Gold jumped on fresh Gaza war, breaking ceasefire; Dow gained

·       US Stocks recovered on hopes of a less hawkish Trump trade war and progress of Ukraine war ceasefire

·       Chinese President Xi may meet Trump in June or early and till then, Trump may refrain from too much hawkish trade war narrative

·       Trump may also postpone implementations of reciprocal tariffs planned for April

On Friday (14th March 25), the risk trade Sentiment improved amid signs lawmakers in Washington will successfully avert a government shutdown. Meanwhile, the market remains focused on escalating Trump trade war tensions and its potential impact on Wall Street as well as Real Street. On Friday, the S&P 500 jumped 2.1%, the Dow Jones-30 popped 674 points, and the Nasdaq 100 rose 2.5%. Easing fears of an imminent government shutdown and progress of Ukraine war ceasefire talks helped lift markets.

The Senate Minority Leader Chuck Schumer signaled support for a Republican-backed funding bill, reducing political and policy uncertainty. Tech stocks led the rebound after the last few day's plunge, led by Nvidia while Tesla, Meta, Amazon, and Apple. Palantir also jumped, defying concerns over potential defense spending cuts. The US market is now fully controlled by Trump’s morning moods, whims & fancies, and Truths; not economic data and Fed comments.

Escalation of Military Actions in Yemen

On late Friday, March 14, 2025, President Trump authorized extensive airstrikes targeting Iran-supported Houthi rebels in Yemen. This decision followed attacks by the Houthis on ships in the Red Sea, prompting the U.S. to act in defense of American and allied maritime assets. The strikes resulted in over 30 deaths and 100 injuries among the Houthi forces. Trump's administration emphasized that these actions serve as a stern warning to Iran regarding its support for the Houthis. Iran's foreign minister condemned the U.S. strikes, urging an end to the violence against the Yemeni people. ​ Trump recently hinted at tensions with Iran, stating, “We’re down to final strokes with Iran”.

As of March 18, 2025, efforts to establish a ceasefire in the ongoing Russia-Ukraine conflict are intensifying. U.S. President Trump is scheduled to hold a vital phone call with Russian President Putin to discuss a proposed 30-day truce, which Ukraine has already accepted.

Meanwhile, as of early March 18, 2025, the fragile ceasefire between Israel and Hamas has collapsed following a series of extensive Israeli airstrikes across the Gaza Strip. These attacks have resulted in significant casualties, with reports indicating over 300 Palestinians killed, including many children. ​ The ceasefire, which had been in place since January 2025, was part of a phased plan aiming to de-escalate the longstanding conflict. The initial phase concluded two weeks prior, during which Israel withdrew forces, and Hamas released hostages.

However, subsequent negotiations for the next phase stalled, primarily due to disagreements over further exchange of hostages and prisoners and the terms of the ceasefire extension. ​Israeli Prime Minister Netanyahu justified the renewed military actions, stating they were in response to Hamas's refusal to release additional hostages and comply with prior agreements. He emphasized that operations would continue with increased intensity until Hamas acceded to the demands. ​

The United States was reportedly consulted before the strikes, with the White House expressing support for Israel's actions. A senior U.S. official warned of severe repercussions against those who threaten Israel or the United States, stating they would "desatar el infierno" ("unleash hell") on such adversaries. The international community has expressed deep concern over the escalation. The United Nations Humanitarian Coordinator called for an immediate ceasefire, highlighting the immense suffering in Gaza. Regional actors, including Yemen's Houthi rebels, have condemned Israel's actions and pledged support to Hamas, raising fears of a broader regional conflict. ​

Overall, the Gaza war ceasefire situation remains highly volatile, with the potential for further escalation if a diplomatic resolution or phase two ceasefire is not urgently pursued. As of early March 18, 2025, the ceasefire in the Gaza War has collapsed, and Israel has resumed military operations against Hamas targets in Gaza. The breakdown follows stalled negotiations over further hostage releases, with Israel accusing Hamas of repeatedly refusing to release hostages and rejecting proposals put forward by the United States and other mediators. Reports indicate that Israeli jets have launched widespread airstrikes, targeting multiple Hamas positions, with Israel promising to escalate military force to pressure the group.

Background on the Gaza War Ceasefire

The ceasefire, which initially took effect on January 19, 2025, after 15 months of conflict, and following over a year of intense negotiations was part of a multi-phase agreement mediated by Qatar, Egypt, and the U.S. The agreement primarily aimed to return hostages of varying citizens including the US- taken by Hamas and conclude the conflict that began on October 7, 2023.

First Phase:

During the initial six-week phase, Hamas released 25 living Israeli hostages and the remains of eight others in exchange for 2000 Palestinian prisoners. Israeli forces withdrew from much of Gaza, allowing significant humanitarian aid.

