Stock Market Update

Equity futures point to a higher opening this morning after the major averages finished mostly lower to start the holiday-abbreviated week. Yesterday's session was a bit of a whirlwind as the market navigated more mixed signals surrounding the conflict in Iran. Strength was relatively broad, but renewed weakness across semiconductor names weighed heavily on the major averages.

This morning's early gains are largely being attributed to developments on the geopolitical front. In particular, The Wall Street Journal reported that President Trump has told aides he is willing to end U.S. military operations against Iran even as the Strait of Hormuz remains closed, as trying to secure the waterway would likely push the operation past its 4-to-6 week timeline.

Still, the current state of negotiations remains unclear, with The New York Times reporting that Iran's fractured leadership is making it tough for Iran to coordinate. The Pentagon will hold a briefing on Iran at 8:00 a.m. ET.

Investors will receive a few economic data points this morning, including the March Consumer Confidence report (Briefing.com consensus 88.0; prior: 91.2).

The market will also hear from Fed Governor Michelle Bowman (voting FOMC member), Fed Governor Michael Barr (voting FOMC member), and Chicago Fed President Austan Goolsbee (nonvoting FOMC member). Notably, Fed President Jerome Powell (voting FOMC member) said yesterday that inflation expectations remain well anchored beyond the near term, which resulted in a sharp drop in the market's implied probabilities for a rate hike later this year.

In corporate news:

• Airport lines are easing after TSA agents get back pay, according to Bloomberg.
• Apellis Pharmaceuticals (APLS 40.82, +23.73, +138.9%) is set to be acquired by Biogen (BIIB 186.05, -1.52, -0.8%) for $41.00 per share in cash.
• Netflix (NFLX 92.90, -0.07, -0.0%) is interested in expanding its NFL package from two games to four games, according to The Wall Street Journal. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Tuesday on a mostly lower note with South Korea's Kospi (-4.3%) falling to its lowest level since early February while India's markets were closed for a holiday. Japan's Nikkei: -1.6%, Hong Kong's Hang Seng: +0.2%, China's Shanghai Composite: -0.8%, India's Sensex: CLOSED, South Korea's Kospi: -4.3%, Australia's ASX All Ordinaries: +0.3%.

In news:

• Japan's Tokyo CPI for March decelerated to 1.7% from 1.8%, but multiple companies have indicated plans for price hikes, suggesting that inflation will reaccelerate in the April reading.
• China's liquor giant Kweichow Moutai also announced price hikes.
• China's official Manufacturing (50.4) and Non-Manufacturing PMI (50.1) readings returned to expansion in March.
• South Korea is planning an extra budget of KRW26.2 trln to offset the impact of the war with Iran.

In economic data:

• China's March Manufacturing PMI 50.4 (expected 50.1; last 49.0) and Non-Manufacturing PMI 50.1 (expected 49.9; last 49.5)
• Japan's February Retail Sales -0.2% yr/yr (expected 0.9%; last 1.8%), February Industrial Production -2.1% m/m, as expected (last 4.3%), February Unemployment Rate 2.6% (expected 2.7%; last 2.7%), March Tokyo CPI 1.4% yr/yr (last 1.6%) and March Tokyo Core CPI 1.7% yr/yr (expected 1.8%; last 1.8%). February Housing Starts -4.9% yr/yr (expected -4.5%; last -0.4%) and Construction Orders 42.7% yr/yr (last 5.7%)
• South Korea's February Retail Sales 0.0% m/m (last 2.9%). February Industrial Production 5.4% m/m (expected 1.8%; last -2.4%); -2.2% yr/yr (expected 6.0%; last 6.8%). February Service Sector Output 0.5% m/m (last -0.2%)
• India's Q3 trade deficit $87.40 bln (last deficit of $93.60 bln)
• Singapore's February Bank Lending SGD893.6 bln (last SGD887.5 bln)
• Australia's March Private Sector Credit 0.6% m/m, as expected (last 0.5%) and March Housing Credit 0.6% m/m (last 0.6%)
• New Zealand's March ANZ Business Confidence 32.5 (last 59.2)

Major European indices trade in the green amid reports that President Trump is willing to end the war with Iran without reopening the Strait of Hormuz. STOXX Europe 600: +0.9%, Germany's DAX: +1.2%, U.K.'s FTSE 100: +1.0%, France's CAC 40: +0.6%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +1.1%.

In news:

• Eurozone's CPI accelerated to 2.5% yr/yr from 1.9% in the flash reading for March.
• The U.K. reported in-line growth for Q4 (0.1% qtr/qtr) while France's Consumer Spending (-1.4% m/m) decreased more than expected in February.
• European Central Bank policymaker Muller said that it is probable that rates will have to rise in the coming quarters while policymaker Kazimir said that the central bank will need to act decisively if the Iran war drags on.
• Germany's Economic Institutes lowered their domestic growth outlook for 2026 to 0.6% from 1.3% while the forecast for 2027 was reduced to 0.9% from 1.4%.
• The inflation forecast for 2026 was increased to 2.8% from 2.0% while the outlook for 2027 was increased to 2.8% from 2.3%.

In economic data:

• Eurozone's flash March CPI 1.2% m/m (last 0.6%); 2.5% yr/yr (expected 2.6%; last 1.9%). March Core CPI 0.8% m/m (last 0.8%); 2.3% yr/yr (expected 2.4%; last 2.4%)
• Germany's February Retail Sales 0.7% yr/yr (expected 1.0%; last 0.9%). February Import Price Index 0.3% m/m (expected 0.7%; last 1.1%); -2.3% yr/yr (last -2.3%). March Unemployment Change 0 (expected 2,000; last 1,000) and March Unemployment Rate 6.3%, as expected (last 6.3%)
• U.K.'s Q4 GDP 0.1% qtr/qtr, as expected (last 0.1%); 1.0% yr/yr, as expected (last 1.2%). Q4 Business Investment -2.5% qtr/qtr (expected -2.7%; last 1.1%), Q4 Current Account deficit GBP18.4 bln (expected deficit of GBP24.0 bln; last deficit of GBP10.7 bln). March Nationwide HPI 0.9% m/m (expected 0.0%; last 0.3%); 2.2% yr/yr (last 1.0%). Q4 Business Investment 2.0% yr/yr, as expected (last 3.5%)
• France's flash March CPI 0.9% m/m, as expected (last 0.6%); 1.7% yr/yr (expected 1.6%; last 0.9%). February PPI -0.2% m/m, as expected (last 0.5%); -2.4% yr/yr (last -2.3%). February Consumer Spending -1.4% m/m (expected -0.3%; last 0.4%)
• Italy's flash March CPI 0.5% m/m (expected 0.6%; last 0.7%); 1.7% yr/yr (last 1.5%). January Industrial Sales -0.3% m/m (last 0.6%); -1.0% yr/yr (last 3.5%) o Spain's January Current Account surplus EUR2.73 bln (last surplus of EUR1.80 bln)