The world is once again greeted by a hot and lively morning

Ask AI · How does the Iran war affect the global market’s second decline?

The global market seems to be facing another hot morning, with major markets showing “gaps.”

• Oil prices surged, with Brent crude reaching as high as 108;

• Gold prices fell initially before rising, standing above 4500 dollars;

• U.S. Treasury yields dipped slightly but remained above 4.40%;

• U.S. stock futures opened slightly lower.

The Iran war has entered its fifth week.

First, the most panicked moment for the market has not yet arrived, and the sell-off has reached a level that requires a clearing event to stabilize. At least we need to see the S&P 500 index drop by more than 2%, while the Nasdaq index declines by more than 3%.

The mainstream view among Wall Street analysts remains that the likelihood of this war lasting longer than investors expect is high, and therefore oil prices will remain elevated, while other markets may weaken further.

Second, new variables have emerged in the oil market.

The Washington Post cited unnamed U.S. officials as saying that the U.S. is preparing for possible ground operations in Iran that could last for weeks, with the primary goal likely being to secure the Strait of Hormuz.

“Ground operations” and “lasting weeks” present a situation that is completely different from the past, indicating three scenarios for the market:

· Scenario One, rapid resolution (ideal situation): The Strait of Hormuz reopens, oil prices fall, and the market violently rebounds;

· Scenario Two, short-term escalation (more realistic): The conflict escalates, oil prices soar, and both stocks and bonds suffer, leading the market into a “second decline”;

· Scenario Three, entrapment in a long-term conflict (most dangerous): Oil prices remain high for an extended period, inflation spirals out of control, and the world enters a “stagflation-like” scenario, which poses a significant risk.

Even if U.S. actions are aimed at “securing” the strait, the risk to the strait increases exponentially the moment the actions commence. No tanker would want to pass through during ground warfare, and the market must first experience Scenario Two before Scenario One occurs.

Third, it is worth noting that the volatility of the market at the opening on Monday was significantly lower than the previous Monday, giving some traders the idea of looking for buying opportunities. Many have been on the sidelines, waiting for the so-called retail sell-off, pondering whether the significant drop last Friday was the opportunity.

To see our deeper insights on the global market, you can subscribe to “Global Market Notes: April Outlook, The Final Strike.” This is not yet a crisis, but it serves as a warning.

1. Latest Release: “Fear and Greed Index Report: The Most Dangerous Thing is Not the Decline,” covering the U.S. dollar, U.S. stocks, A-shares, gold, and crude oil—looking at each individually is not extreme, but together they signal something major.

2. Latest Release: Weekly strategy for gold and crude oil. Is it time to buy gold at the bottom? Will oil prices soar? Please check the answer. This report also includes predictions for gold, silver, crude oil, and A-share levels in April.

3. Exclusive Interpretation: Can Trump no longer control oil prices? What will happen if the war begins to spiral out of control? Will oil prices initiate a grand decline in the future?

4. Has the most challenging phase for A-shares passed? This report reveals a noteworthy “turning point date.” Additionally, Wall Street has identified nine Chinese stocks as favorable.