Stock Market Update

The S&P 500 futures are up 11 points and are trading 0.2% above fair value, the Nasdaq 100 futures are up two points and are trading fractionally above fair value, and the Dow Jones Industrial Average futures are up 162 points and are trading 0.4% above fair value.

Market participants are testing the buy-the-dip trade this morning following yesterday's sharp declines. Contracts tied to the S&P 500, Nasdaq 100, and Dow industrials to trade higher. The vibe may shift, however, after the release of the Fed's preferred inflation gauge in the form of the core-PCE Price Index at 8:30 ET.

The market hasn't responded much to heightened trade war tensions between the U.S. and China. Concerns were piqued when China said it will "take all necessary countermeasures" to protect its interests in reaction to President Trump's announcement yesterday that an additional 10% tariff for China will go into effect March 4.

The 2-yr yield is three basis points lower at 4.05% and the 10-yr yield is three basis points lower at 4.26%.

In corporate news:

• Dell (DELL 102.00, -5.83, -5.4%): beats by $0.16, misses on revs; guides Q1 EPS below consensus, revs below consensus; guides FY26 EPS above consensus, revs in-line
• MicroStrategy (MSTR 233.10 -6.95, -2.9%): ongoing weakness ahead of the open as cryptocurrency prices continue retreat
• HP Inc. (HPQ 32.20, -0.93, -2.8%): misses by $0.01, reports revs in-line; guides AprQ EPS below consensus; reaffirms FY25 EPS guidance
• Autodesk (ADSK 287.00 +4.85, +1.7%): beats by $0.15, reports revs in-line; guides Q1 EPS above consensus, revs above consensus; guides FY26 EPS above consensus, revs in-line; reducing workforce by 9%
• Monster Beverage (MNST 53.50, +1.50, +3.1%): misses by $0.02, beats on revs
• NetApp (NTAP 100.16, -18.06, -15.3%): reports EPS in-line, misses on revs; guides Q4 EPS below consensus; guides FY26 EPS below consensus

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region fell sharpy Friday following the lead set for them by the U.S. in Thursday's trading. Japan's Nikkei: -2.9% (-4.2% for the week), Hong Kong's Hang Seng: -3.3% (-2.3% for the week), China's Shanghai Composite: -2.0% (-1.7% for the week), India's Sensex: -1.9% (-2.8% for the week), South Korea's Kospi: -3.4% (-4.6% for the week), Australia's ASX All Ordinaries: -1.2% (-2.0% for the week).
  • In economic data:
    • Japan's February Tokyo CPI 2.9% yr/yr (last 3.4%) and Core CPI 2.2% (expected 2.3%; last 2.5%); January Industrial Production -1.1% m/m (expected -1.0%; last -0.2%); January Retail Sales 3.9% yr/yr (expected 3.9%; last 3.5%); January Housing Starts -4.6% yr/yr (expected -2.6%; last -2.5%)
    • Australia's January Housing Credit 0.4% m/m (last 0.5%)
    • India's Q3 GDP Quarterly 6.2% yr/yr (expected 6.3%; last 5.4%) and GDP Annual 6.5% (expected 6.4%; last 8.2%)
  • In news:
    • Heavy selling was precipitated by stepped-up selling pressure in semiconductor stocks following NVIDIA's dismal showing after its earnings report, and stepped-up selling related to tariff angst after President Trump said an additional 10% tariff for China, taking them to 20%, will go into effect March 4.
    • China responded, saying it will "take all necessary countermeasures" to protect its interests, which stoked concerns about a heightened trade war between the U.S. and China.
    • Separately, a Politburo meeting draft document suggested China will reiterate its commitment to introducing proactive macroeconomic policies to stoke demand; meanwhile, BOJ Governor Ueda reiterated that the BOJ would consider increasing purchases of JGBs if long-term yields see an abnormal increase.
• Major European indices are mixed in a hesitant trade as global markets process the specter of increased tariff actions being implemented by the U.S. STOXX Europe 600: -0.2% (+0.4% for the week), Germany's DAX: -0.3% (+0.9% for the week), U.K.'s FTSE 100: +0.3% (+1.4% for the week), France's CAC 40: -0.4% (-1.0% for the week), Italy's FTSE MIB: -0.1% (+0.4% for the week), Spain's IBEX 35: +0.2% (+2.7% for the week).
  • In economic data:
    • UK's February Nationwide HPI 0.4% m/m (expected 0.2%; last 0.1%) and 3.9% yr/yr (expected 3.4%; last 4.1%)
    • Germany's January Retail Sales 0.2% m/m (expected 0.4%; last -0.9%) and 2.9% yr/yr (last 2.0%); January Import Price Index 1.1% m/m (expected 0.7%; last 0.4%) and 3.1% yr/yr (expected 2.7%; last 2.0%); February Unemployment Rate 6.2% (expected 6.2%; last 6.2%); February Unemployment Change 5K (expected 14K; last 11K)
    • France's February CPI 0.2% m/m (expected 0.5%; last 0.2%) and 0.8% yr/yr (expected 1.0%; last 1.7%); January Consumer Spending -0.5% (expected -0.6%; last 0.7%); Q4 GDP -0.1% qtr/qtr (expected -0.1%; last 0.4%) and 0.6% yr/yr (expected 0.7%; last 1.2%); February HICP 0.0% m/m (expected 0.3%; last -0.2%) and 0.9% yr/yr (expected 1.2%; last 1.8%); Q4 nonfarm payrolls -0.3% qtr/qtr (expected -0.2%; last 0.1%)
    • Italy's February CPI 0.2% m/m (expected 0.2%; last 0.6%) and 1.7% yr/yr (expected 1.7%; last 1.5%); February HICP 0.1% m/m (expected 0.1%; last -0.8%) and 1.7% yr/yr (expected 1.8%; last 1.7%)
  • In news:
    • The EU has a possible 25% tariff cloud hanging over it.
    • European markets are also processing a lot of macro data today that featured an unemployment rate for Germany sticking at 6.2% (highest since October 2020) and some softer-than-expected inflation data out of France.
    • UK Prime Minister Starmer met with President Trump, who touted the possibility of striking a trade deal with the UK that will avoid tariffs.