..... . VALI disclosures . .....: 02/03/26, US market news

Monday, March 2, 2026

02/03/26, US market news

The US stock market started the week on a weak note after tensions in the Middle East escalated sharply over the weekend. Fresh military action between the United States and Iran created uncertainty across global markets, leading to volatility in stocks, oil, and precious metals.

Investors reacted cautiously as fears of a wider conflict raised concerns about global stability, oil supply, and economic growth.

Dow Futures Fall Amid War Fears

On Monday morning, futures linked to the Dow Jones Industrial Average dropped more than 217 points. Futures trading usually gives an early signal of how markets may open later in the day, and the decline reflected nervousness among investors.

When geopolitical tensions increase, investors often move money away from risky assets like stocks and shift toward safer options. The uncertainty surrounding military action tends to impact business confidence and global trade expectations.

Oil Prices Spike, Then Cool Down

Crude oil prices jumped sharply at the start of trading. Initially, prices surged more than 10% as fears grew that the conflict could disrupt oil supply from the Middle East - one of the world's most important oil-producing regions.

However, prices later gave up most of those gains:

Brent Crude traded at $76.11 per barrel

West Texas Intermediate traded at $69 per barrel

Both benchmarks were still about 3.5% higher compared to previous levels, but the cooling suggested that traders were reassessing the immediate supply risks.

Oil prices are highly sensitive to conflict in the Middle East. Any disruption to supply routes or production can push prices sharply higher, which may increase inflation worldwide.

Gold and Silver See Mild Gains

As markets turned volatile, investors moved toward traditional safe-haven assets. Gold and silver prices rose slightly, gaining a little over 1%.

Gold is often considered a protective investment during times of war or economic uncertainty. The modest rise showed that while investors were cautious, panic selling was not widespread.

US Markets Ended Friday in the Red

The weakness did not begin on Monday. US stock markets had already closed lower on Friday after fresh economic data raised concerns about inflation.

The Dow Jones Industrial Average fell 521 points (1.05%) to close at 48,977.
The Nasdaq Composite declined 210 points (0.92%) to 22,668.
The S&P 500 slipped nearly 30 points (0.43%) to 6,878.

The fall came after the US Labor Department released its Producer Price Index (PPI) report.

Inflation Worries Resurface

The report showed that producer prices rose by 0.5% in January, which was higher than expected. In December, prices had increased by 0.4% (after revision).

Higher producer prices mean companies are facing rising costs. These costs can later be passed on to consumers, leading to higher inflation.

This has revived concerns about stagflation - a situation where inflation remains high while economic growth slows. Adding to worries are reports of AI-related job cuts in certain sectors, raising fears about employment stability.

Sector-Wise Impact: Airlines Hit Hard

Some sectors were hit more than others:

Airline stocks saw heavy selling, with the NYSE Arca Airline Index plunging 5%. The index closed at its lowest level in nearly a month.
Airline companies are sensitive to rising oil prices because fuel is one of their biggest costs. Any increase in crude oil prices can directly impact their profitability.
Software and semiconductor stocks also showed weakness, reflecting concerns about growth and investment spending.
On the positive side, pharmaceutical, retail, and telecom stocks recorded gains, as investors moved toward relatively defensive sectors.

What Investors Are Watching Now

Markets are now closely monitoring:

Whether the Middle East conflict expands further.
Oil supply stability in the region.
Upcoming economic data and signals from the US Federal Reserve.
Inflation trends and employment data.

If tensions remain high and oil prices stay elevated, inflation pressure could increase again. However, if the situation stabilizes quickly, markets may recover some of the losses.

The combination of geopolitical tensions and inflation concerns has created a challenging environment for global markets. While oil prices surged briefly and stock futures declined, the overall reaction suggests caution rather than panic.

Investors are balancing the risks of war-related disruptions with ongoing concerns about inflation and economic slowdown. In the coming days, market direction will largely depend on developments in the Middle East and fresh economic signals from the United States.

Report by Swastika Sruti of Oneindia.com

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Trade Cycles

The four important features of Trade Cycle are (i) Recovery, (ii) Boom, (iii) Recession, and (iv) Depression!

The trades cycle or business cycle are cyclical fluctuations of an economy. A full trade cycle has got four phases: (i) Recovery, (ii) Boom, (iii) Recession, and (iv) depression. The upward phase of a trade cycle or prosperity is divided into two stages—recovery and boom, and the downward phase of a trade cycle is also divided into two stages—recession and depression.

Phases of Trade Cycle:

The phases of trade cycle are explained with a diagram:

(1) Recovery:

In the early period of recovery, entrepreneurs increase the level of investment which in turn increases employment and income. Employment increases purchasing power and this leads to an increase in demand for consumer goods.

As a result, demand for goods will press upon their supply and it shall, thereby, lead to a rise in prices. The demand for consumer’s goods shall encourage the demand for producer’s goods.

The rise in prices shall depend upon the gestation period of investment. The longer the period of investment, the higher shall be the price rise. The rise of prices shall bring about a change in the distribution of income. Rent, wages, interest do not rise in the same proportion as prices.

Consequently, the margin of profit improves. The wholesale prices rise more than retail prices. The prices of raw materials rise more than the prices of semi-finished goods and the prices of semi-finished goods use more than the prices of finished goods.

(2) Boom:

The rate of investment increases still further. Owing to the spread of a wave of optimism in business, the level of production increases and the boom gathers momentum. More investment is possible only through credit creation. During a period of boom, the economy surpasses the level of full employment and enters a stage of over full employment.

