[Goldman Sachs Report] The 'VAR Shock' Hitting Asian Markets and the Eerie Calm of the S&P 500

Subtitle: Forced Selling Triggered by Hormuz Energy Disruption and Extreme Volatility Beneath the Surface

Original Report Date: March 4, 2026

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📌 3-Line Summary

- 'VAR Shock' & Forced Selling in Asia: The 12% crash in Korea's KOSPI is a 'comprehensive VAR shock' triggered by fears of energy disruption in Hormuz. Beyond fundamental damage, indiscriminate 'forced selling' by leveraged investors to meet margin calls battered the market.
- S&P 500 Illusion (Calm Before the Storm): While the US S&P 500 index appears superficially calm, individual stock volatility beneath the surface is extreme, rivaling the 2008 financial crisis. Active rotation between sectors and factors amidst negative news is offsetting the index's directionality.
- Investment Strategy (Seizing Asymmetric Opportunities): Goldman Sachs views buying bonds now as an 'asymmetric opportunity' with little to lose and much to gain. They advise defensive positioning in equities and suggest that now is the time to selectively accumulate emerging market stocks where speculative positions have been cleared.

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📖 In-Depth Report Analysis

In recent days, financial markets, particularly Asian stock markets including Korea's, have experienced historic crashes and extreme volatility. The Goldman Sachs sales desk, through urgent reports, detailed the 'extreme volatility' hidden beneath the seemingly calm US S&P 500 index and diagnosed the 'forced selling' situation currently afflicting Asian markets.

■ 1. The 'VAR Shock' and Forced Selling Hitting Asian Markets

Goldman Sachs highlighted the phenomenon where Korea's KOSPI index plunged 12% overnight, recording its worst drop in 46 years. The core catalyst for the selling spree across Asian markets, including Japan, was the worsening Iran situation and concerns over energy supply through the Strait of Hormuz.

Before the conflict, about 6 LNG tankers passed through the Strait of Hormuz daily; currently, this flow has collapsed to almost 'zero.' Despite Asia's high dependence on imported energy, the market had not priced in this 'energy blockade risk' at all.

This crash is a 'comprehensive VAR (Value at Risk) shock' beyond simple fundamental damage. As stocks, bonds, and currency values simultaneously plummeted, pushing market volatility beyond control limits, institutional and leveraged investors engaged in 'forced risk reduction (forced deleveraging)'—dumping 'what they could sell,' not 'what they wanted to sell,' to resolve margin calls. The impact was maximized as speculative buying positions built up during the KOSPI's surge over the past two years were liquidated all at once.

■ 2. Geopolitical Crisis: The Key is 'Prolonged Energy Blockade'

Typically, stock markets are resilient to geopolitical crises. Over the past 40 years, 8 weeks after US air campaign in the Middle East/North Africa, the S&P 500 rose 95% of the time. However, the sole exception is 'when energy flows are blocked.' The 2022 European natural gas price spike is a prime example.

The key now is the duration of the situation. While neither Europe nor the US can stand by and watch a prolonged Hormuz blockade, the possibility of the strait being paralyzed by Iran's asymmetric capabilities (missiles, drones) still weighs on the market. Goldman Sachs warned that while a gradual recovery could see Brent crude fall to $66 in Q4 with limited market impact, if the blockade extends for another month, oil prices could soar to $100.

■ 3. Calm Before the Storm: The S&P 500's Eerie Calm and 'Historic' Individual Stock Volatility

The most interesting point is that despite massive negative factors like soaring oil prices and AI doubts, the S&P 500 index is treading water. This is not because the market is strong, but due to 'extreme volatility' beneath the index's surface. Active rotation between specific sectors and factors amidst bad news is offsetting the overall direction of the index.

The data is clear. The average volatility of individual S&P 500 stocks is currently nearly 'three times' higher than the index's overall volatility. This is the highest level in decades, rivaling the 2008 financial crisis or the dot-com bubble era. While the index looks calm, individual stocks are experiencing extreme volatility, and hedge funds have already significantly reduced their risk exposure.

■ 4. What to Buy Now? (Goldman Sachs Investment Strategy)

Goldman Sachs proposed the following strategies in this extreme situation:

- Buy Bonds (Asymmetric Opportunity): Bonds are currently an 'asymmetric' investment with little to lose and much to gain. They act as a buffer during stock market declines and can rise significantly if oil prices stabilize.
- Defensive Equities: Recommend maintaining 'defensive positions' in bond-like sectors such as Healthcare, REITs, and Telecommunications.
- Caution on Gold: Despite recent strength, be wary of potential forced selling to raise cash due to a strong dollar and margin calls in Asian markets.
- Opportunity in Emerging Market Stocks: Emerging markets, battered by massive selling from Asian retail investors, have had excessive speculative positions cleared. Now may be a 'buying opportunity' to selectively accumulate these stocks.

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💡 StockHub Insight & Comments

This Goldman Sachs report lucidly explains the causes of the current market's 'cognitive dissonance.' The crash in Asian markets was driven not just by fear, but by a mechanical selling bomb of 'forced liquidation (margin calls)' by leveraged investors. Conversely, we must face the reality that the calm of the US market is an illusion, with immense volatility swirling in individual stocks beneath the surface.

The core is 'energy.' Whether the blockade of the Strait of Hormuz prolongs into a real energy shock will determine the market's future direction. Investors should endure the current volatility and, as Goldman Sachs advises, strengthen their portfolio's safety net with 'bonds' and 'defensive stocks,' while carefully considering a contrarian strategy of incrementally buying high-quality 'emerging market stocks' from which speculative froth has been removed.