The S&P 500 futures currently trade 42 points below fair value. 

Equity indices in the Asia-Pacific region ended Thursday on a lower note with rising oil prices and reports of attacks on oil tankers in the Middle East weighing on sentiment again. U.S. Trade Representative Greer said that a section 301 investigation into 16 trading partners has started. The investigation is expected to lead to a replacement of IEEPA tariffs. Japan will release 80 million barrels from state and private reserves and Prime Minister Takaichi said that there is no need for an extra budget to offset higher gasoline prices.

• In economic data:
  • Japan's Q1 BSI Large Manufacturing Conditions 3.8 (expected 5.3; last 4.7)
  • Australia's May MI Inflation Expectations 5.2% (last 5.0%)
  • New Zealand's Q4 Manufacturing Sales Volume -0.5% qtr/qtr (last 1.1%)
  • India's February CPI 3.21% yr/yr (expected 3.10%; last 2.75%)

---Equity Markets---

• Japan's Nikkei: -1.0%
• Hong Kong's Hang Seng: -0.7%
• China's Shanghai Composite: -0.1%
• India's Sensex: -1.1%
• South Korea's Kospi: -0.5%
• Australia's ASX All Ordinaries: -1.4%

Major European indices trade on a mostly lower note amid ongoing worries about oil transit through the Strait of Hormuz. British travel booking service On the Beach suspended its guidance due to a significant slowdown in travel demand across the Eastern Mediterranean. Military contractor Leonardo reported strong results for Q4 and raised its guidance. BMW reported a drop in operating profit for 2025 and issued cautious guidance for 2026.

• In economic data:
  • Italy's Q4 Unemployment Rate 5.6% (expected 6.1%; last 6.1%)

---Equity Markets---

• STOXX Europe 600: -0.4%
• Germany's DAX: UNCH
• U.K.'s FTSE 100: -0.4%
• France's CAC 40: -0.4%
• Italy's FTSE MIB: -0.8%
• Spain's IBEX 35: -1.2%

The S&P 500 futures currently trade 47 points below fair value. 

Just released, total housing starts increased 7.2% month-over-month in January to a seasonally adjusted annual rate of 1.487 million units (Briefing.com consensus: 1340K), from a downwardly revised prior level of 1.387 million (from 1.404 million). 

Building permits decreased 5.4% to a seasonally adjusted annual rate of 1.376 million (Briefing.com consensus: 1392K) from an upwardly revised prior level of 1.455 million (from 1.448 million). 

The trade deficit narrowed to $54.5 billion in January (Briefing.com consensus: -$67.9 billion) from a downwardly revised $72.9 billion deficit (from -$70.3 billion) in December.

Initial jobless claims decreased by 1,000 to 213,000 (Briefing.com consensus: 215,000) for the week ending March 7.

Continuing jobless claims decreased 21,000 to 1.850 million for the week ending February 28.

Equity futures point to a lower opening this morning as increased hostilities in the Strait of Hormuz have sent oil prices surging higher again. Stocks are coming off of a mostly lower finish yesterday that was also attributed to a rebound in oil prices. 

The Wall Street Journal reported that Iran is stepping up its efforts to halt traffic through the Strait of Hormuz after three more commercial ships were struck in the Persian Gulf. In particular, two oil tankers were attacked in Iraqi waters, according to Bloomberg. 

The fresh strikes largely offset recent measures aimed at mitigating the surge in oil prices and have prompted the market to reassess expectations for the duration of the conflict. Higher energy prices are also continuing to push back the market's expectations for the next rate cut, with the next meeting showing at least a 50% probability of a 25 basis point cut now being the September FOMC meeting, according to the CME FedWatch tool.

Oil is extending yesterday's rebound, currently up $5.23 (+6.0%) to $92.48 per barrel.

Energy developments continue to dominate headlines, though there is also a modest slate of earnings reports for investors to assess this morning. 

The market also has plenty of economic data to look forward to this morning, including January Housing Starts (Briefing.com consensus 1340K) and Building Permits (Briefing.com consensus 1392K) along with the January Trade Balance (Briefing.com consensus -$67.9 billion) and weekly initial jobless claims (Briefing.com consensus 215K). 

In corporate news:

• The Iran War could shift stock market leadership, according to Barrons. 
• Dollar General (DG 138.00, -6.84, -4.7%) beat EPS expectations by $0.27, reported revenues in-line, and guided FY EPS and revenues in-line.
• Morgan Stanley (MS 157.86, -3.03, -1.9%) and Cliffwater are capping withdrawals from private credit funds, according to Bloomberg. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a lower note with rising oil prices and reports of attacks on oil tankers in the Middle East weighing on sentiment again. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: -0.7%, China's Shanghai Composite: -0.1%, India's Sensex: -1.1%, South Korea's Kospi: -0.5%, Australia's ASX All Ordinaries: -1.4%.

In news:

• U.S. Trade Representative Greer said that a section 301 investigation into 16 trading partners has started. The investigation is expected to lead to a replacement of IEEPA tariffs.
• Japan will release 80 million barrels from state and private reserves and Prime Minister Takaichi said that there is no need for an extra budget to offset higher gasoline prices.

