The S&P 500 Index ($SPX) (SPY) today is up +0.03%, the Dow Jones Industrial Average ($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 up +0.07%, and March E-mini Nasdaq futures (NQH26) are up +0.53%.
Stock indexes are moving higher today after a report that Iran made indirect contact with the US to negotiate an end to the war, boosting hopes that the conflict could end sooner than expected. The NY Times reported that operatives from Iran’s Ministry of Intelligence used backchannels to contact the CIA a day after US-Israeli attacks began. Stocks added to their gains on signs of a resilient US labor market after the Feb ADP employment report showed employers added more jobs than expected.
Stock gains are limited amid heightened global trade tensions after Treasury Secretary Scott Bessent said proposed 15% tariffs on goods imported into the US may take effect this week.
Crude oil prices fell from sharp overnight gains and are down more than -1% on the NY Times report that said Iranian operatives made an offer to the US to discuss terms for ending the conflict. Crude oil prices were also undercut by carryover from Tuesday, when President Trump said the US will ensure the free flow of energy through the Strait of Hormuz with insurance guarantees and even naval escorts.
However, the Strait of Hormuz remains closed after Iran’s Islamic Revolutionary Guard Corps said that “we will set fire to any ship attempting to pass through” the strait, which runs along Iran's coast and handles a fifth of the world's oil. The closure of the Strait of Hormuz has forced Iraq, OPEC's second-largest producer, to shut down oil production at its largest oil fields in Rumalia as storage tanks fill up. Also, Kayrros reported today that four of six tanks at Saudi Arabia’s Ras Tanura refinery were full, and the Ju’aymah terminal on the country’s east coast is quickly running out of spare capacity. Goldman Sachs estimates the real-time risk premium for crude oil at $18/bbl, corresponding to its estimate of the impact of a six-week full halt to tanker traffic in the Strait of Hormuz.
In addition, falling debris from an intercepted Iranian drone caused a major fire at the United Arab Emirates' major oil-trading hub, Fujairah, one of the largest oil storage centers in the Middle East. European natural gas prices surged to a 3-year high on Tuesday after Qatar shut its Ras Laffan plant, the world's largest natural gas export facility, after it was targeted by an Iranian drone attack. The Ras Laffan plant accounts for about 20% of the global liquefied natural gas supply.
US MBA mortgage applications rose by +11% in the week ended February 27, with the purchase mortgage sub-index up +6.1% and the refinance mortgage sub-index up +14.3%. The average 30-year fixed rate mortgage was unchanged from the prior week at 6.09%.
US Feb ADP employment increased by +63,000, stronger than expectations of +50,000.
Comments today from Cleveland Fed President Beth Hammack were hawkish, with Hammack saying it's important to drive inflation back to target and that "Fed policy could be on hold for quite some time."
This week's market focus will be on US-Iran war news, corporate earnings, and economic news. Later today, the Feb ISM services index is expected to slip by -0.3 to 53.5. Also, the Fed releases its Beige Book. On Thursday, weekly initial unemployment claims are expected to increase by +3,000 to 215,000. Also, Q4 nonfarm productivity is expected to be up +1.8%, and Q4 unit labor costs are expected to be up +2.0%. On Friday, Feb nonfarm payrolls are expected to increase by +60,000, and the Feb unemployment rate is expected to remain unchanged at 4.3%. Also, Feb average hourly earnings are expected to increase by +0.3% m/m and +3.7% y/y. In addition, Feb retail sales are expected to fall -0.3% m/m and Feb retail sales ex-autos are expected to remain unchanged m/m.
Q4 earnings season is nearing its end, with more than 90% of the S&P 500 companies having reported earnings results. Earnings have been a positive factor for stocks, with 73% of the 481 S&P 500 companies that have reported beating expectations. According to Bloomberg Intelligence, S&P earnings growth is expected to climb by +8.4% in Q4, marking the tenth consecutive quarter of year-over-year growth. Excluding the Magnificent Seven megacap technology stocks, Q4 earnings are expected to increase by +4.6%.