The first phase, lasting six weeks, involved a halt in fighting, increased humanitarian aid to Gaza, and an exchange of some hostages for Palestinian prisoners. However, the transition to Phase two ceasefire—intended to address further hostage releases, a potential permanent ceasefire, and Israeli troop withdrawal—faltered. By early March, the first phase had expired, and tensions escalated as Israel blocked humanitarian aid and electricity supplies to Gaza, actions criticized as attempts to pressure Hamas but which also worsened the humanitarian crisis.

Current Gaza War Situation

Renewed Attacks: On March 18, 2025, Israel launched a large-scale military operation in the Gaza Strip, marking the heaviest attack since the previous ceasefire. The strikes killed at least 308 people, according to the Gaza Health Ministry.

Reason for Attacks: Israeli Prime Minister Netanyahu ordered the strikes due to a lack of progress in extending the ceasefire into phase two and Hamas's refusal to release remaining hostages.

Impact on Ceasefire: The attacks effectively shattered the fragile ceasefire, with Hamas accusing Israel of unilaterally ending the agreement.

Consequences and Reactions

Humanitarian Crisis: Israel had previously cut off all supplies, including food and medicine, to Gaza, exacerbating a humanitarian crisis and drawing international condemnation.

International Response: The U.S. has been involved in the negotiations but has not confirmed the specifics of a new proposal attributed to U.S. envoy Steve Witkoff.

Future Prospects: The renewed conflict raises concerns about the fate of the remaining hostages and the potential for further escalation in the region.

Recent developments show that Israel consulted with the White House before resuming strikes today, signaling coordination with the U.S. despite earlier diplomatic efforts to extend the truce. Meanwhile, Hamas has accused Israel of violating ceasefire terms, particularly citing the aid blockade and continued attacks during the truce period. The renewed fighting has raised fears of a return to full-scale war, with UN officials warning of a deepening humanitarian catastrophe, including risks of famine and widespread suffering among Gaza’s population.

Hamas says Israel’s claim of imminent threat ‘unfounded’

The Palestinian group has issued a statement saying Israeli claims that it was rearming and preparing to carry out attacks are “unfounded” and “just flimsy pretexts to justify its return to war”. Israel “is trying to mislead public opinion and create false justifications to cover up its prior decision to resume genocide against unarmed civilians”, Hamas said, adding that Netanyahu’s government was “indifferent” to the terms of the ceasefire. “Hamas adhered to the agreement until the last moment and was keen to continue it, but Netanyahu, looking for a way out of his internal crises, preferred to reignite the war at the expense of the blood of our people,” the group said. Netanyahu was expected to testify in a corruption trial against him, but his appearance was postponed due to “security developments” in Gaza.

Meanwhile, a Hamas spokesperson said on Telegram: “The criminal occupation, with prior American coordination, is resuming its genocide and committing dozens of massacres against our people. The occupation’s prior coordination with the US administration confirms its partnership in the genocide against our people and provides cover for its war crimes. Hamas fully adhered to all the agreement terms but the occupation rejected it.”

Optimistic remarks about Ukraine War ceasefire: Trump truthed on late Monday- 17th March’2025

“Tomorrow morning I will be speaking to President Putin concerning the War in Ukraine. Many elements of a Final Agreement have been agreed to, but much remains. Thousands of young soldiers, and others, are being killed. Each week brings 2,500 soldier deaths, from both sides, and it must end NOW. I look very much forward to the call with President Putin.”

Trump also commented on March 14 via Truth Social about a "very good and productive" meeting between U.S. Special Middle East Envoy Steve Witkoff and Russian President Vladimir Putin, suggesting optimism about ending the Russia-Ukraine war. This followed reports of U.S. efforts to broker a ceasefire, with Trump stating on March 12 that the next move was up to Putin after Ukraine accepted a U.S.-proposed 30-day ceasefire. His comments indicate a focus on portraying himself as a peacemaker, though no specific timeline for a Putin call was confirmed.

“We had very good and productive discussions with President Vladimir Putin of Russia yesterday, and there is a very good chance that this horrible, bloody war can finally come to an end — BUT, AT THIS VERY MOMENT, THOUSANDS OF UKRAINIAN TROOPS ARE COMPLETELY SURROUNDED BY THE RUSSIAN MILITARY, AND IN A VERY BAD AND VULNERABLE POSITION. I have strongly requested to President Putin that their lives be spared. This would be a horrible massacre, one not seen since World War II. God bless them all!!!”

Accordingly, Russian President Putin also offered a safe exit for ‘surrounded’ Ukrainian soldiers if they surrendered. But Ukraine’s President Zelenskyy denied any such situation of ‘surrounded Ukrainian soldiers’ by Russian forces.

