Stock Market Update

Equity futures point to a lower opening this morning as geopolitical volatility and climbing oil prices continue to exert broad pressure on the market. The major averages each closed more than 1% lower in yesterday's action as optimism of a near-term negotiation between the U.S. and Iran faded. 

The state of the conflict and its potential resolution remain murky to say the least. President Trump said via Truth Social that the U.S. wil temporarily halt strikes against Iranian energy, showing an eagerness to strike a deal to end the conflict. However, The Wall Street Journal reported that the Pentagon is considering sending 10,000 additional ground troops to the Middle East, escalating concerns of a potential ground conflict. 

Higher oil prices and geopolitical concerns weighed on the market yesterday, with particular weakness across mega-cap and tech stocks. Some of the mega-cap weakness stemmed from separate factors, but the losses culminated in the worst day for the S&P 500 since the conflict with Iran began

Crude oil is currently up $2.29 (+2.4%) to $96.77 per barrel. 

Yesterday's weakness leaves the major averages entering today's session mostly lower for the week, with the major averages nearing correction territory as they slip further below their 200-day moving averages.

In corporate news:

• OpenAI's annualized ad revenue surpasses $100 million, according to The Information. 
• Antrhopic is eying a Q4 IPO, according to The Information. 
• Apple (AAPL 252.55, -0.34, -0.1%) plans to make Siri available to external AI assistants with its iOS 27 update.
• Brown-Forman (BF.B 25.85, +0.11, +0.4%) and Pernod Ricard (RI) confirm merger talks, according to Reuters. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a mostly lower finish to the week with geopolitical worries persisting into the weekend after it was reported that the Pentagon is sending an additional 10,000 troops to the Middle East. Japan's Nikkei: -0.4%, Hong Kong's Hang Seng: +0.4%, China's Shanghai Composite: +0.6%, India's Sensex: -2.3%, South Korea's Kospi: -0.4%, Australia's ASX All Ordinaries: -0.2%.

In news:

• Japan's Finance Minister Katayama warned about a potential intervention in the currency market after the yen approached 160/dollar, its weakest level since mid-2024.
• Separately, the Japanese government confirmed a provisional budget of JPY8.6 trln.
• China has yet to confirm the rescheduled mid-May meeting between Presidents Trump and Xi.
• China imposed a 55% additional tariff on beef imports from Australia.

In economic data:

• China's February Industrial Profit 15.2% YTD (last 0.6%)

Major European indices are on course for a lower finish to the week amid elevated geopolitical uncertainty into the weekend. STOXX Europe 600: -1.4%, Germany's DAX: -1.5%, U.K.'s FTSE 100: -0.7%, France's CAC 40: -1.0%, Italy's FTSE MIB: -1.4%, Spain's IBEX 35: -1.4%.

In news:

• European Central Bank policymaker Patsalides said that there is insufficient information at this time to decide whether an immediate rate hike is needed.
• AstraZeneca reported positive trial results while Novartis announced an acquisition.

In economic data:

• U.K.'s February Retail Sales -0.4% m/m (expected -0.6%; last 2.0%); 2.5% yr/yr (expected 2.1%; last 4.8%). February Core Retail Sales -0.4% m/m (expected -0.8%; last 2.2%); 3.4% yr/yr (expected 2.9%; last 5.9%)
• Italy's February non-EU trade surplus EUR5.53 bln (last surplus of EUR2.23 bln)
• Spain's flash March CPI 1.0% m/m (expected 1.2%; last 0.4%); 3.3% yr/yr (expected 3.6%; last 2.3%). Flash March Core CPI 2.7% yr/yr (last 2.7%)