S&P futures are unchanged this morning, but approaching session low, following Trump comments that appeared to be the first signs of an off-ramp which however were followed by renewed fighting in the Middle East. While the risk is of re-escalation, JPMorgan writes that we are"seeing a global unwind of war-related trades as the market awaits additional news from US, Israel, Iran" but with headlines like this it will hardly last*IRAN BEGINS NEW WAVE OF MISSILE STRIKES ON NORTHERN ISRAEL: TV. As of 8:00am,S&P futures are down 0.2%, and Nasdaq futs turn red even as Mag7 and Semis help Tech outperform with AI themes working across regions. TSMC sales worth noting up 30% in the first two months of the year. ORCL post close in focus on the tech/AI front. Global markets snapped higher with the batshit insane KOSPI leading up 535bps one day after being halted limit down (again), Europe rises ~200bps, depending on the market, having yesterday unwound all YTD gains. UK consumer sentiment dropped to a four-month low in March, reversing gains made at the start of the year. WTI is still down -7% but reversing rapidly amid the latest shooting headlines: crude traded in quite a band with WTI touching $120 yesterday as well as $80, setting $89 so far this morning; European gas prices are down 13% to sub $50as well. Copper, gold not really moving. 10-year off yesterday’s lows +3bps to 4.13%, Dollar lower, DXY at $99 and Bitcoin risk on up 250bps to $70.7k. Today’s macro data focus is on NFIB Small Biz Survey, weekly ADP, and existing home sales. NFIB out early here this morning small step back 98.8 vs. 99.6 survey and 99.3 last month – index has been hovering around these levels since mid-2025 post tariff concerns.
In premarket trading, Mag 7 stocks are mostly higher (Tesla +0.8%, Meta Platforms +0.6%, Amazon +0.3%, Alphabet +0.2%, Nvidia +0.1%, Microsoft unchanged, Apple -0.1%)
In other corporate news, Disney is said to be close to naming Thomas Mazloum, current head of Disneyland California, as chairman of the company’s parks division. Apple increased iPhone production in India by about 53% last year and now makes a quarter of its marquee devices there. Lego plans to invest heavily in the US, eyeing further gains in market share. Elsewhere on the data front, China’s trade growth accelerated sharply in Jan-Feb (exports +21.8% y/y, imports +19.8% y/y) and came in well above expectations. Chinese nominal exports to major trading partners rose sequentially in Jan-Feb.
Global markets moved risk on in early trading with oil extending declines after Trump’s comments sparked optimism that the war with Iran will end soon. It’s possible that geopolitical risk has peaked, said JPMorgan’s head of International Market Intelligence, but “the tape still feels pretty tentative.” And indeed, futures have since sunk and oil is rebounding following reports this morning of renewed fighting in the Middle East. Trump said he would waive oil-related sanctions and have the Navy escort tankers through the Strait of Hormuz. He’s also said to be weighing options like the release of emergency stockpiles.
“The war in Iran is not over and can intensify again at any moment,” said Joachim Klement, head of strategy at Panmure Liberum. “Any gains will remain limited until there are clear signs of an end to hostilities in the Gulf and shipping through the Strait of Hormuz improves again.”
According to Goldman trader John Flood, while the market has proven it has the ability to move violently in both directions with dealers short gamma right now, right tail (squeeze) risk at the index level is primed to be the most extreme. HF gross leverage is essentially at an all time high driven by continued shorting (hedging) via macro products. Per GSPB short exposure in US Macro Products (Index + ETF) - as % of total US Gross MV on our Prime book - now stands at the highest level since Sep '22 and ranks in the 93rd percentile vs. the past five years. Yet at the same time, Goldman Sachs cross-asset strategists turn tactically neutral on stocks and overweight on cash for three months, citing mounting risks that the Middle East conflict may spark an energy shock comparable to those of the 1970s.
And while investors often focus on the VIX as the main gauge of market fear, Europe’s underperformance versus the US since the Iran strikes has pushed European volatility higher and widened the V2X/VIX spread.
While AI had taken a backseat in markets amid Iran, but there are a few interesting datapoints to note today. TSMC, the go-to chipmaker for Nvidia, reported a 30% jump in sales in the first two months of the year. HPE gave quarterly revenue guidance that beat estimates, showing the company is benefiting from AI hardware demand. Oracle is reporting after the close, with Tech Watch noting that skittish investors are looking for reasons to sell.
In political news, several Senate Democrats are threatening to force numerous war powers votes and disrupt the chamber unless Republicans agree to hold public hearings on the reasons for the attacks on Iran. A key Republican senator said he’s launched an investigation into the FDA’s recent denials of treatments for rare diseases. And a top Pentagon official sees little chance of resuming negotiations with Anthropic.
BioNTech and NIO are among companies due to report results before the market open. Focus will be on BioNTech’s outlook for 2026, according to BI. Earnings from Oracle and Franco-Nevada follow later in the day. Oracle might be more susceptible to cost pressures versus hyperscalers according to BI, which expects adjusted gross margin to contract roughly 400-500 bps in fiscal 2026.
Source: ZeroHedge News