But Ukrainian President Zelenskyy remains skeptical of Russia's intentions, expressing doubts about Moscow's commitment to genuine peace. He has accused Putin of prolonging negotiations by imposing additional conditions while continuing military aggression. The proposed ceasefire includes discussions on potential territorial concessions, such as the status of the Zaporizhzhia nuclear power plant. However, Ukraine firmly rejects any loss of sovereignty or territorial integrity.

But Trump admin may recognize Crimea as Russian territory.

The Trump admin is weighing whether to formally recognize Crimea as part of Russia in a possible peace deal to end Moscow's special military operations (war) against Ukraine. The consideration comes ahead of a scheduled Tuesday call between US President Trump and his Russian counterpart Putin, where a 30-day ceasefire deal is reportedly on the table. Trump hinted at ongoing negotiations, saying discussions included "dividing up certain assets." Moreover, Secretary of State Marco Rubio recently stated that Ukraine may have to make territorial concessions to stop further suffering. Crimea, annexed by Russia in 2014, remains internationally recognized as Ukrainian territory despite Moscow's control. According to the report, the White House has also discussed urging the United Nations to recognize Crimea formally.

US and Ukraine Proposal

The United States and Ukraine have jointly proposed a 30-day ceasefire, which Ukraine accepted following talks in Jeddah, Saudi Arabia, on March 11-12, 2025. This interim truce aims to facilitate prisoner exchanges, the release of civilian detainees, and the return of forcibly transferred Ukrainian children, with the possibility of extension by mutual agreement. Ukrainian President Zelensky has described this as a "positive step" and emphasized its importance for de-escalating tensions, though he has expressed skepticism about Russia’s willingness to commit.

Russia’s Response

Russian President Putin expressed support "in principle" for the ceasefire idea during a press conference on March 13, 2025, but outlined several conditions and questions that remain unresolved. These include the status of Ukrainian troops in Russia’s Kursk region (where Ukraine still holds some territory despite Russian advances), how the ceasefire would be monitored, and whether it would allow Ukraine to rearm or mobilize. Putin has suggested that a ceasefire must address the "root causes" of the conflict to ensure "enduring peace," but Zelensky has accused him of setting preconditions to delay or reject the proposal outright, implying Putin seeks to continue the war.

US Efforts

US President Trump has been actively involved, stating on March 17, 2025, that he plans to speak with Putin on March 18 or 19 to discuss the ceasefire, including potential concessions like land and control of assets such as the Zaporizhzhia nuclear power plant. Trump’s special envoy, Steve Witkoff, visited Moscow on March 13-14, with reports indicating "good and productive" talks, though Russia has not formally recognized Witkoff as a mediator. US Secretary of State Marco Rubio has said the ball is now in Russia’s court, with the response expected to clarify Moscow’s intentions.

Ongoing Conflict

Despite ceasefire talks, both sides continue military operations. Overnight attacks reported on March 15-16, 2025, involved over 100 drones exchanged between Russia and Ukraine, causing injuries and damage, including in Kharkiv (Ukraine) and Kursk (Russia). Russia claims to be close to fully recapturing Kursk, though Ukraine denies its forces are encircled there.

International Involvement

The G7 and European leaders, including UK Prime Minister Starmer and French President Emmanuel Macron, have urged Russia to accept the ceasefire, discussing sanctions and security guarantees for Ukraine if Moscow refuses. A "coalition of the willing" involving over 30 countries is being formed to support Ukraine, with meetings planned to maintain momentum.

In summary, while there is cautious optimism from some US officials and a willingness from Ukraine to pause hostilities, Russia’s conditional stance and continued fighting suggest a ceasefire remains uncertain as of March 18, 2025. Trump’s upcoming call with Putin may be a pivotal moment in determining the next steps.

Domestically, Trump signed a government funding bill on March 16 after Congress averted a shutdown, keeping the government financing running through September 30, 2025. This followed his public urging of Republicans to support a stopgap measure proposed by House Speaker Mike Johnson, showing his influence over party dynamics. Concurrently, he announced military action against Yemen’s Houthi rebels on March 16, describing it as a response to their "campaign of terrorism against the American military," with strikes reportedly killing at least 31 people.

Trade policy remained a priority, with Trump defending his tariff strategy in remarks in mid-March. He emphasized "flexibility" in adjusting timelines—such as delaying auto tariffs after talks with U.S. automakers—but warned of firm action by April 2, reinforcing his "America First" economic stance.

Overall, these updates reflect Trump’s focus on immigration, foreign policy negotiations, government funding, military action, and trade, consistent with his administration’s aggressive early agenda. Some of Trump’s actions and rhetoric are also causing a rapid fall in his approval rating.

Trump/US-Xi/China meeting may be imminent.

