Stock Market Update

Equity futures point to a higher opening this morning after the major averages finished higher yesterday, though well off their best levels. 

A modest dip in oil prices is supporting equity futures this morning, with crude oil currently down $0.81 (-0.8%) to $95.40 per barrel. Bloomberg reports that Iran has continued to attack Israel and Arab states in the Persian Gulf, though President Trump reiterated his stance that the conflict could end in the near future. 

The market is eager to see the effect that the recent surge in oil prices will have on the Fed's expected policy outlook at today's FOMC meeting. The Fed is widely expected to keep the fed funds target rate unchanged (though The Wall Street Journal reports up to three officials could dissent), but the summary of economic projections and Fed Chair Powell's subsequent press conference could add color to the expected policy path. 

Expectations for multiple rate cuts in 2026 were touted as a tailwind to start the year, though the recent surge in oil prices has left the market unsure if it will receive a single cut.

On the data front, the market will receive the February PPI (Briefing.com consensus 0.3%) and Core PPI (Briefing.com consensus 0.4%) readings, though they will not yet show the increase in oil prices. 

The MBA Mortgage Applications Index for the week ending March 14 decreased 10.9%, from a prior increase of 3.2%. 

In corporate news:

• General Mills (GIS 38.46, -0.28, -0.7%) missed EPS expectations by $0.09, reported revenues in-line, and reaffirmed its FY26 outlook. 
• lululemon athletica (LULU 158.00, -1.27, -0.8%) beat EPS expectations by $0.23 and reported revenues in-line. The company saw comparable sales growth of 3%, guided Q1 EPS and revenues below consensus, and guided FY27 EPS and revenues below consensus. 
• Microsoft (MSFT 400.08, +0.67, +0.2%) is considering legal action against Amazon (AMZN 215.20, +0.0, +0.0%) and OpenAI over a $50 billion cloud deal, according to Financial Times.
• NVIDIA (NVDA 183.45, +1.52, +0.8%) will soon get Chinese approval for H200 chip sales, according to Reuters. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region caught a wave of buying interest on Wednesday, bolstered by a series of positive developments. Japan's Nikkei: +2.9%, Hong Kong's Hang Seng: +0.6%, China's Shanghai Composite: +0.3%, India's Sensex: +0.8%, South Korea's Kospi: +5.0%, Australia's All Ordinaries: +0.3%.

In news:

• Japan saw stronger-than-expected export activity in February, oil prices retreated, multiple Chinese companies have reportedly been approved to buy NVIDIA's H200 chips, and South Korea said it will be implementing capital market reforms to strengthen market fundamentals.
• Samsung's affirmation of strong AI chip demand further supplemented the Kospi's impressive 5.0% gain that was registered alongside the Nikkei's robust 2.9% gain.
• Japan's Prime Minister Takaichi will meet with President Trump tomorrow in Washington, DC, on the heels of the BOJ policy decision.

In economic data:

• Japan's February exports 4.2% yr/yr (expected 1.6%; prior 16.8%) and imports 10.2% yr/yr (expected 11.5%; prior -2.6%); March Reuters Tankan Index 18 (prior 13)
• South Korea's February unemployment rate 2.9% (prior 3.0%)
• Hong Kong's February unemployment rate 3.8% (prior 3.9%

Major European indices have followed suit with global markets, advancing in Wednesday's trade as oil prices ease and tech stocks continue to provide leadership. STOXX Europe 600: +0.5%, Germany's DAX: +0.7%, U.K.'s FTSE 100: +0.3%, France's CAC 40: +1.0%, Italy's FTSE MIB: +0.9%, Spain's IBEX 35: +1.2%.

In news:

• Falling bond yields, helped by some better-than-feared February CPI data for the eurozone, have added to the constructive tone in front of the FOMC decision later today and policy announcements from the Bank of England, ECB, and Swiss National Bank on Thursday.

In economic data:

• Eurozone February CPI 0.6% m/m (expected 0.7%; prior -0.6%) and 1.9% yr/yr (expected 1.9%; prior 1.7%); core CPI 0.8% m/m (expected 0.8%; prior -1.1%) and 2.4% yr/yr (expected 2.4%; prior 2.2%)