The S&P 500 Index ($SPX) ( SPY ) is up +0.87% today, the Dow Jones Industrial Average ($DOWI) ( DIA ) is up +0.66%, and the Nasdaq 100 Index ($IUXX) ( QQQ ) is up +1.52%. March E-mini S&P futures (ESH26) are up +0.81%, and March E-mini Nasdaq futures (NQH26) are up +1.49%.
Stock indexes are rising today as US economic strength outweighs Iran war concerns. Signs of economic recovery and cooling inflationary pressures are lifting stocks today. The U.S. labor market continues to grow after the February ADP hiring report showed employers added more jobs than expected. Also, the U.S. services economy grew at its fastest pace in 3.5 years last month, while service price pressures fell to an 11-month low.
Stocks also supported reports that Iran has made indirect contact with the United States to negotiate an end to the war, 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. However, Iran’s semi-official Tasnim news agency called this report “pure lies and psychological warfare.”
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 fell from sharp overnight gains and were little changed after a New York Times report said Iranian activists had offered the United States to discuss terms to end the conflict. Crude oil prices remained low even after Iran denied the report. 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.
The February US ISM services index unexpectedly rose +2.3 to 56.1, better than expectations for a decline to 53.5 and the strongest pace of expansion in 3.5 years. February’s ISM services prices index unexpectedly fell -3.6 to an 11-month low of 63.0, weaker than expectations for a rise to 68.3.
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 Fed released 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 +1.87%. 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 -7 points today. The 10-year T-note yield is up +1.9 bp to 4.079%. Today’s recovery in stocks dampened safe-haven demand for government debt and weighed on T-notes. Also, stronger-than-expected February ADP employment and February ISM services were bad 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 mixed today. The 10-year German bund yield rose +1.1 bp to 2.763%. The 10-year UK gilt yield – fell 2.0 bp to 4.451%.
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 +8%, and Western Digital ( WDC ) is up more than +7%. Also, Micron Technology ( MU ) is up more than +6%, and Advanced Micro Devices ( AMD ) and Intel ( INTC ) are up more than +3%. In addition, Lam Research ( LRCX ), Applied Materials ( AMAT ), ASML Holding Plc ( ASML ), Broadcom ( AVGO ), ARM Holdings Plc ( ARM ), KLA Corp ( KLAC ), and Marvell Technologies ( MRVL ) are up more than +2%.
Cryptocurrency exposed stocks are up more than +7% in 3.5 weeks today with Bitcoin (^BTCUSD). Coinbase Global ( COIN ) is up more than +14% for the leading gainer in the S&P 500, and Strategy ( MSTR ) is up more than +11% for the leading gainer in the Nasdaq 100. Also, Galaxy Digital Holdings (GLXY) is up more than +12%, and Riot Platforms (RIOT) is up more than +1%. Additionally, Mara Holdings (MARA) is up more than +9%.
Energy producers and energy service providers are under pressure today. APA Corporation ( APA ) is down more than -3%, and ConocoPhillips ( COP ) is down more than -2%. Also, Halliburton ( HAL ), Devon Energy ( DVN ), Exxon Mobil ( XOM ), Diamondback Energy ( FANG ), Chevron ( CVX ), Baker Hughes ( BKR ), 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 10% after agreeing to pay Geniont $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.
Dow Inc. ( DOW ) is up more than +3% after KeyBanc Capital Markets upgraded the stock to sector overweight with a $38 price target.
Target ( TGT ) is up more than +1% after Telsey Advisory Group raised the stock to outperform with a $145 price target.
Gitlab ( GTLB ) is down more than -8% after forecasting 2027 revenue of $1.10 billion to $1.12 billion, the midpoint below consensus of $1.12 billion.
Brown-Forman ( BF.B ) is down more than 7% to lead the losers on the S&P 500 despite reporting better-than-expected Q3 net sales after saying in the earnings call that it sees a “two-year slowdown” in costs and gross margins.
Webtoon Entertainment ( WBTN ) is down more than -7% after reporting a Q4 EPS loss of -$2.36, a much wider loss than the consensus estimate of -12 cents.
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 -1% 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
