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A dangerous escalation has taken place as Israel bombed the Damascus consulate building of Iran, killing 11 people, including 8 high-level Iranian officials.

This act is setting a new precedent, where nations like Iran and Russia may now decide that it's open season to strike Israeli or U.S. embassies all over the world.

U.S. Stocks Move Sharply Lower Amid Renewed Interest Rate Uncertainty

After moving sharply lower early in the session, stocks continue to see considerable weakness throughout the trading day on Tuesday. The Dow and the S&P 500 added to Monday's losses, pulling back further off the record closing highs set last Thursday.

The major averages ended the session off their worst levels of the day but still firmly in the red. The Dow tumbled 396.61 points or 1.0 percent to 39,170.24, the Nasdaq slumped 156.38 points or 1.0 percent to 16,240.45 and the S&P 500 slid 37.96 points or 0.7 percent to 5,205.81.
The early sell-off on Wall Street partly reflected renewed uncertainty about the outlook for interest rates as traders digested recent U.S. economic data.

Last Friday's closely watched inflation data combined with Monday's stronger than expected manufacturing data have raised questions about whether the Federal Reserve will lower rates in June.

Treasury yields moved sharply higher in reaction to the data on Monday and saw further upside during today's session, with the yield on the benchmark ten-year note reaching a four-month high.

While CME Group's FedWatch Tool is currently still indicating 56.3 percent chance the Fed will cut rates by a quarter point in June, that is down from 63.8 percent a week ago.

Traders may also have taken the opportunity to cash in on some of the recent strength in the markets ahead of remarks by Fed Chair Jerome Powell on Wednesday and the release of the monthly jobs report on Friday.

On the U.S. economic front, the Commerce Department released a report showing a significant rebound in factory orders in the month of February.

The Commerce Department said factory orders surged by 1.4 percent in February after plunging by a revised 3.8 percent in January.

Economists had expected factory orders to jump by 1.0 percent compared to the 3.6 percent slump originally reported for the previous month.

Sector News

Networking stocks moved sharply lower over the course of the session, resulting in a 2.7 percent nosedive by the NYE Arca Networking Index.

Substantial weakness was also visible among housing stocks, with the Philadelphia Housing Sector Index plunging by 2.5 percent. The index pulled back further off last Thursday's record closing high.

Airline stocks also showed a significant move to the downside on the day, dragging the NYSE Arca Airline Index down by 1.8 percent.

Healthcare, computer hardware and semiconductor stocks also saw considerable weakness, while energy stocks bucked the downtrend amid a sharp increase by the price of crude oil.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. China's Shanghai Composite Index edged down by 0.1 percent, while Japan's Nikkei 225 Index inched up by 0.1 percent and Hong Kong's Hang Seng Index surged by 2.4 percent.

Meanwhile, the major European markets all moved to the downside on the day. While the German DAX Index slumped by 1.1 percent, the French CAC 40 Index slid by 0.9 percent and the U.K.'s FTSE 100 Index dipped by 0.2 percent.

In the bond market, treasuries extended the sell-off seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 3.6 basis points to a four-month closing high of 4.365 percent.

Looking Ahead

Trading on Wednesday may be impacted by reaction to remarks by Fed Chair Jerome Powell as well as reports on private sector employment and service sector activity.

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The economic consequences of the calamity in Baltimore are likely to be substantial.

A Supply and Demand Shock

Economists call this a "supply shock," and it is likely to lead to a resurgence of goods inflation and possibly temporary shortages of some goods. The rerouting of shipping and subsequent congestion at other ports will mean that even goods that were never destined to come through Baltimore may be subject to delivery delays.

“This period of deflation in goods that we’ve been in for the last six months or so — we are probably coming out of that,” Citigroup economist Andrew Hollenhorst said in a Bloomberg TV interview on Tuesday.

There's also a "demand shock" component. Clearing the channel and rebuilding the bridge will take manpower, materials, and time that would have otherwise gone to other projects. Some of those will have to be put on hold. The additionaldemand will also fuel inflation, particularly in an economy already straining at full employment and near its productive capacity.

Baltimore is one of the largest ports on the eastern seaboard of the United States. It is the fifth largest port on the East Coast by total tons of cargo handled, according to the Bureau of Transportation Statistics, and the seventeenth largest overall in the United States.

Those numbers understate its importance to the U.S. economy. The port is the twelfth largest container port in the U.S., according to Ryan Peterson, the CEO of Flexport. It was ninth in terms of the tonnage and value of foreign cargo, according to the governor of Maryland.

It was the first in terms of the volume of automobiles and light trucks (including 847,158 cars and light trucks), heavy farm and construction machinery, imported sugar, and imported gypsum, the governor’s office said in a statement last year.

"Around the world, about 40 ships, including 34 cargo vessels, have Baltimore listed as a destination, including 10 commercial ships with anchors dropped in nearby waters, according to MarineTraffic, which tracks ships," the New York Times reported last Tuesday.

Baltimore's port is also the second largest terminal for coal exports, handling around 74 million tons of coal last year, according to Bloomberg.

