The S&P 500 Index ($ SPX ) ( SPY ) closed down -0.94% on Tuesday, the Dow Jones Industrial Average ($ DOWI ) ( DIA ) closed up -0.83%, and the Nasdaq 100 Index ($ IUXX ) ( QQQ ) closed up -1.09%. March E-mini S&P futures (ESH26) fell -0.94%, and March E-mini Nasdaq futures (NQH26) fell -1.11%.
Stock indexes were lower on Tuesday with the S&P 500 falling to a 3.25-month low, the Dow Jones Industrial Average falling to a 2.75-month low, and the Nasdaq 100 falling to a 3.5-month low.
Global stock markets retreated, and crude oil prices and bond yields rose on Tuesday as the war in Iran entered a fourth day with no sign of abating, fueling long-term disruptions to energy markets and fears of rising inflation.
However, on Tuesday, crude oil prices fell back from their best levels, and stocks recovered from their worst levels, after President Trump said he ordered the US Development Finance Corporation to “guarantee, at the most reasonable price, the political risk insurance and the financial security of all maritime trade, especially energy, through the Gulf.” He also said, “If necessary, the US Navy will begin transporting tankers through the Strait of Hormuz as soon as possible.”
WTI crude oil (CLJ26) fell after an adviser to Iran’s Islamic Revolutionary Guard Corps told state television that “we will fire any ship that reaches an 8.5-month high” through the Strait of Hormuz, which runs off Iran’s coast and handles a fifth of the world’s oil. Because storage tanks are full, Goldman Sachs estimates the real-time risk premium for crude oil at $18/bbl, estimating the impact of a six-week shutdown on oil traffic in the Strait of Hormuz.
Also, debris from an Iranian drone caused a huge fire in the UAE’s major oil trading hub, Fujairah, a major oil storage center in the Middle East. European natural gas prices rose more than +22% to a 3-year high on Tuesday after Qatar shut down its Ras Laffan plant, the world’s largest natural gas export facility, after it was hit by an Iranian drone. Ross Laffan produces about 20% of the world’s liquefied natural gas.
President Trump said on Monday that military operations against Iran will continue for several weeks until all targets are met. 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.
“Inflation has been above the Fed’s target for almost five years, so I don’t think we have room for complacency,” Kansas City Fed President Jeff Schmidt said.
NY Fed President John Williams said additional Fed interest rate cuts would be warranted if inflation slows further once most of the effects of tariffs wear off.
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 +50,000. 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 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 were sharply lower on Tuesday. The Euro Stoxx 50 fell to a 2-month low and closed at -3.59%. China’s Shanghai Composite fell from a 10.5-year high and closed at -1.43%. Japan’s Nikkei Stock 225 fell to a 3-week low and closed at -3.06%.
Interest rates
June 10-year T-notes (ZNM6) closed by -2 points on Tuesday. The 10-year T-note yield rose +1.9 bp to 4.054%. June T-notes fell to a 2-week low on Tuesday, and the 10-year T-note yield hit a 2-week high of 4.115%. Higher energy prices on Tuesday raised inflation concerns and weighed on T-note prices, with WTI crude up more than +4% to an 8.5-month high. The 10-year breakeven inflation rate rose to a 2-week high of 2.318% on Tuesday.
T-notes recovered from their worst levels after a sell-off in stocks spurred some safe-haven buying of government debt. Also, crude oil prices rose after President Trump said the United States would provide insurance guarantees and maritime protection for oil tankers and other vessels passing through the Strait of Hormuz.
European government bond yields rose on Tuesday. The 10-year German bund yield rose to a 2.5-week high of 2.814% and ended +4.0 bp at 2.752%. The 10-year UK gilt yield hit a 3-week high of 4.553% and ended +9.7 bp at 4.471%.
Eurozone February CPI rose +1.9% y/y, stronger than expectations of +1.7% y/y. February core CPI rose +2.4% y/y, stronger than expectations of +2.2% y/y.
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 sold off on Tuesday, weighing on the broader market. SanDisk ( SNDK ) closed more than -8% to lead the losers on the S&P 500, and Micron Technology ( MU ) closed more than -7% to lead the losers on the Nasdaq 100. Also, Western Digital ( WDC ) closed more than -7%, and KLA Corporation ( KLAC ) closed more than -6%. In addition, Applied Materials ( AMAT ), Lam Research ( LRCX ), Seagate Technology Holdings Plc ( STX ), and Intel ( INTC ) closed more than -5%, and ASML Holding NV ( ASML ), NXP Semiconductors NV ( NXPI ), and Marvell Technologies ( MRVL ) closed more than -4%. Finally, Advanced Micro Devices ( AMD ), Analog Devices ( ADI ), and Texas Instruments ( TXN ) closed more than -3%.
Mining stocks fell on Tuesday as gold fell more than -3% and silver sank more than -6%. Hekla Mining ( HL ) closed more than -11%, and Coeur Mining ( CDE ) and Angloold Ashanti ( AU ) closed more than -10%. Also, Barrick Mining ( B ) closed more than -8%, Newmont Corporation ( NEM ) closed more than -7%, and Freeport McMorran ( FCX ) closed more than -3%.
Cryptocurrency-exposed stocks were lower on Tuesday as Bitcoin (^BTCUSD) fell more than -1%. Mara Holdings ( MARA ) closed more than -8%, and Riot Platforms ( RIOT ) closed more than -7%. Also, Galaxy Digital Holding ( GLXY ) closed more than -5%, Strategy ( MSTR ) closed more than -3%, and Coinbase Global ( COIN ) closed more than -1%.
Software stocks rallied to limit losses in the broader market on Tuesday. Workday (WDAY) closed up more than +7% for the S&P 500 and Nasdaq 100 leading gainers. Also, Thomson Reuters (TRI) closed more than +5%, and Adobe Systems (ADBE) closed more than -4%. In addition, ServiceNow ( NOW ) and Intuit ( INTU ) closed up more than +3%, and International Business Machines ( IBM ) closed up more than +2% for the leading gainers in the Dow Jones Industrials. Finally, Autodesk ( ADSK ) closed more than +2%, and Salesforce ( CRM ), Microsoft ( MSFT ), and Palantir Technologies ( PLTR ) closed more than +1%.
MongoDB ( MDB ) closed down more than -22% after forecasting 2027 revenue of $2.86 billion to $2.90 billion, below consensus of $2.90 billion.
Sea Latent ( SE ) closed down more than -16% after reporting Q4 net income of $410.9 million, weaker than consensus of $442 million.
Credo Technologies Group Holdings Ltd. ( CRDO ) closed down more than -14% after Q4 revenue forecast from $425 million to $435 million, the midpoint below consensus of $430.5 million.
Surgery Partners (SGRY) closed down more than -12% after forecasting full-year revenue of $3.35 billion to $3.45 billion, well below the $3.56 billion consensus.
ON Holding AG ( ONON ) closed down more than -6% in constant currency after full-year net sales forecast +23% up, below consensus of +25.8%.
Pinterest ( PINS ) closed up more than +9% after approving a new $3.5 billion share repurchase program and announcing a $1 billion strategic investment from Elliott Investment Management.
Best Buy ( BBY ) closed up more than +7% after reporting Q4 adjusted EPS of $2.61, stronger than the $2.46 consensus.
Target ( TGT ) closed up more than +6% after forecasting full-year adjusted EPS of $7.50 to $8.50, the midpoint above consensus of $7.61.
Akami Technologies ( AKAM ) closed up more than +4% after Streaming Media Blog reported that the company notified customers of upcoming temporary surcharges and price adjustments for contract renewals.
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
