On Monday, the S&P 500 Index ($SPX) closed up 1.01%, the Dow Jones Industrial Average ($DOWI) rose 0.83%, and the Nasdaq 100 Index ($IUXX) increased by 1.13%. March E-mini S&P futures (ESH26) were up 1.04%, while March E-mini Nasdaq futures (NQH26) rose 1.15%. The markets were buoyed by a drop in crude oil prices of over 5% as shipping resumed through the Strait of Hormuz, alongside falling bond yields, with the 10-year T-note yield falling to 4.22%.
The ongoing conflict with Iran, now in its seventeenth day, continues to impact oil supply, with the International Energy Agency (IEA) reporting a disruption of 7.5% of global oil supply and an expected cut of 8 million barrels per day this month. Crude oil prices could exceed near-record highs if conditions in the Strait of Hormuz remain compromised, according to Goldman Sachs.
Mixed economic data emerged from the U.S. and China; U.S. manufacturing production rose 0.2% in February while the Empire manufacturing survey fell to -0.2, and in China, industrial production increased by 6.3% year-on-year, though the jobless rate rose to 5.3%. The market has priced in only a 1% chance of a 25 basis point rate cut in the upcoming FOMC meeting.
