March S&P 500 E-Mini futures (ESH26) are up +0.59%, and March Nasdaq 100 E-Mini futures (NQH26) are up +0.66% this morning, pointing to a higher open on Wall Street as Treasury yields retreated, while investors continued to monitor developments in the Middle East and awaited the Federal Reserve’s meeting.

The Middle East conflict has moved into its third week. U.S. forces in recent days targeted military sites on Kharg Island, home to Iran’s main oil-export terminal, though they did not damage the island’s energy infrastructure. The Central Command said U.S. forces struck 90 military targets on the island “while preserving the oil infrastructure.” At the same time, Iran launched an attack on the oil port in Fujairah in the United Arab Emirates. 

Sentiment improved slightly after several tankers navigated the Strait of Hormuz over the weekend, fueling hopes that the key oil transit route could reopen. The price of WTI crude fell more than -1% on Monday. President Trump increased pressure on nations to help reopen the key oil route and said the U.S. was talking to Iran. However, Iran said it had not sought negotiations or a ceasefire, while Iranian Foreign Minister Abbas Araghchi stated that the Strait of Hormuz was closed only to ships from “enemies.”

U.S. equity futures also drew support from falling Treasury yields. The 10-year T-note yield fell two basis points to 4.26%, after climbing for five consecutive sessions.

In Friday’s trading session, Wall Street’s major equity averages gave up early gains and ended in the red. Meta Platforms (META) slid over -3% to lead the Magnificent Seven stocks lower after the New York Times reported that the company was postponing the release of its next AI model because it underperformed relative to rivals. Also, Ulta Beauty (ULTA) tumbled more than -14% and was the top percentage loser on the S&P 500 after the cosmetics and fragrances retailer issued below-consensus FY26 guidance for comparable sales growth and EPS. In addition, Adobe (ADBE) sank over -7% and was the top percentage loser on the Nasdaq 100 as news of the resignation of long-time CEO Shantanu Narayen overshadowed better-than-expected FQ1 results and FQ2 guidance. On the bullish side, shares of chip and AI-infrastructure companies advanced, with Sandisk (SNDK) climbing more than +6% to lead gainers in the S&P 500 and Micron Technology (MU) rising over +5% to lead gainers in the Nasdaq 100.

“It will likely continue to be a ‘headlines-driven’ market,” said Matt Maley at Miller Tabak. “Investors are starting to worry that the situation in the Middle East could drag on for a long enough period of time for it to have an impact on the economy.”

Data from the U.S. Department of Commerce released on Friday showed that the core PCE price index, a key inflation gauge monitored by the Fed, rose +0.4% m/m and +3.1% y/y in January, in line with expectations. Also, U.S. JOLTs job openings rose to 6.946 million in January, stronger than expectations of 6.760 million. In addition, U.S. January personal spending rose +0.4% m/m, stronger than expectations of +0.3% m/m. At the same time, U.S. Q4 GDP growth was revised downward to +0.7% (q/q annualized) from the initial estimate of +1.4%.

Meanwhile, a federal judge, in a 27-page opinion dated March 11th and unsealed Friday, threw out grand jury subpoenas aimed at Fed Chair Jerome Powell. “The Government has offered no evidence whatsoever that Powell committed any crime other than displeasing the president,” Chief Judge James Boasberg of the U.S. District Court for the District of Columbia wrote. The Trump administration said it plans to appeal the decision.

The Fed’s interest rate decision and Chair Jerome Powell’s post-policy meeting press conference will take center stage this week. The central bank is widely expected to leave the Fed funds rate unchanged in a range of 3.50% to 3.75% for a second straight meeting. The key question for market watchers will be what signals the Fed delivers on the outlook for rate cuts in the months ahead amid renewed tremors in the labor market and the Middle East conflict that has driven oil prices sharply higher. Investors will closely monitor Mr. Powell’s remarks, which may offer insight into how policymakers see the Middle East conflict affecting the U.S. economy. HSBC economists expect Powell to deliver a “nuanced assessment,” emphasizing the two-sided risks the conflict poses to inflation and the economy. The Fed will also release updated projections for the economy along with its “dot plot” interest-rate forecasts.

