​EBC Markets Briefing | US stocks slid; gold prices regained lustre

Wall St tumbled on Friday, with each major index closing at their lowest levels in months. The Dow entered correction territory as the month-long Middle East war continued to suppress risk appetite.

The VIX rose to ⁠31.05, the highest close since 21 April. The S&P 500 software and services index closed at its lowest level since November 2023, but top brokerages still expect the S&P 500 to extend rally in 2026.

Strategists see momentum in AI and strong corporate earnings ⁠offset the ongoing conflict's short-term economic impact. However, they warned that persistently higher oil prices could increase recession risks.

Money market participants are not pricing in any easing from the Fed this year, according to CME's FedWatch Tool. Markets are now pricing in a roughly 25% chance for a hike at the October meeting.

The Pentagon is ‌preparing for weeks of ground operations in Iran, the Washington Post reported. The plans could ⁠involve raids by Special Operations and conventional infantry troops.

Analysts cautioned that the broader oil market remains increasingly fragile. Kuwait said a service building at a power generation and water desalination plant were damaged in an attack Sunday evening.

The Dow failed to break above the 200 SMA, which was followed by a sharp drop. However, given the slightly oversold condition as per the RSI, further gains seem likely with potential resistance around 45,700.

Asset recap

As of market close on 27 March, among EBC major products, US West Texas Oil led gains. Yemen's Houthis launched a missile strike against Israel, and threated to choke the Red Sea.

Investors in Japanese equities are hedging against more downside. Some investors started to position for a bearish scenario, as rising oil prices and a weaker yen stoke stagflation worries and force a rethink of bets.

Wells Fargo reiterated gold's long-term bull thesis, citing the same factors that had supported its scorching rally in 2025: lower interest rates, central bank buying and geopolitics.

EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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