In economic data:

• Japan's Q1 BSI Large Manufacturing Conditions 3.8 (expected 5.3; last 4.7)
• Australia's May MI Inflation Expectations 5.2% (last 5.0%)
• New Zealand's Q4 Manufacturing Sales Volume -0.5% qtr/qtr (last 1.1%)
• India's February CPI 3.21% yr/yr (expected 3.10%; last 2.75%)

Major European indices trade on a mostly lower note amid ongoing worries about oil transit through the Strait of Hormuz. STOXX Europe 600: -0.2%, Germany's DAX: +0.2%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.3%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: -0.8%.

In news:

• British travel booking service On the Beach suspended its guidance due to a significant slowdown in travel demand across the Eastern Mediterranean.
• Military contractor Leonardo reported strong results for Q4 and raised its guidance.
• BMW reported a drop in operating profit for 2025 and issued cautious guidance for 2026.

In economic data:

• Italy's Q4 Unemployment Rate 5.6% (expected 6.1%; last 6.1%)

[BRIEFING.COM] The stock market had a choppy midweek session amid a rebound in oil prices, with the S&P 500 (-0.1%), Nasdaq Composite (+0.1%), and DJIA (-0.6%) finishing mostly lower. 

Crude oil futures settled today's session $3.03 higher (+3.6%) at $86.88 per barrel amid reports of difficulties in the Strait of Hormuz, with CNBC reporting that three cargo ships had been hit by projectiles and the U.S. has sunk several Iranian vessels. 

The IEA confirmed that member countries will release 400 million barrels of oil from their reserves, but the news was largely priced in since the recommendation was made known yesterday. 

In related news, the broader market dipped this afternoon following an ABC News report that the FBI warned California law enforcement that Iran had allegedly aspired to launch a surprise drone attack from a vessel off the U.S. West Coast targeting unspecified locations in the state if the U.S. conducted strikes against the country.

The recent volatility in the energy market was not reflected in the February CPI (0.3%; Briefing.com consensus: 0.3%) and Core CPI (0.2%; Briefing.com consensus: 0.2%) readings, which came in line with expectations, a modestly positive development given next month's reading likely will reflect the increase across fuel prices. 

Still, the broader market trended lower today, with just three S&P 500 sectors capturing a gain. 

The energy sector (+2.4%) unsurprisingly notched the widest gain amid the rebound in oil prices, moving into positive week-to-date territory. 

This week's top performer, the information technology sector (+0.3%), also finished modestly higher. Oracle (ORCL 163.09, +13.69, +9.16%) was among the best-performing S&P 500 stocks today after an impressive beat-and-raise earnings report. However, software names dotted the bottom of the sector's standings, with the iShares GS Software ETF (+0.1%) finishing flattish. 

The recent software weakness has also resulted in renewed pressure across asset managers amid persistent concerns about private credit quality after Financial Times reported that JPMorgan has begun marking down some private credit portfolios linked to software debt, which could reduce the borrowing capacity of affected companies.

Separately, Bloomberg reported that Cliffwater's flagship private credit fund received redemption requests exceeding 7%, serving as another piece of evidence that the group is under pressure.

The financials sector (-0.8%) was a laggard today as a result. 

Other underperformers included the consumer staples sector (-1.3%), which faced particular weakness across its food names after Campbell Soup (CPB 22.94, -1.74, -7.05%) missed earnings estimates, while the real estate (-1.1%) and utilities (-0.8%) sectors logged similar losses. 

Losses were modest elsewhere, which helped the major averages log a mixed finish despite relatively broad weakness. 

Outside of the S&P 500, the Russell 2000 (-0.2%) and S&P Mid Cap 400 (-0.3%) logged similar losses.

Overall, the session reflected a cautious tone as investors monitored developments in the Strait of Hormuz and the potential for further disruptions to energy markets. With oil volatility rising again, geopolitical headlines will likely continue to influence market direction in the near term.

U.S. Treasuries faced renewed pressure on Wednesday, which sent yields on 10s and 30s to their highest levels since early February while the 2-year yield settled at its highest level since late September. The 2-year note yield settled up six basis points to 3.63%, and the 10-year note yield settled up seven basis points to 4.21%. 

• S&P Mid Cap 400: +3.4% YTD
• Russell 2000: +2.5% YTD
• S&P 500: -1.0% YTD
• DJIA: -1.3% YTD
• Nasdaq Composite: -2.3% YTD

Reviewing today's data:

• Total CPI increased 0.3% month-over-month in February (Briefing.com consensus 0.3%) and was up 2.4% year-over-year, versus 2.4% for the 12 months ending in January. Core CPI, which excludes food and energy, increased 0.2% month-over-month (Briefing.com consensus 0.2%) and was up 2.5% year-over-year, versus 2.5% for the 12 months ending in January.
  
  • The key takeaway from the report is that it matched expectations at the headline and core levels, which is mildly positive, given the recent surge in energy prices that will increase the market's expectations for a hotter reading in March.
• The weekly MBA Mortgage Index was up 3.2% after increasing 11.0% a week ago. The Purchase Index was up 7.8% while the Refinance Index increased 0.5%.
• The Treasury reported a $307.5 billion deficit for February (Briefing.com consensus -$170.0 bln), which was much wider than expected and it was a bit wider than the $307.0 billion deficit reported for February 2025. Receipts totaled $313.1 billion, while outlays reached $620.6 billion.
  
  • The key takeaway from the report is that while the February deficit was much larger than expected, the year-to-date deficit is nearly $150 billion smaller than it was at this time last year, reflecting some fiscal improvement.