Stock Market Update

The S&P 500 futures are up 28 points and are trading 0.5% above fair value, the Nasdaq 100 futures are up 140 points and are trading 0.7% above fair value, and the Dow Jones Industrial Average futures are up 205 points and are trading 0.5% above fair value.

Early trading features a positive bias. The major indices look poised to open higher in a buy-the-dip bid following Friday's declines. 

The market has taken new tariff talk in stride, not reacting much after President Trump said he will announce 25% tariffs on steel and aluminum today, according to Bloomberg.

Stocks related to the aforementioned commodities are higher ahead of the open. Nucor (NUE) trades up about 8% in premarket action and Alcoa (AA) shows a 5% premarket gain.

In corporate news:

• McDonald's (MCD 301.60, +7.30, +2.5%): misses by $0.02, reports revs in-line, Global comps of +0.4%
• Boeing (BA 182.93, +1.44, +0.8%): ticking higher on report it plans to layoff 400 workers on moon rocket program, according to Bloomberg
• Taiwan Semiconductor Manufacturing (TSM 208.38, +2.28, +1.1%): reports January revs increased 35.9% yr/yr to ~NT$209.29 bln
• Cleveland-Cliffs (CLF 10.85, +0.81, +8.1%), Nucor (NUE 140.80, +10.54, +8.1%): President Trump will announce 25% tariffs on steel and aluminum today, according to Bloomberg

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region started the week on a mixed note. Japan's Nikkei: UNCH, Hong Kong's Hang Seng: +1.8%, China's Shanghai Composite: +0.6%, India's Sensex: -0.7%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: -0.4%.
  • In economic data:
    • China's January CPI 0.7% m/m (expected 0.8%; last 0.0%); 0.5% yr/yr (expected 0.4%; last 0.1%). January PPI -2.3% yr/yr (expected -2.2%; last -2.3%)
    • Japan's January Economy Watchers Current Index 48.6 (expected 49.7; last 49.0) and January Bank Lending 3.0% yr/yr (expected 3.1%; last 3.0%). December Current Account surplus JPY2.73 trln, as expected last surplus of JPY3.03 trln).
    • Australia's December Building Approvals 0.7% m/m, as expected (last -3.4%) and Private House Approvals -3.0% m/m, as expected (last -1.7%)
  • In news:
    • President Trump said over the weekend that a 25% tariff on steel and aluminum imports is being imposed immediately.
    • Australia's Prime Minister Albanese said that he will be seeking an exemption from these duties for his country.
    • Japan's Prime Minister Ishiba told President Trump during their meeting that Japan's investment in the U.S. will increase to $1 trln and that Japan will double its defense spending by 2027 and import more energy from the U.S.
• Major European indices trade in the green. STOXX Europe 600: +0.4%, Germany's DAX: +0.4%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.3%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.3%.
  • In economic data:
    • Eurozone's February Sentix Investor Confidence -12.7 (expected -16.4; last -17.7)
  • In news:
    • German Chancellor Scholz said that the EU is ready to offer a quick response if U.S. tariffs target European goods.
    • European Central Bank policymaker de Guindos said that it is very important to avoid a trade war.
    • BP trades firmly higher after Elliott Management acquired a large stake in the energy heavyweight.