The S&P 500 Index ($SPX) ( SPY ) is up +.07% today, the Dow Jones Industrial Average ($DOWI) ( DIA ) is down -0.06%, and the Nasdaq 100 Index ($IUXX) ( QQQ ) is up +0.44%.
Stocks initially retreated today after the US and Israel launched joint military strikes against Iran. President Trump has said that combat operations will continue for several weeks until all targets are completed. President Trump has asked the leaders of Iran to surrender, but the head of Iran’s national security has said that he has no intention of talking to the United States.
Stocks rebounded in dip buying and February’s ISM manufacturing index expanded more than expected. Also, the war in Iran is increasing defense stocks and energy producers today.
The war in Iran has fueled safe-haven demand for the precious metal, sending gold prices to one-month highs. Bond yields initially fell on news of a war with Iran over asylum seekers, but have since rallied, with the 10-year T-note yield up 10 bp to 4.04% amid concerns that higher oil prices will lead to faster inflation.
WTI crude jumped more than +65% to an 8.25-month high as tanker traffic through the Strait of Hormuz, which runs off Iran’s coast and handles a fifth of the world’s oil, was largely halted after Iran attacked three oil tankers. Iran pumps about 3.3 million bpd, or about 3% of global production, but it is strategically important given its location along the Strait of Hormuz. Goldman Sachs estimates the real-time risk premium for crude oil at $18/bbl, assuming the impact of a six-week total shutdown on oil traffic in the Strait of Hormuz.
The February US ISM manufacturing index fell -0.2 to 52.4, stronger than expectations of 51.5. February’s ISM prices sub-index rose +11.5 to a 3.5-year high of 70.5, stronger than expectations of 60.0.
This week’s market focus will be on US-Iran war news, corporate earnings, and economic news. On Wednesday, February ADP employment change is expected to increase by +40,000. Also, February’s ISM services index is expected to fall -0.3 to 53.5. In addition, the Fed publishes its badge book. On Thursday, weekly initial jobless claims are expected to rise by +3,000 to 215,000. Also, Q4 non-farm productivity is expected to rise +1.8%, and Q4 unit labor costs are expected to rise +2.0%. On Friday, February non-farm payrolls are expected to increase by +60,000, and the February unemployment rate will remain unchanged at 4.3%. Also, February average hourly earnings are expected to be +0.3% m/m and +3.7% y/y. In addition, February retail sales are expected to fall -0.3% m/m and February retail sales of previous vehicles are expected to remain unchanged.
With Q4 earnings season nearing its end, more than 90% of S&P 500 companies have reported earnings results. Earnings are a positive factor for stocks, with 74% of the 472 S&P 500 companies reporting that they beat expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to increase to +8.4% in Q4, marking the tenth consecutive quarter of year-over-year gains. Excluding top seven megacap technology stocks, Q4 earnings are expected to increase +4.6%.
Markets are discounting a 2% chance of a -25 bp rate cut at the next policy meeting on March 17-18.
Foreign stock markets are mixed today. The Euro Stoxx 50 fell to a 1.5-week low and is down -2.42%. China’s Shanghai Composite climbed to a 1.5-month high and closed up +0.47%. Japan’s Nikkei stock fell 225 – 1.35%.
Interest rates
June 10-year T-notes (ZNM6) fell by -21 points today. The 10-year T-note yield is up +10.5 bp to 4.042%. June T-notes moved higher and lower than the contract, and the 10-year T-note yield recovered from an 11.75-month low of 3.922% and moved higher. T-notes rallied early today on increased safe-haven demand as stock index futures sold off after the U.S. strike. However, T-notes gave up their gains and WTI crude fell after hitting a 8.25-month high, which raised inflation expectations, as the 10-year breakeven inflation rate rose to a high of 1-2.300%. Losses in T-notes accelerated today after the February ISM rates-paid sub-index hit a 3.5-year high, signaling price pressures.
European government bond yields are rising today. The 10-year German bond yield rose +6.5 bp to 2.708%. The 10-year UK gilt yield rose to a 1-week high of 4.383% and +14.1 bp to 4.374%.
German John retail sales fell -0.9% m/m, weaker than expectations for unchanged m/m and the biggest decline in 19 months.
Swaps discount a 1% chance of a -25 bp rate cut by the ECB at its next policy meeting on March 19.
