The S&P 500 Index ($SPX) ( SPY ) is up +0.03% today, the Dow Jones Industrial Average ($DOWI) ( DIA ) is down -0.11%, and the Nasdaq 100 Index ($IUXX) ( QQQ ) is up +0.63%. March E-mini S&P futures (ESH26) are +0.07% higher, and March E-mini Nasdaq futures (NQH26) are +0.53% higher.
Stock indexes rose today after a report that Iran has made indirect contact with the United States to end the conflict, raising hopes that the conflict will end sooner than expected. The New York Times reported that Iranian intelligence ministry officials used backchannels to contact the CIA a day after the US-Israeli strikes began. Stocks added to their gains on signs of a resilient U.S. labor market after the February ADP jobs report showed employers added more jobs than expected.
Stock gains were limited amid global trade tensions after Treasury Secretary Scott Besant said a proposed 15% tariff on U.S. imports could take effect this week.
Crude oil prices retreated from sharp overnight gains and fell more than -1% on a New York Times report that said Iranian activists had offered the United States to discuss terms to end the conflict. Crude oil prices were also pushed lower by shipping on Tuesday, when President Trump said the United States would guarantee the free flow of energy through the Strait of Hormuz with insurance guarantees and even seahorses.
However, the Strait of Hormuz remained closed after Iran’s Islamic Revolutionary Guard Corps said “we will fire any ship that tries to pass through” the strait, which runs off Iran’s coast and handles a fifth of the world’s oil. The closure of the Strait of Hormuz forced Iraq, OPEC’s second-biggest producer, to shut down oil production at one of its largest oil fields in Somalia as storage tanks filled up. Also, Kairos reported today that four of six tanks at Saudi Arabia’s Ras Tanura refinery are full, and the Juma terminal on the country’s east coast is quickly running out of excess capacity. 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.
In addition, debris from an Iranian drone caused a major fire in the UAE’s major oil trading hub, Fujairah, a major oil storage hub in the Middle East. Natural gas prices in Europe hit three-year highs on Tuesday after Qatar shut down the world’s largest natural gas exporter, the Ras Laffan plant, following an Iranian drone attack. Ross Laffan produces about 20% of the world’s liquefied natural gas.
US MBA mortgage applications rose +11% in the week ended February 27, the purchase mortgage sub-index rose +6.1% and the refinance mortgage sub-index rose +14.3%. The average 30-year fixed-rate mortgage was unchanged from last week at 6.09%.
US February ADP jobs rose +63,000, stronger than expectations of +50,000.
Statements today from Cleveland Fed President Beth Hammock were tough, Hammock said it was important to get inflation back on target and that “Fed policy may be on hold for some time.”
This week’s market focus will be on US-Iran war news, corporate earnings, and economic news. Later today, the February ISM services index is expected to fall -0.3 to 53.5. Also, 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 were a positive factor for stocks, with 73% of the 481 S&P 500 companies beating 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 is up +1.67%. The China Shanghai Composite fell to a 3.5-week low and closed at -0.98%. Japan’s Nikkei Stock 225 fell to a 3.5-week low and closed at -3.61%.
Interest rates
June 10-year T-notes (ZNM6) fell by -4 points today. The 10-year T-note yield is +0.8 bp to 4.067%. Today’s recovery in stocks dampened safe-haven demand for government debt and weighed on T-notes. Also, today’s stronger-than-expected February ADP hiring report was bearish for T-notes. In addition, sarcastic comments today from Cleveland Fed President Beth Hammick are reducing T-notes when she said, “Fed policy may be on hold for some time.” Losses in T-notes were limited after crude oil prices edged lower overnight, dampening inflation expectations.
European government bond yields are trending lower today. German 10-year bond yields fell -0.3 bp to 2.749%. The 10-year UK gilt yield fell -4.0 bp to 4.431%.
Eurozone John PPI rose +0.7% m/m and fell -2.1% y/y, stronger than expectations of +0.2% m/m and -2.6% y/y.
The eurozone unemployment rate fell -0.2 to a record low of 6.1%, showing a stronger labor market than expected at 6.2%.
Swaps discount a 0% 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 moved higher today, supporting gains in the broader market. Seagate Technology Holdings Plc ( STX ) is up more than +3%, and Micron Technologies ( MU ), Western Digital ( WDC ), ARM Holdings Plc ( ARM ), and Lam Research ( LRCX ) are up more than +2%. Also, Applied Materials ( AMAT ), KLA Corporation ( KLAC ), Marvell Technologies ( MRVL ), and Analog Devices ( ADI ) are up more than +1%.
Cryptocurrency exposed stocks today with Bitcoin (^BTCUSD) up more than +5% in 3 weeks. Coinbase Global ( COIN ) is up more than +9% for the leading gainers in the SP 500, and Galaxy Digital Holdings ( GLXY ) is up more than +8%. Also, Strategy ( MSTR ) is up more than +7% for the leading gainers on the Nasdaq 100, and MARA Holdings ( MARA ) is up more than +4%. Additionally, Riot Platforms (RIOT) is up more than +3%.
Energy producers and energy service providers are under pressure today, with WTI crude oil down more than 1%. APA Corporation ( APA ) is down more than -3% to lead the losers in the S&P 500, and ConocoPhillips ( COP ), Halliburton ( HAL ), Devon Energy ( DVN ), and Exxon Mobil ( XOM ) are down more than -2%. Also, Diamondback Energy (FANG), Chevron (CVX), and Occidental Petroleum (OXY) are down more than -1%.
Ross Stores ( ROST ) is up more than +7% after reporting 4Q4 sales of $6.64 billion, better than the $6.40 billion consensus.
nLight Inc. (LASR) is up more than +7% after Baird initiated coverage on the stock with an outperform recommendation and a $95 price target.
Moderna ( MRNA ) is up more than +6% after it agreed to pay Genevent $950 million to settle a lawsuit related to the delivery technology behind its Covid shot, a deal that some analysts said was better than feared.
Brown-Forman (BF.B) is up +4% after reporting Q3 net sales of $1.06 billion, stronger than the $1.00 billion consensus.
Target ( TGT ) is up more than +3% after Telsey Advisory Group raised the stock to outperform the market with a $145 price target.
Alcoa ( AA ) is up +3% after S&P Global Ratings upgraded the company’s long-term credit rating from BB to BB+ with a stable outlook.
Dow Inc. ( DOW ) is up more than +1% after KeyBanc Capital Markets upgraded the stock to sector overweight with a $38 price target.
Gitlab ( GTLB ) is down more than -7% after forecasting 2027 revenue of $1.10 billion to $1.12 billion, the midpoint below consensus of $1.12 billion.
Webtoon Entertainment ( WBTN ) is down more than -5% after reporting a Q4 EPS loss of -$2.36, a much wider loss than the -12 cent consensus.
Abercrombie & Fitch ( ANF ) is down more than -5% after Q1 net sales were forecast to improve from +1% to +3%, below consensus of +4.5%.
Frontline Plc (FRO) is down more than -3% after Arctic Securities ASA downgraded the stock to Buy to Hold.
Earnings Reports (3/4/2026)
Bath & Body Works Inc ( BBWI ), Broadcom Inc ( AVGO ), Brown-Forman Corp ( BF/B ), Okta Inc ( OKTA ), Veeva Systems Inc ( VEEV ).
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
