Stock Market Update

Equity futures point to a lower open this morning after stocks posted broad gains in reaction to a dip in oil prices to start the week. Oil moved lower following reports that the Trump administration is expected to announce a multicountry coalition that will help escort tankers through the Strait of Hormuz. 

Reports of renewed hostilities in the area have led to a rise in oil prices this morning. Bloomberg reports that Iran has struck a natural gas field in the UAE, marking its first direct attack on an energy facility since the start of the war. The New York Times also reported that Iran has struck another tanker in the Strait of Hormuz, marking the first attack in five days. 

Currently, crude oil is up $3.35 (+3.6%) to $96.85 per barrel. 

NBC News reported that Israel has killed Iranian security chief Ali Larijani, and while losses are mounting for the Iranian regime, there is not yet a clear resolution to the conflict in sight. Separately, NBC News reports that President Trump told reporters he wants to delay his meeting with Chinese President Xi by a month or so due to the war in Iran.

Headlines are relatively quiet elsewhere, with just a modest batch of earnings reports trickling in this week. Economic data is also on the lighter side this week, though tomorrow will feature the March FOMC decision. The Fed is widely expected to keep rates steady, though the market is eager to receive the Summary of Economic Projections, along with any commentary, as the recent surge in energy prices has muddied the expected policy path. 

In corporate news:

• OpenAI plans to refocus the company on coding and business users, according to The Wall Street Journal. 
• Delta Air Lines (DAL 63.62, +2.78, +4.6%) raised its Q1 revenue guidance. 
• Uber (UBER 77.42, +2.76, +3.7%) is planning to launch a robotaxi fleet powered by NVIDIA's (NVDA 183.50, +0.31, +0.2%) self-driving platform next year, according to Reuters.

Reviewing overnight developments:.

Equity indices in the Asia-Pacific region were mostly higher on Tuesday, with Japan's Nikkei (-0.2%) and China's Shanghai Composite (-0.9%) the notable exceptions. Japan's Nikkei: -0.2%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: -0.9%, India's Sensex: +0.7%, South Korea's Kospi: +1.6%, Australia's ASX All Ordinaries: +0.3%.

In news: 

• Markets generally drafted off the U.S. showing on Monday, while some, namely South Korea, saw a tailwind from NVIDIA's GTC updates.
• As expected, the Reserve Bank of Australia raised its cash rate by 25 basis points to 4.10%, but it was a close 5-4 vote.
• The Bank of Japan will be out with its rate decision on Thursday. It is expected to hold steady at 0.75%, yet there is some chatter that Japan could intervene to support the yen in conjunction with the BOJ decision.
• Separately, President Trump said the U.S. has asked China to delay his meeting with President Xi by a month or so because of his need to attend to the war with Iran.

In economic data:

• Japan's January Tertiary Industry Activity Index -9.2 (prior 8.0)
• South Korea's February Export Price Index +10.7% yr/yr (prior +7.8%) and Import Price Index +1.2% y/yr (prior -0.9%)
• Australia's ANZ Roy Morgan Weekly Consumer Confidence 68.5 (prior 73.4)

Major European indices are trading higher despite oil prices reversing course and heading higher on Tuesday. STOXX Europe 600: +0.4%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.7%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +0.9%.

In news:

• WTI crude futures are up 3.0% to $96.30/bbl and Brent crude futures are up 2.8% to $103.03/bbl.
• The resilience of the equity markets is also notable given some ugly economic sentiment readings for the eurozone and Germany. The ECB will take that into account when it meets Thursday, although it is not expected to prompt a change in its key interest rates at this juncture.

In economic data:

• Eurozone's March ZEW Economic Sentiment -8.5 (expected 26.5; prior 39.4)
• Germany's March ZEW Economic Sentiment -0.5 (expected 39.0; prior 58.3)
• Switzerland's February PPI -0.3% m/m (expected 0.0%; prior -0.2%) and -2.7% yr/yr (prior -2.2%)
• Italy's February CPI 0.7% m/m (expected 0.8%; prior 0.4%) and 1.5% yr/yr (expected 1.6%; prior 1.0%)