Stock Market Update

Equity futures point to a sharply higher opening this morning after President Trump announced a potential deescalation in the war in Iran. President Trump said via Truth Social that the U.S. and Iran have engaged in productive conversations around a "complete and total resolution of our hostilities in the Middle East," adding that the talks will continue and he has instructed the Department of War to postpone any strikes on Iranian power plants and energy infrastructure. 

The stock market was on track to extend last week's losses, but the commentary saw equity futures surge higher, putting the major averages in position to challenge their respective 200-day moving averages at the open. Oil made a sharp move lower in response, with crude oil currently down $6.45 (-6.6%) to $91.78 per barrel. 

The major averages each shed roughly 2% in last week's action as higher oil prices and Treasury yields put broad pressure on the stock market.

Developments on the geopolitical and energy fronts will likely be a key driver of action today, as corporate news flow is relatively light, with no earnings reports on the calendar. 

Similarly, today's economic data is limited to the 10:00 a.m. ET release of the January Construction Spending Report (Briefing.com consensus 0.1%). 

In corporate news:

• OpenAI is set to double its workforce, according to Financial Times. 
• Banco Santander SA (SAN 11.04, +0.51, +4.8%) was upgraded to Overweight from Equal Weight at Morgan Stanley. 
• Elliot Investment Management builds a stake in Synopsys (SNPS 432.02, +11.70, +2.3%), according to The Wall Street Journal. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region started the week on a sharply lower note with South Korea's Kospi (-6.5%) at the forefront of the weakness amid ongoing concerns about the trajectory of energy prices. Japan's Nikkei: -3.5%, Hong Kong's Hang Seng: -3.5%, China's Shanghai Composite: -3.6%, India's Sensex: -2.5%, South Korea's Kospi: -6.5%, Australia's ASX All Ordinaries: -0.9%.

In news:

• Taiwan's February exports to the U.S. were up 24% yr/yr while exports to Japan grew 18% yr/yr.
• Japan will spend about JPY800 bln to offset high gasoline prices.
• South Korea's President Lee nominated Shin Hyun-song to be the next governor of the Bank of Korea.

In economic data:

• Singapore's February CPI 0.6% m/m (last -0.5%); 1.2% yr/yr (last 1.4%). February Core CPI 1.4% yr/yr (last 1.0%)

Major European indices trade higher after overcoming their earlier weakness after President Trump acknowledged that talks are being held with Iranian officials to end hostilities. STOXX Europe 600: +0.5%, Germany's DAX: +1.0%, U.K.'s FTSE 100: -0.3%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.6%, Spain's IBEX 35: +0.8%.

In news:

• Municipal elections in France produced some gains for National Rally.
• Germany has maintained its debt issuance plans for Q2.
• European Central Bank policymaker Kazimir said that rates remain in good place while policymaker De Guindos said that the central bank will react if necessary.

In economic data:

• Spain's January trade deficit EUR4.00 bln (last deficit of EUR5.57 bln)