US stock movers
Chipmakers and AI infrastructure stocks are moving lower today, a negative factor for the overall market. Seagate Technology Holdings Plc is down more than -5% to lead the losers on the Nasdaq 100. Also, Western Digital ( STX ), Advanced Micro Devices ( AMD ), and ARM Holdings Plc ( ARM ) are down more than -3%. In addition, NXP Semiconductor NV ( NXPI ), ASML Holding NV ( ASML ), and Qualcomm ( QCOM ) are down more than -2%. Finally, Applied Materials ( AMAT ), Intel ( INTC ), Broadcom ( AVGO ), Micron Technologies ( MU ), and Texas Instruments ( TXN ) are down more than -1%,
Airline stocks are under pressure today as crude oil prices surged more than +6% to an 8.25-month high, which will push up jet fuel prices and potentially cut into airlines’ profits. American Airlines Group ( AAL ) is down more than 45%, and United Airlines Holdings ( UAL ) is down more than -3%. Also, Delta Air Lines ( DAL ) and Southwest Airlines ( LUV ) are down more than -2%.
Cruise line operators are on the move today, with Norwegian Cruise Line Holdings ( NCLH ) down -9% after full-year EPS forecast of $2.38, weaker than consensus of $2.59. Also, Carnival (CCL) is down more than -8%, Viking Holdings Ltd (VIK) is down more than -4%, and Royal Caribbean Cruises Ltd (RCL) is down more than -3%.
Homebuilders are falling today with a +10 bp jump in 10-year T-note yields, which will raise mortgage rates and possibly reduce the likelihood of home sales. KB Home ( KBH ), PulteGroup ( PHM ), Toll Brothers ( TOL ), Lennar ( LEN ), and DR Horton ( DHI ) are down more than -3%.
Defense stocks are rising today as the war in Iran boosts their earnings. Ambient air volume (AVAV) is over +12%. Also, Northrop Grumman ( NOC ) and RTX Corp ( RTX ) are up more than +4%. Additionally, Lockheed Martin (LMT) is up more than +3%, and L3Harris Technologies (LHX) is up more than +2%. Finally, Huntington Ingles Industries (HII) and General Dynamics (GD) are up more than +1%.
Energy producers and energy services providers rallied today with WTI crude oil (CLJ26) up more than +8% to a 8.25-month high. Marathon Petroleum ( MPC ) is up more than +4%, and APA Corporation ( APA ), ConocoPhillips ( COP ), Devon Energy ( DVN ), and Valero Energy ( VLO ) are up more than +3%. Also, Occidental Petroleum (OXY) and Phillips 66 (PSX) are up more than +2%, and Chevron (CVX), Exxon Mobil (XOM), and Diamondback Energy (FANG) are up more than +1%.
Cryptocurrency exposed stocks are moving higher today, with Bitcoin (^BTCUSD) up more than +6%. MARA Holdings ( MARA ) is up more than +8%, and Strategy ( MSTR ) is up more than +7% for the leading gainers on the Nasdaq 100. Also, Galaxy Digital Holdings ( GLXY ) is up more than +5%, Coinbase Global ( COIN ) is up more than +4%, and Riot Platforms is up more than +3%.
Unicure ( QURE ) is down more than -34% after U.S. regulators said the company must conduct a pivotal study before receiving approval for its gene therapy for Huntington’s disease.
AES Corp. ( AES ) is down more than -17% to lead the losers on the S&P 500 after agreeing to be acquired by a consortium led by Global Infrastructure Partners and EQT for $15 in cash.
Elevance Health ( ELV ) is down more than -3% after it said the U.S. government plans to suspend enrollment in its Medicare Advantage prescription drug plans until March 31, unless compliance issues are resolved.
RadNet ( RDNT ) is up more than +4% after reporting 4Q4 revenue of $547.7 million, better than consensus of $515.4 million.
EchoStar Corp (SATS) is up more than +2% after reporting Q4 revenue of $3.80 billion, above the consensus of $3.77 billion.
Revenue Reports (3/2/2026)
AAON Inc (AAON), ADT Inc (ADT), AES Corp/The (AES), AST SpaceMobile Inc (ASTS), Ingram Micro Holding Corp (INGM), MongoDB Inc (MDB), Norwegian Cruise Line Holdings (NCLH), Sealed Air Corp (SEE), Trump Media & Technology Group (DJT).
As of the date of publication, Amir Espland had no positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
