Stock Market Update

The S&P 500 futures are up 15 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 103 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are up 81 points and are trading 0.2% above fair value.

Equity futures point to a higher open for the major indices. Pre-open gains in some mega caps have provided a nice boost to the contracts linked to the S&P 500 and Nasdaq 100.

Tariffs uncertainty is still top of mind after President Trump gave no indication that he plans to remove tariffs in his congressional address and said he is fine with "a little disturbance." Secretary of Commerce Howard Lutnick told reporters, however, that the Trump administration could announce tariff relief on Mexican and Canadian goods as soon as today, according to Bloomberg.

Treasuries are seeing some selling interest. The 10-yr yield is up four basis points to 4.25%. 

Separately, the weekly MBA Mortgage Applications Index jumped 20.4%. Other data this morning includes the ISM Services Index at 10:00 ET.

In corporate news:

• Alphabet (GOOG 173.59, +0.98, +0.6%): reportedly urging the DOJ to reverse course on breaking up the company, according to Bloomberg; UK CMA announces SMS investigation into Google’s mobile ecosystem
• Ross Stores (ROST 135.00, -0.97, -0.7%): misses by $0.01, reports revs in-line, comps were +3%; guides Q1 EPS below consensus; guides FY26 EPS below consensus; increases dividend
• Foot Locker (FL 17.41, +0.04, +0.2%): beats by $0.14, misses on revs; guides FY26 EPS below consensus, revs below consensus
• Dollar Tree (DLTR 67.51, +0.83, +1.2%): announced that Stewart Glendinning will become the company's next CFO effective March 30, 2025
• Disney (DIS 109.35, +0.34, +0.3%): to eliminate 6% of staff across news and entertainment, according to WSJ
• CrowdStrike (CRWD 360.45, -29.71, -7.6%): beats by $0.17, beats on revs; guides Q1 EPS below consensus, revs slightly below consensus; guides FY26 EPS below consensus, revs in-line
• Box (BOX 31.16, -2.31, -6.9%): beats by $0.01, reports revs in-line; guides Q1 EPS below consensus, revs below consensus; guides FY26 EPS, revs in-line

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the midweek session on a higher note. Japan's Nikkei: +0.2%, Hong Kong's Hang Seng: +2.8%, China's Shanghai Composite: +0.5%, India's Sensex: +1.0%, South Korea's Kospi: +1.2%, Australia's ASX All Ordinaries: -0.7%.
  • In economic data:
    • China's February Caixin Services PMI 51.4 (expected 50.8; last 51.0)
    • Japan's final February Services PMI 53.7 (expected 53.1; last 53.0)
    • South Korea's Q4 GDP 0.1% qtr/qtr, as expected (last 0.1%); 1.2% yr/yr, as expected (last 1.2%)
    • India's final February Services PMI 59.0 (expected 61.1; last 56.5)
    • Hong Kong's February Manufacturing PMI 49.0 (last 51.0)
    • Singapore's January Retail Sales 2.4% m/m (last -2.0%); 4.5% yr/yr (last -2.9%)
    • Australia's final February Services PMI 50.8 (expected 51.4; last 51.2). February AIG Construction Index -3.7 (last -20.0) and AIG Manufacturing Index -8.2 (last -22.7). Q4 GDP 0.6% qtr/qtr, as expected (last 0.3%); 1.3% yr/yr (expected 1.2%; last 0.8%)
  • In news:
    • China's National People's Congress set a growth target for 2025 of about 5.0%, aiming for inflation around 2.0%, and a budget deficit of 4.0%, which was expected.
    • The Chinese government is expected to offer various support to sectors like AI, electric vehicles, other new technologies, and the property sector.
    • CK Hutchinson will sell a 90% stake in ports on both sides of the Panama Canal to BlackRock for $19 bln.
    • Japan's trade minister is expected to visit Washington early next week.
    • Reserve Bank of New Zealand Governor Orr resigned unexpectedly.
• Major European indices trade on a firmly higher note, recovering from yesterday's weakness. STOXX Europe 600: +1.3%, Germany's DAX: +3.2%, U.K.'s FTSE 100: +0.4%, France's CAC 40: +2.0%, Italy's FTSE MIB: +2.3%, Spain's IBEX 35: +1.5%.
  • In economic data:
    • Eurozone's final February Services PMI 50.6 (expected 50.7; last 51.3). January PPI 0.8% m/m (expected 0.3%; last 0.5%); 1.8% yr/yr (expected 1.4%; last 0.1%)
    • Germany's final February Services PMI 51.1 (expected 52.2; last 52.5)
    • U.K.'s final February Services PMI 51.0 (expected 51.1; last 50.8)
    • France's January Industrial Production -0.6% m/m (expected 0.5%; last -0.5%). Final February Services PMI 45.3 (expected 44.5; last 48.2)
    • Italy's final February Services PMI 53.0 (expected 50.9; last 50.4). Q4 GDP 0.1% qtr/qtr (expected 0.0%; last 0.0%); 0.6% yr/yr (expected 0.5%; last 0.5%). January Retail Sales -0.4% m/m (expected 0.3%; last 0.6%); 0.9% yr/yr (last 0.6%)
    • Spain's final February Services PMI 56.2 (expected 55.4; last 54.9)
    • Swiss February CPI 0.6% m/m (expected 0.5%; last -0.4%); 0.3% yr/yr (last 0.4%)
  • In news:
    • Defense contractors are seeing continued strength after Germany's major political parties agreed to relax borrowing rules, setting the stage for increased military spending.
    • This has weighed on regional sovereign debt, boosting Germany's 10-yr yield by 20 basis points to 2.70%, a level not seen since late 2023.