“We expect the Fed to highlight the uncertainty on both sides of the mandate,” said Jeffrey Roach at LPL Financial. “Inflation will be impacted by the [Middle East conflict], and unemployment will be impacted by the disruptions in the labor market. Expect to see some important revisions in the upcoming Summary of Economic Projections.”

Investors will also keep an eye on U.S. economic data this week. The U.S. Producer Price Index will be the main highlight, offering a snapshot of wholesale inflation in February. Other noteworthy data releases include Pending Home Sales, Factory Orders, the Philly Fed Manufacturing Index, Initial Jobless Claims, and New Home Sales.

In addition, several prominent companies, including Micron Technology (MU), FedEx (FDX), Accenture (ACN), Dollar Tree (DLTR), and General Mills (GIS), are slated to release their quarterly results this week.

Today, investors will focus on U.S. Industrial Production and Manufacturing Production data, set to be released in a couple of hours. Economists project Industrial Production to rise +0.1% m/m and Manufacturing Production to rise +0.1% m/m in February, compared to the January figures of +0.7% m/m and +0.6% m/m, respectively.

The New York Fed-compiled Empire State Manufacturing Index will also be released today. Economists expect the March figure to come in at 4.0, compared to 7.1 in February.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.26%, down -0.49%.

The Euro Stoxx 50 Index is down -0.25% this morning as investors assess conflicting headlines on the Middle East conflict, now in its third week. Automobile and bank stocks underperformed on Monday. Limiting losses, energy stocks advanced. Meanwhile, market participants are bracing for a series of monetary policy decisions from central banks across the region this week, including those from the European Central Bank and the Bank of England. The ECB is widely expected to keep the deposit rate unchanged at 2.00%. The surge in energy prices, which has fueled expectations of rate hikes, places the burden on ECB officials to clarify how inflation risks have evolved and to signal how close they are to aligning with those market expectations. The BoE is widely expected to leave rates unchanged at 3.75% amid the spike in energy prices stemming from the Middle East conflict, which economists warn could push inflation to more than twice the central bank’s 2% target. Beyond monetary policy and the Middle East conflict, investor attention this week will center on Germany’s ZEW economic sentiment index for March as well as the Eurozone’s final February inflation figures. In corporate news, Commerzbank AG (CBK.D.DX) rose over +3% after UniCredit launched a bid to increase its stake in the German lender to more than 30%.

The European economic data slate is empty on Monday.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.26%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.13%.

China’s Shanghai Composite Index closed lower today as the deepening Middle East conflict continued to dampen risk appetite. On Sunday, U.S. officials said the U.S.-Israeli war on Iran could end within weeks, but Iran maintained it was “stable and strong” and ready to defend itself. Gold-related stocks slumped on Monday as reduced expectations for U.S. rate cuts diminished the yellow metal’s appeal. Limiting losses, chip stocks rallied after Reuters reported that Hua Hong Group had developed advanced chipmaking technology that can be used to produce AI chips. Positive economic data from the country also helped limit losses in the benchmark index. Readings on retail sales, fixed-asset investment, and industrial output were all better than expected in the January-February period, indicating the Chinese economy began the year on a stable footing. However, data on the property sector continued to point to weakness, and the unemployment rate unexpectedly rose last month. Investor attention now turns to the People’s Bank of China, which is set to announce the country’s benchmark lending rate later this week. DBS economists expect key lending rates to remain unchanged as policymakers gauge the January-February data to evaluate the impact of earlier easing measures. Investors are also looking ahead to the upcoming summit in Beijing between U.S. President Donald Trump and Chinese President Xi Jinping later this month. Reuters reported that senior U.S. and Chinese economic officials were set to wrap up talks in Paris on Monday, with possible areas of agreement in agriculture, critical minerals, and managed trade that could be elevated to the U.S. and Chinese presidents.

The Chinese Industrial Production rose +6.3% y/y in the January-February period, stronger than expectations of +5.3% y/y.