(3) Recession:

The orders for raw materials are reduced on the onset of a recession. The rate of investment in producers’ goods industries and housing construction declines. Liquidity preference rises in society and owing to a contraction of money supply, the prices falls. A wave of pessimism spreads in business and those markets which were sometime before sellers markets become buyer’s markets now.

(4) Depression:

The main feature of a depression is a general fall in economic activity. Production, employment and income decline. The prices fall and the main factor responsible for it is, a fall in the purchasing power.

The distribution of national income changes. As the costs are rigid in nature, the margin of profit declines. Machines are not used to their full capacity in factories, because effective demand is much less. The prices of finished goods fall less than the prices of raw materials.

✳Reality Tips to Traders

1)Trading in the stock market is a marathon. 2)Protecting your capital is key. (Learn to protect first) 3)Making 0 on the day is better than losing 50k 4)Losses happen; they are part of this business. 5)It’s not you vs. the market. It’s you VS you. 6)You are your biggest enemy; learn to be mentally disciplined. 7)Don’t follow the majority; follow the correct path. 8)Traders without a stop loss end up not being traders for long. 9)There is always another trade. 10)The big money is made waiting for the right set-ups. 11)Waiting for the right trade is the most powerful strategy. 12)It is better to cut a loss than to wait to be proven right. 13)Position sizing can make or break you. 14)Worry about the downside before you even think about the upside. 15)Don’t listen to headlines

..BANKING TERMINOLOGY

There are various types of Banks: PSU Banks, Private Banks, Co-operative/Regional Banks, Small Finance Banks and Foreign Banks. When you deposit money in a bank, let's say the bank gives you an interest rate of 4%. But when the bank lends out this money, they lend it out at say, 12%. The difference of 8% in the above scenario is effectively the profit of the bank! The loans that do not pay interest for 90 days are known as Non-performing Assets. Banks have to provide for such bad loans. Structure of a Bank Asset for a Bank: The asset portion of a bank's capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans). Liabilities for a Bank: The bank's main liabilities are its capital (including cash reserves and, often, subordinated debt) and deposits. The latter may be from domestic or foreign sources (corporations and firms, private individuals, other banks, and even governments). Banks are required to maintain Liquidity with the Reserve Bank of India: SLR (Statutory Liquidity Ratio): It is the money a bank needs to preserve in the form of cash, gold or government Bonds before providing credit customers. This limitation is added by RBI on banks to make funds available to customers on-demand at your earliest convenience. Banks are required to maintain SLR at 18%. CRR (Cash Reserve Ratio): Banks are required to hold a certain proportion of their deposits in the form of cash. Banks don’t hold these as cash with themselves, but deposit such amounts with RBI / currency chests. CRR rate is at 4.5% currently. Repo Rate: The rate at which the RBI lends short-term money to the banks. The RBI through its Monetary Policy committee changes the repo rate to balance growth and Inflation. Reverse Repo rate: The rate at which banks park their short-term excess liquidity with the RBI. Now let us understand various terminologies for Banks Net Interest Income (NII): This is the spread the bank makes on its lending. It is calculated as Interest Income – Interest Expended Net Interest Margin (NIM): This is the spread the bank makes on its lending. It is the earning which is left after deducting the cost paid to depositors from its yields on Loans. This is denoted in % terms. The formula is Yield on Loans – Cost of funds Capital Adequacy Ratio (CAR): The capital adequacy ratio (CAR) is a measure of a bank's available capital expressed as a percentage of a bank's risk-weighted credit exposures. Essentially, it is the Capital that is available to lend. Tier I Capital – In simple words this capital is freely available with the bank to lend out. Tier II Capital- This is the capital tied up somewhere and is less freely available to lend. In case of an adverse event, the bank can use this capital to lend. Under Basel III norms, a bank’s tier 1+tier 2 capital must be a minimum of 8% of its risk-weighted holdings. The minimum capital adequacy ratio, also including the capital conservation buffer, is 10.5%. Current Account Saving Account (CASA)- There is no interest paid on the Current Account and a small interest rate is paid on a savings account. The combination of both is called CASA which shows the liabilities of the bank on which it pays relatively less interest. Deposits: Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. Now let us come to NPA. Gross NPA (GNPA): It is the total loans on which no payment has been paid for 90 days or more. GNPA % is usually shown in each Bank’s quarterly results. The percentage is basically the GNPA amount as a % of the total advances. Slippages: Slippages denote the fresh amount of loans that have turned bad in a year. The slippage ratio of a bank is calculated as Fresh accretion of NPAs during the year /Total standard assets at the beginning of the year multiplied by 100. Provisioning Coverage Ratio (PCR): This is the ratio of provisioning to GNPA and indicates the extent of funds a bank has kept aside to cover loan losses. For Instance, a company has GNPAs of Rs 100 and they have set aside 50 Rs, then the PCR is 50%. Net NPA (NNPA): The total figure left after deducting provisions made for bad loans from GNPA. (GNPA – Provisions+upgrades/writeoffs = NNPA) Special Mention Account (SMA) SMA-0 is a category in which stress with respect to the principal and interest has remained overdue for a period of 0 to 30 days. SMA-1 is a category in which stress with respect to the principal and interest has remained overdue for a period of 30-60 days. SMA-2 is a category in which stress with respect to the principal and interest has remained overdue for a period of 60-90 days

..... . VALI disclosures . .....

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Monday, March 2, 2026

02/03/26, US market news

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