Late Monday (17th March 25), US President Trump announced on Monday that Chinese leader Xi Jinping would visit Washington soon amid escalating trade war tensions. Trump, speaking at an event in Washington, noted recent visits from other world leaders and said Xi's visit would happen in the "not too distant future." Since returning to office, Trump has increased tariffs on Chinese imports twice, citing Beijing’s failure to curb the flow of illegal fentanyl. Reports suggest US and Chinese officials are considering a potential June meeting, coinciding with both leaders’ birthdays, but no specific timing has been confirmed. Traditionally, US and Chinese leaders alternate visits, but Trump has yet to visit Beijing since his return to office. But Trump previously also said (after taking charge of the White House) he would visit China shortly. Chinese President XI is one of the few influential global leaders, who avoided pro-active meetings with Trump 2.0.

Conclusions:

Overall, the Gaza war situation remains fluid, with both sides entrenched in their positions—Israel demanding immediate hostage releases and Hamas insisting on a permanent ceasefire and troop withdrawal. International mediators continue to call for urgent talks to prevent further escalation, but as of now, the ceasefire is over, and hostilities have resumed. It also seems that Hamas is trying to keep some hostages in its custody to ensure no big Israel attack. But there may be some significant progress on the Ukraine war ceasefire as Trump and Putin set for a telephone call and we may also see more normalization of the US-Russia relationship.

On the Trade war front, it now seems that Trump may scale back his Canada and Mexico tariffs narratives, but may stick to his reciprocal tariffs rhetorics. However, Trump may eventually provide another quarter to prepare for domestic supplies as despite the Trump tariffs war, the US still needs to import it even at a relatively higher cost (after Trump tariffs).

The US Treasury Secretary Scott Bessent said Thursday that his previous comments about a "detox period" for the U.S. economy did not mean that a recession was necessary.

·       Not at all. Doesn't have to be, because it will depend on how quickly the baton gets handed off. Our goal is to have a smooth transition.

·       The U.S. would undergo a transition period as the federal government tries to cut spending, including laying off public sector workers.

·       We have excess employment in the government, and those people can be moved to the private sector.

·       Current levels of government spending are "unsustainable

·       There are two parts to this: It's accelerating the economy, growing the revenue base — and controlling expenses. In the U.S., we do not have a revenue problem, we have a spending problem

Market Wrap:

On Monday (17th March 25), Wall Street surged on hopes of a less hawkish Fed stance after Softer-than-expected retail sales data, which showed a modest 0.2% rise in February; progress of Ukraine war ceasefire and hopes of less hawkish Trump trade war policy., especially with China. The S&P 500 gained 0.6%, the Dow Jones added 353 points, and the Nasdaq 100 advanced 0.5%.  Despite the broader market rally, major tech stocks lagged, with Tesla tumbling 4.8% and Nvidia slipping 1.7% as investors reevaluated their lofty valuations amid ongoing economic uncertainty. Treasury Secretary Bessent sought to reassure markets, characterizing corrections as “healthy”, and acting as a detox while acknowledging that recession risks remain.

On Monday, Wall Street was boosted by real estate, energy, consumer staples, industrials, banks & financials, materials, healthcare, utilities, techs, and communication, while dragged by consumer discretionary. Dow was boosted by Nike, Walmart, United Health, 3M, IBM, Goldman Sachs, Travelers, McDonald’s, Coca Cola and Amgen, while dragged by NVIDIA, Amazon, and American Express. Gold and oil surged on escalating Gaza war and Middle East tensions involving Iran and US/Israel.

Weekly-Technical trading levels: DJ-30, NQ-100, Gold and Dax

Looking ahead, whatever the fundamental narrative, technically Dow Future (CMP: 43850) now has to sustain over 44050 for any further rally to 44250/44400-44500/44800 and 45000/45200-45300/45500 and 45700/45800-45900/46000 in the coming days; otherwise sustaining below 44000, DJ-30 may again fall to 43800/43675-43300/43150 and 42800/42700-42000/41900 in the coming days.

Similarly, NQ-100 Future (20915) has to sustain over 21050 for a further rally to 21300/21500-21700/21850 and 22050/22200-22350/22500 and 22700/23000-23300/23500 in the coming days; otherwise, sustaining below 21000, NQ-100 may again fall to 20900/20600-20400/20150 in the coming days.

Technically, DAX-40 (22500) now has to sustain over 22700 for a rally to 22800/22/900-23000/23500 and 23600/23700-23800/24000; otherwise, sustaining below 22650/22550, may again fall to 22250/21850-21700/21100 and 20800/20000-19700/19000-18850 in the coming days.

Also, technically Gold (CMP: 2985) has to sustain over 3005-3010 for a further rally t 3025/3060-3075/3100 and 3125/3150-3200/3225; otherwise sustaining below 3000-2995, Gold may again fall to 29650/2925-2900/2880 and 2850/2835-2810/2780-2780 and 2745/2725-2695/2665 and further 2635/2600-2585/2560 in the coming days.