capital, the night before, assassinating Larijani. The statement described Larijani as one of the most senior members of Iran’s leadership, a close associate of the late Supreme Leader Khamenei. After Khamenei’s death in an American and Israeli airstrike on February 28, Larijani led operations against Israel and the U.S. in the region. The statement called Larijani Iran’s “de facto leader.”

Additionally, on the 17th, Iran’s Islamic Parliament Speaker, Ali Khamenei, posted on social media that the Strait of Hormuz will not return to pre-war status. Earlier, on March 13, Iran’s new Supreme Leader, Ali Khamenei, issued his first statement since taking office, reaffirming that Iran will continue to block the Strait of Hormuz. Iran’s Islamic Revolutionary Guard Corps (IRGC) repeatedly stated that the Strait is under strict control of the IRGC Navy, and “the U.S. and its allies have no right of passage.”

According to Xinhua, U.S. President Trump met with Irish Prime Minister Martin at the White House on the 17th and again expressed dissatisfaction with NATO allies for not participating in the U.S.-proposed escort operation in the Strait of Hormuz, calling it “disappointing.”

Trump told reporters, “NATO is making a very foolish mistake.” “I want to know if NATO will support us. So this is a good test because we don’t need them, but they should be there,” he said. “The U.S. must remember this because we find it very shocking.”

Trump claimed that the U.S. has invested “trillions of dollars” in NATO over the years, which is one of the reasons for the U.S. budget deficit. However, when asked if he would reconsider U.S. relations with NATO, he said, “No plans at the moment.”

He also reiterated that safe passage through the Strait of Hormuz “won’t be too long.” He added that the U.S. is not yet ready to end its conflict with Iran, but “we will leave soon.”

On February 28, the U.S. and Israel launched a large-scale military operation against Iran, which responded with attacks on Israeli and U.S. military bases in the Middle East. The conflict has nearly halted shipping through the Strait of Hormuz.

Recently, Trump has been urging European countries and other allies to participate in escorting ships through the Strait of Hormuz, complaining that some allies are “not enthusiastic” about assisting the U.S. He posted earlier on the 17th that most NATO “allies” have informed the U.S. they are unwilling to participate in the U.S.-Israel military actions against Iran, and that the U.S. “no longer needs or expects” NATO countries’ help.

EU High Representative for Foreign Affairs and Security Policy Josep Borrell said on the 16th that “this is not Europe’s war,” and “no one wants to get involved,” adding that EU member states have no intention of expanding their current escort missions in the Red Sea and Gulf region to the Strait of Hormuz.

Purchase Volume Plummets 30%! U.S. Retail Investors Stop “Buying the Dip”

The outbreak of the Iran conflict shattered over a year of retail investors’ “buy-the-dip” momentum in the U.S. According to MarketWatch, last Wednesday, a report led by JPMorgan’s quantitative strategist Arun Jain stated: “For the first time this year, retail investors showed signs of sustained weakness, with weekly purchase volumes down about 30% week-over-week. Previously, in February, they ignored seasonal patterns and recorded the third-largest monthly purchase volume on record.”

JPMorgan’s team noted that during the week of March 5-11, retail ETF inflows decreased by 22%, ending a roughly three-month buying streak. Total retail fund inflows fell to $6.7 billion, below the 12-month weekly average of $7.1 billion. ETFs remained popular, with inflows of $6.3 billion, while individual stock inflows were $400 million.

JPMorgan said retail investors are reducing their purchases of ETFs and stocks. The strategist noted that waning interest in individual stocks further pressures the already moderate capital flows of the past two to three weeks. Last Monday, a dramatic sell-off on Wall Street marked the largest single-day net sell of individual stocks in a month. Although buying recovered on Tuesday and Wednesday, volumes still lagged behind the year-to-date average.

Despite overall reduced positions, retail investors’ stock picking remains relatively focused, favoring large tech stocks like Oracle, which reported strong earnings, while reducing exposure to energy stocks. Last week, retail investors continued buying tech and consumer discretionary stocks, including Nvidia (+$399 million), Broadcom (+$178 million), Oracle (+$172 million), Microsoft (+$154 million), Tesla (+$85 million), and Palantir (+$85 million).

“This pattern is similar to what we saw at the start of the Russia-Ukraine conflict in 2022—initial weeks of buying energy stocks and ETFs, a brief dip, then a recovery as the conflict became clearer,” the report said. Two weeks ago, amid increasing instability in the Middle East, oil prices surged to nearly $120 per barrel.

JPMorgan’s charts show retail investors have been buying aerospace and defense stocks while net selling financials, healthcare, communications, and materials sectors.

Additionally, the USO oil fund, tracking West Texas Intermediate crude, remains popular, with funds flowing out of the XLE energy sector ETF, which tracks major energy companies.

In some corners of the market, caution is running high. Nomura Securities cross-asset strategist Charlie McElligott noted that options traders related to large tech stocks and Nasdaq 100 ETFs seem to be preparing for “disaster,” creating a one-sided trading environment and potential opportunities for contrarian bets.

Retail investors have become a notable part of the investor landscape, dating back to the pandemic in 2020 when most were stuck at home. Scott Rubner, head of stock and derivatives strategies at Castle Securities, recently called retail investors “the most powerful players in the stock market,” citing record inflows in January. He said that February’s flows, while lower than January, still marked the fifth-largest net buying month on record and the strongest in five years.

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