The markets are discounting a 2% chance for a -25 bp rate cut at the next policy meeting on March 17-18.
Overseas stock markets are mixed today. The Euro Stoxx 50 is up +1.67%. China’s Shanghai Composite fell to a 3.5-week low and closed down -0.98%. Japan’s Nikkei Stock 225 dropped to a 3.5-week low and closed down -3.61%.
Interest Rates
June 10-year T-notes (ZNM6) today are down by -4 ticks. The 10-year T-note yield is up +0.8 bp to 4.067%. Today’s recovery in stocks has reduced safe-haven demand for government debt and is weighing on T-notes. Also, today’s stronger-than-expected Feb ADP employment report was bearish for T-notes. In addition, hawkish comments today from Cleveland Fed President Beth Hammack are undercutting T-notes when she said, "Fed policy could be on hold for quite some time." Losses in T-notes are limited after crude oil prices gave up an overnight advance and turned lower, dampening inflation expectations.
European government bond yields are moving lower today. The 10-year German bund yield is down -0.3 bp to 2.749%. The 10-year UK gilt yield is down -4.0 bp to 4.431%.
Eurozone Jan 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 Jan unemployment rate fell -0.2 to a record low of 6.1%, showing a stronger labor market than expectations of 6.2%.
Swaps are discounting 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 are moving higher today, supporting gains in the broader market. Seagate Technology Holdings Plc (STX) is up more than +3%, and Micron Technology (MU), Western Digital (WDC), ARM Holdings Plc (ARM), and Lam Research (LRCX) are up more than +2%. Also, Applied Materials (AMAT), KLA Corp (KLAC), Marvell Technology (MRVL), and Analog Devices (ADI) are up more than +1%.
Cryptocurrency-exposed stocks are rallying today with Bitcoin (^BTCUSD) up more than +5% at a 3-week high. Coinbase Global (COIN) is up more than +9% to lead gainers in the SP 500, and Galaxy Digital Holdings (GLXY) is up more than +8%. Also, Strategy (MSTR) is up more than +7% to lead gainers in the Nasdaq 100, and MARA Holdings (MARA) is up more than +4%. In addition, Riot Platforms (RIOT) is up more than +3%.
Energy producers and energy service providers are under pressure today, with WTI crude oil down by more than 1%. APA Corp (APA) is down more than -3% to lead 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 Q4 sales of $6.64 billion, better than the consensus of $6.40 billion.
nLight Inc. (LASR) is up more than +7% after Baird initiated coverage on the stock with a recommendation of outperform and a price target of $95.
Moderna (MRNA) is up more than +6% after it agreed to pay Genevant $950 million to settle litigation related to the delivery technology behind its Covid shot, a deal some analysts said was better than feared.
Brown-Forman (BF.B) is up more than +4% after reporting Q3 net sales of $1.06 billion, stronger than the consensus of $1.00 billion.
Target (TGT) is up more than +3% after Telsey Advisory Group upgraded the stock to outperform from market perform with a price target of $145.
Alcoa (AA) is up more than +3% after S&P Global Ratings upgraded the company’s long-term credit rating to BB+ from BB with a stable outlook.
Dow Inc. (DOW) is up more than +1% after KeyBanc Capital Markets upgraded the stock to overweight from sector weight with a price target of $38.
Gitlab (GTLB) is down more than -7% after forecasting 2027 revenue of $1.10 billion to $1.12 billion, the midpoint below the consensus of $1.12 billion.
Webtoon Entertainment (WBTN) is down more than -5% after reporting Q4 EPS loss of -$2.36, a much wider loss than the consensus of -12 cents.
Abercrombie & Fitch (ANF) is down more than -5% after forecasting Q1 net sales to grow +1% to +3%, below the consensus of +4.5%.
Frontline Plc (FRO) is down more than -3% after Arctic Securities ASA downgraded the stock to hold from buy.
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).
