U.S. Equities Rally on Expectations of Strait Reopening

Market Overview

Yesterday, international oil prices pulled back from elevated levels as expectations grew that disruptions to shipping through the Strait of Hormuz could ease, alongside speculation of coordinated strategic reserve releases by multiple countries. The retreat in crude prices significantly eased market concerns about runaway inflation.

Supported by this development, all three major U.S. stock indices rebounded, with the Nasdaq leading the gains. Tech giant Meta and AI infrastructure provider Nebius announced a major $27 billion strategic agreement, boosting the share prices of related companies and reigniting enthusiasm for the AI sector. Shortly thereafter, NVIDIA revealed a striking projection that its Blackwell and Rubin chips could generate at least $1 trillion in cumulative revenue by 2027, further reinforcing bullish sentiment toward AI infrastructure.

Market performance showed clear divergence across asset classes:

■ Cryptocurrencies and Technology Stocks

Risk assets surged sharply. Bitcoin climbed above the $74,000 mark, gaining more than 3%, while Ethereum (ETH) significantly outperformed with a 10% daily rally, driven largely by strong capital inflows following the launch of BlackRocks new “staking-enabled” ETH ETF.

Among equities, Meta rose 2.3%, while Nebius soared 15% on optimism surrounding the strategic agreement.

■ Energy and Precious Metals

Safe-haven demand retreated as geopolitical tensions appeared to stabilize. U.S. crude oil dropped more than 5% intraday, while Brent crude briefly fell below the psychologically significant $100 per barrel level.

Against this backdrop, spot gold edged lower by 0.25%, while silver staged a sharp intraday V-shaped rebound but ultimately closed nearly flat, indicating that bullish momentum in precious metals has shifted toward a wait-and-see stance as inflation expectations cool.

■ Bond and Currency Markets

Falling oil prices pushed U.S. Treasury yields broadly lower, with the 10-year yield declining by 5 basis points. Meanwhile, the cooling of safe-haven demand weakened the U.S. dollar, with the U.S. Dollar Index (DXY) falling 0.5%, providing room for a rebound in non-USD currencies.

Key Market Themes● NVIDIA GTC Conference

At NVIDIAs annual GTC Developer Conference, CEO Jensen Huang announced that the company expects its next-generation Blackwell AI accelerator architecture and the subsequent Rubin platform to generate at least $1 trillion in cumulative revenue by the end of 2027.

This projection significantly exceeds Huangs $500 billion sales estimate announced in October last year, highlighting the rapid expansion of global investment in AI infrastructure.

Following the announcement, NVIDIA shares extended gains during Mondays midday U.S. trading session, briefly reaching a daily high with gains of about 4.8%. However, the stock later gave back more than half of those gains and closed with an increase of less than 2%.

● Watch for CTA Selling Pressure

According to Goldman Sachs estimates, Commodity Trading Advisor (CTA) strategies could trigger approximately $69–70 billion in global equity selling over the next week, and $98–100 billion over the next month.

U.S. equities may face the greatest impact due to negative trend signals, which could amplify systematic selling pressure.

Investors should also pay close attention to Fridays “Triple Witching Day,” when options with a delta-adjusted notional value of approximately $1.3 trillion are set to expire.

Goldman favors a “stagflation positioning strategy,” recommending:

• Long positions in commodity-related equities and defensive sectors

• Short exposure to lower-quality consumer stocks, semiconductors, and regional banks

Key Economic Data to Watch (GMT+8)

22:00 (ET)

U.S. February Pending Home Sales MoM

U.S. February Conference Board Leading Economic Index MoM