"The collapse of a major Baltimore bridge is likely to shut down coal exports for as many as six weeks and block the transport of up to 2.5 million tons of coal, said Ernie Thrasher, chief executive officer of Xcoal Energy & Resources LLC," Bloomberg reported.

A Costly and Lengthy Recovery

The port is completely shut down in the wake of the collision of the Dali with the Key bridge and the near-total collapse of the bridge. It is likely to take weeks or even months to get the port back in working order given the position of the bridge. Perhaps portions the channel can be cleared more quickly but that is unclear at this time.

The Baltimore Field Office of the Federal Bureau of Investigation said in a press release that there is “no specific and credible information to suggest any ties to terrorism at this time.” United States Attorney for the District of  Maryland Erek L. Barron also dispelled attack rumors.

Editor: This confirms it was terrorism!

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Former U.S. Ambassador to Israel David Friedman lambasted the Biden administration and the Democratic Party over the refusal of the American mission to the United Nations to invoke the U.S. veto to block a Security Council resolution demanding an immediate ceasefire in the Gaza Strip.

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Israeli Prime Minister Benjamin Netanyahu posted a tweet on the social media website X, Wednesday, expressing his sorrow at the passing of Joe Lieberman.

Lieberman was, as noted by The Washington Post, the first Jewish candidate on a national ticket for a major party in the U.S. when he ran as Al Gore's running mate.

"Sara and I grieve with Hadassah and the entire Lieberman family on the passing of our beloved Joe Lieberman," Netanyahu wrote, referring to Sara, his wife, and Hadassah, Joe's spouse, in the remarks.

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Canada’s vibrant Vancouver Islands were shook by almost 2,000 tremors in a single day earlier this month. And some digging around the coast has revealed that this isn’t a cause for concern, rather a profound geological process that  involves the birth of a new ocean floor in the area!

Earlier this month, the Endeavour site, located roughly 240 kilometres offshore and situated on the Juan de Fuca Ridge, experienced a remarkable earthquake swarm in a single day. Unlike the powerful earthquakes that can devastate coastal regions, these tremors were relatively small, registering mostly below a magnitude of one. "Mid-ocean ridges aren't actually capable of producing that large of earthquakes," Zoe Krauss, a doctoral candidate in marine geophysics at the  University of Washington, explains.

What these tremors do reveal is the ongoing process of seafloor spreading. The Endeavour site sits on a mid-ocean ridge, where the Pacific and Juan de Fuca plates are slowly pulling apart. As these plates stretch, they can extend by about 3.3 feet (1 metre) before reaching a critical point. This stretching thins the Earth's crust, creating long fault lines and allowing molten rock (magma) from the mantle to rise up. Eventually, this magma cools and hardens, forming a new ocean floor.

The recent earthquake swarm suggests the seafloor at the Endeavour site may have reached its maximum stretch, triggering these small tremors. According to Krauss, the most likely scenario is that magma is now on its way up to fill the gaps and solidify, adding a new piece to the ocean floor.

This isn't the first time the Endeavour site has shown signs of increased seismic activity. Krauss points out that the region has become more active since 2018, with March 6th marking the peak of this recent swarm. The good news is that  the activity has since calmed down, though it remains slightly more elevated than usual.

The Endeavour site is continuously monitored by the North-East Pacific Time-series Undersea Networked Experiments (NEPTUNE), a network run by Ocean Networks Canada. This ongoing monitoring provides scientists with invaluable data. While the continuous monitoring began in 2011, this is the first time researchers have had access to near real-time data of a magma intrusion event like this. This opens doors to a wealth of new information about the process of ocean floor formation.

For Krauss and her colleagues, the questions are plentiful. They're eager to understand the impact this event might have on the unique ecosystem surrounding the hydrothermal vents at the Endeavour site. Additionally, they're curious about the source of the magma that will ultimately form the new crust. These tiny tremors, far from being a cause for alarm, are a scientist's dream — a window into the dynamic processes that continuously reshape our planet.

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Larry Fink Warns of ‘Snowballing Debt’ Hitting US Economy -Yahoo! Finance

 BlackRock Inc. Chief Executive Officer Larry Fink said the US public debt situation “is more urgent than I can ever remember” and that the country needs to adopt policies to spur economic growth.

The nation can’t rely on taxes and spending cuts to get the problem under control, Fink wrote in his annual letter Tuesday. He raised the prospect of a “bad scenario” akin to Japan’s economy in the late 1990s and early 2000s, which led to a period of austerity and stagnation.

“A high-debt America would also be one where it’s much harder to fight inflation since monetary policymakers could not raise rates without dramatically adding to an already unsustainable debt-servicing bill,” said Fink, 71.

The cost of servicing the debt has already ballooned, and the 3 percentage points in extra interest payments the US government now must pay on 10-year Treasuries compared with three years ago is “very dangerous,” he wrote.

“More leaders should pay attention to America’s snowballing debt,” Fink wrote, saying the US can’t take for granted that investors will continue to want to buy as much US debt. Foreign countries are building their own capital markets and are likely to invest domestically, he said

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