The Chinese Retail Sales rose +2.8% y/y in the January-February period, stronger than expectations of +2.6% y/y.

The Chinese Fixed Asset Investment rose +1.8% y/y in the January-February period, stronger than expectations of -5.0% y/y.

The Chinese February Unemployment Rate was 5.3%, weaker than expectations of 5.1%.

Japan’s Nikkei 225 Stock Index closed lower today, falling for a third consecutive session as investors continued to assess the impact of the Middle East conflict. Losses in automobile and electronics stocks led the overall market lower on Monday. Japan imports around 90% of its oil from the Middle East, leaving its economy especially vulnerable to price surges and supply disruptions. Goldman Sachs on Monday lowered its 2026 forecast for Japan’s real GDP growth to 0.5% from 0.8%, citing heightened near-term geopolitical risks. Kazunori Tatebe, chief strategist at Daiwa Asset Management, said that a 10% rise in Brent crude prices would trim 1% to 2% from Japanese companies’ net income. The benchmark index pared most of its earlier losses as U.S. equity futures climbed after President Trump stepped up pressure on nations to help reopen the Strait of Hormuz and said the U.S. was in talks with Iran. Still, Japan’s Defense Minister Shinjiro Koizumi told parliament on Monday that the country currently has no plans to send warships to the Strait of Hormuz. Meanwhile, the benchmark 10-year Japanese government bond yield climbed to a five-week high on Monday amid mounting inflation concerns stemming from the Middle East conflict, which could spur a faster pace of Bank of Japan rate hikes. Investor focus this week is on the BOJ’s monetary policy decision. The central bank is widely expected to keep its benchmark rate steady at 0.75% as it assesses the Middle East conflict’s impact on energy costs and supply chains. Investors will scrutinize the BOJ’s statement and Governor Kazuo Ueda’s comments for signals on the timing of the next rate hike, with an April move reportedly remaining on the table. Attention will also be on Japan’s trade figures for February. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.21% to 42.50.

Pre-Market U.S. Stock Movers

Meta Platforms (META) rose over +3% in pre-market trading after Reuters reported that the company was planning layoffs that could affect 20% of its 80,000 employees. Other members of the Magnificent Seven stocks also advanced, with Tesla (TSLA) and Nvidia (NVDA) gaining more than +1%.

Micron Technology (MU) gained about +4% in pre-market trading after announcing plans to build a second chip manufacturing facility at its newly acquired Tongluo site in Miaoli County, Taiwan.

Cryptocurrency-exposed stocks are moving higher in pre-market trading, with the price of Bitcoin up more than +1%. Strategy (MSTR) is up more than +3%. Also, MARA Holdings (MARA) is up over +4%, and Coinbase (COIN) is up more than +2%.

Circle Internet Group (CRCL) climbed more than +5% in pre-market trading after Clear Street upgraded the stock to Buy from Hold with a price target of $136.

The Trade Desk (TTD) advanced over +1% in pre-market trading after Arete upgraded the stock to Neutral from Sell.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Monday - March 16th

Dollar Tree (DLTR), Forgent Power Solutions (FPS), Semtech (SMTC), Science Applications International (SAIC), Damora Therapeutics (DMRA), Lithium Americas (LAC), CytomX Therapeutics (CTMX), Microvast Holdings (MVST), Bally’s (BALY), Consolidated Water (CWCO), W&T Offshore (WTI), Natural Gas Services Group (NGS), Armata Pharmaceuticals (ARMP), Perspective Therapeutics (CATX), Summit Midstream (SMC), Value Line (VALU), Telos (TLS), Getty Images Holdings (GETY), TruBridge (TBRG), Bakkt (BKKT), Kaltura (KLTR), FutureFuel (FF), Playboy (PLBY), Ampco-Pittsburgh (AP), Comtech Telecommunications (CMTL), The Arena Group Holdings (AREN), Townsquare Media (TSQ), HF Foods Group (HFFG), RF Industries (RFIL), Agenus (AGEN).

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