Stock Market Update

Equity futures point to a modestly higher opening this morning after the major averages finished lower yesterday, though well off of their worst levels of the session. 

Stocks faced heightened volatility yesterday, with the broader market moving sharply lower early in the session amid rising oil prices and geopolitical developments before some buying support kicked in as crude oil narrowed its gain for the day. 

Part of the turnaround was attributed to President Trump's announcement that the U.S. Development Finance Corporation has been directed to provide insurance to carriers operating in the Persian Gulf after private insurers pulled coverage due to the conflict with Iran. Bloomberg reported that shippers are calling the assurances a partial fix to the crisis.

The New York Times reports that Iranian operatives reached out to the C.I.A. with an offer to discuss terms for ending the war.  In a separate report, Cleveland Fed President Beth Hammack said that it is too early to tell the economic impacts of the war in Iran and called for rates to remain unchanged "for an extended period of time."

Treasury Secretary Scott Bessent told CNBC that the Trump administration will be making a series of announcements to mitigate the rise in oil prices, and Section 122 global tariffs will likely be raised to 15% this week. 

Elsewhere, the market has a modest batch of earnings reports to asses this morning.

There are a few economic data releases on the calendar, including the February ISM Non-Manufacturing Index (Briefing.com consensus 53.9%) at 10:00 a.m. The MBA Mortgage Applications Index for the week ended February 28 increased 11%, from a prior increase of 0.4%.

In corporate news:

• Gold and silver flows were disrupted due to the Iran war, according to Financial Times. 
• CrowdStrike (CRWD 392.88, +1.56, +0.4%) beat EPS expectations by $0.02 and reported revenues in line. The company guided Q1 EPS in line with revenues above consensus and guided FY27 EPS in line with revenues in line.
• Ross Stores (ROST 210.30, +12.66, +6.4%) beat EPS expectations by $0.10 and beat revenue expectations. The company guided Q1 and FY27 EPS in line, authorized a new share buyback program, and increased its dividend. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended the midweek session on a lower note, with South Korea's Kospi (-12.1%) deepening its reversal from record territory. Japan's Nikkei: -3.6%, Hong Kong's Hang Seng: -2.0%, China's Shanghai Composite: -1.0%, India's Sensex: -1.4%, South Korea's Kospi: -12.1%, Australia's ASX All Ordinaries: -1.9%.

In news:

• Shipping and energy names were among the worst performers in the region while Japanese banks also struggled.
• Japanese refiner Impex cancelled its bond sale due to market conditions.
• China's official PMI readings for February remained in contraction while the private sector readings showed accelerating growth.

In economic data:

• China's February Manufacturing PMI 49.0 (expected 49.1; last 49.3) and Non-Manufacturing PMI 49.5 (expected 49.8; last 49.4). February RatingDog Manufacturing PMI 52.1 (expected 50.1; last 50.3) and RatingDog Services PMI 56.7 (expected 52.3; last 52.3)
• Japan's February Services PMI 53.8, as expected (last 53.7) and February Household Confidence 40.0 (expected 38.2; last 37.9)
• South Korea's January Retail Sales 2.3% m/m (last 0.6%), January Industrial Production -1.9% m/m (expected 0.5%; last 1.5%); 7.1% yr/yr (expected 2.2%; last 1.4%)
• Hong Kong's February Manufacturing PMI 53.3 (last 52.3) and January Retail Sales 5.5% yr/yr (last 6.6%)
• Australia's February Services PMI 52.8 (expected 52.2; last 56.3). Q4 GDP 0.8% qtr/qtr (expected 0.7%; last 0.5%); 2.6% yr/yr (expected 2.2%; last 2.1%). Q4 GDP Chain Price Index 1.4% (last 0.8%)
• New Zealand's Q4 Terms of Trade Index 3.7% qtr/qtr (expected -0.1%; last -2.1%)
• India's February Services PMI 58.1 (expected 58.4; last 58.5)

Major European indices trade on a firmly higher note, recovering some of their losses from the start of the week. STOXX Europe 600: +1.3%, Germany's DAX: +1.5%, U.K.'s FTSE 100: +0.6%, France's CAC 40: +0.8%, Italy's FTSE MIB: +1.4%, Spain's IBEX 35: +1.6%.

In news:

• Adidas and Bayer are under pressure after issuing weak profit guidance for 2026.
• Military contractor Dassault Aviation reported strong results.
• French Finance Minister Lescure said that there is no risk of energy shortages in the coming weeks while Italy's Energy Minister Fratin said that his country is safe when it comes to gas supplies with no severe risk in sight.

In economic data:

• Eurozone's February Services PMI 51.9 (expected 51.8; last 51.8). January Unemployment Rate 6.1% (expected 6.2%; last 6.2%), and January PPI 0.7% m/m (expected 0.2%; last -0.3%); -2.1% yr/yr (expected -2.7%; last -2.0%)
• Germany's February Services PMI 53.5 (expected 53.4; last 53.4)
• U.K.'s February Services PMI 53.9, as expected (last 53.9)
• France's February Services PMI 49.6, as expected (last 49.6)
• Italy's Q4 GDP 0.3% qtr/qtr, as expected (last 0.2%); 0.8% yr/yr, as expected (last 0.7%). January Unemployment Rate 5.1% (expected 5.6%; last 5.5%). February Services PMI 52.3 (expected 52.6; last 52.9)
• Spain's February Services PMI 51.9 (expected 52.9; last 53.5)
• Swiss February CPI 0.6% m/m (expected 0.5%; last -0.1%); 0.1% yr/yr (expected -0.1%; last 0.1%)