S&P Futures Slip on Middle East Conflict Uncertainty and China Trade Probes

June S&P 500 E-Mini futures (ESM26) are trending down -0.49% this morning as investors digested conflicting news about the Middle East conflict, while China escalated its trade dispute with the U.S.

President Trump said on Thursday that he was extending the pause on strikes against Iranian energy infrastructure for 10 days at Iran’s request. In a Truth Social post, Trump added that “talks are ongoing” with Tehran. However, The Wall Street Journal reported that Iran has not requested the 10-day pause and has yet to provide its final response to the U.S.’s 15-point plan to end the war. The WSJ also reported that the Pentagon is weighing sending up to 10,000 additional ground troops to the Middle East to provide President Trump with more military options. Meanwhile, Iran and Israel traded missile strikes and Tehran targeted multiple Gulf states on Friday. The price of WTI crude climbed over +2% on Friday, while Treasury yields rose across the curve, with the ten-year rate climbing four basis points to 4.47%.

Also weighing on sentiment on Friday was China’s decision to launch two investigations into U.S. trade practices ahead of an anticipated summit between Trump and President Xi Jinping, alleging that U.S. restrictions have disrupted global supply chains and trade in renewable-energy products.

In yesterday’s trading session, Wall Street’s major indices ended in the red. Memory chip stocks extended their declines after Google researchers touted a new compression technique that could lower AI memory needs, with Sandisk (SNDK) plunging over -11% and Micron Technology (MU) slumping about -7%. Also, Meta Platforms (META) tumbled nearly -8% and Alphabet (GOOGL) slid more than -3% as investors saw a long-term overhang tied to verdicts in a social media addiction trial. In addition, MillerKnoll (MLKN) sank over -22% after the office furniture maker posted downbeat FQ3 results and issued weak FQ4 guidance. On the bullish side, Brown-Forman (BF.B) climbed more than +9% and was the top percentage gainer on the S&P 500 after Bloomberg reported that Pernod Ricard was exploring a potential acquisition of the company.

“The war in Iran and the resulting surge in oil prices continue to dampen risk appetite,” said Adam Turnquist at LPL Financial. “Any sustainable market recovery will require meaningful progress toward a peace agreement and a reopening of the Strait of Hormuz.”

The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week rose by +5K to 210K, compared with the 211K expected.

Fed Vice Chair Philip Jefferson said on Thursday that he anticipates the Middle East conflict will lift inflation in the near term and that interest rates are “well-positioned” to respond to a range of economic outcomes. Also, Fed Governor Michael Barr said, “Our current policy stance puts us in a good place to hold steady while we evaluate incoming data.” In addition, Fed Governor Lisa Cook said the Middle East conflict has shifted the balance of risks for now, making inflation a greater concern for policymakers than employment. “With respect to the labor market, I see it as being in balance, but precariously so,” Cook said.

U.S. rate futures have priced in a 93.8% chance of no rate change and a 6.2% chance of a 25 basis point rate hike at the next central bank meeting in April.

Meanwhile, Bloomberg reported on Thursday that Trump administration officials are assessing what a potential surge in oil prices to as much as $200 a barrel would mean for the economy.

Today, investors will focus on the University of Michigan’s U.S. Consumer Sentiment Index, which is set to be released in a couple of hours. Economists anticipate that the final March figure will be revised lower to 53.9 from the preliminary reading of 55.5.

Market participants will also parse comments today from Richmond Fed President Tom Barkin, San Francisco Fed President Mary Daly, and Philadelphia Fed President Anna Paulson.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.47%, up +0.93%.

The Euro Stoxx 50 Index is down -0.96% this morning as initial optimism over President Trump’s extension of the negotiations deadline waned and rising oil prices continued to stoke inflation concerns. Media stocks led the declines on Friday. Still, the benchmark index is on track to eke out a weekly gain. Preliminary data from the statistics agency INE released on Friday showed that Spain’s annual inflation rate jumped in March, highlighting how the energy shock triggered by the Middle East conflict is already starting to filter through to prices across the Eurozone. Separately, data showed that U.K. monthly retail sales fell in February, weighed down by wet weather. In addition, a European Central Bank survey showed that Eurozone consumers were lowering their inflation expectations in the lead-up to the Middle East conflict, before a spike in energy prices fundamentally altered the outlook. Meanwhile, Eurozone government bond yields climbed on Friday amid mounting concerns about energy-driven inflation as the Middle East conflict continues. Those concerns have pushed the odds of an interest rate hike by the European Central Bank in April up to 71%. “If we expect inflation to deviate significantly and persistently from target, the response must be appropriately forceful or persistent,” ECB President Christine Lagarde said earlier this week. In corporate news, Pernod Ricard (RI.FP) rose over +3% after the spirits maker said it is in talks regarding a potential merger with Brown-Forman.

U.K. Retail Sales, U.K. Core Retail Sales, and Spain’s CPI (preliminary) data were released today.

U.K. February Retail Sales fell -0.4% m/m and rose +2.5% y/y, stronger than expectations of -0.6% m/m and +2.1% y/y.

U.K. February Core Retail Sales fell -0.4% m/m and rose +3.4% y/y, stronger than expectations of -0.8% m/m and +2.9% y/y.

The Spanish March CPI rose +1.0% m/m and +3.3% y/y, weaker than expectations of +1.2% m/m and +3.6% y/y.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.63%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.43%.

China’s Shanghai Composite Index closed higher today, outperforming its regional peers as upbeat industrial profit data from the country boosted sentiment. Official data released on Friday showed that China’s industrial profit surged in the first two months of 2026, marking a sharp improvement before the Middle East conflict unsettled the global oil market and drove raw material costs sharply higher. Industrial profits rose 15.2% in January-February from a year earlier, accelerating from a full-year increase of 0.6% in 2025, aided by a low base last year and earlier stimulus measures from Beijing that began to take effect. Still, the benchmark index posted a steep weekly loss, as uncertainty surrounding the Middle East conflict persisted. U.S. President Donald Trump said on Thursday he will extend a pause on attacks against Iran’s energy facilities into April and that talks with Iran were going “very well,” but an Iranian official pushed back, calling the U.S. proposal “one-sided and unfair.” In other news, China’s Commerce Ministry said in a statement that the nation is willing to strengthen economic and trade cooperation with the U.S. In corporate news, Pony AI tumbled about -14% in Hong Kong after the company reported a weaker-than-expected Q4 gross profit margin, and investors fretted over the lack of near-term catalysts. Investor focus now shifts to China’s official PMI data for March, due next week, for further clues on the broader economic impact of the Middle East conflict.

Japan’s Nikkei 225 Stock Index closed lower today as investors assessed developments in the Middle East. Losses in real estate and chip stocks led the overall market lower on Friday. The Nikkei initially dropped as much as -2%, tracking overnight losses on Wall Street, but later trimmed most of those declines as oil prices dipped during Asian trading hours after President Trump extended a pause on U.S. military strikes on Iran’s energy infrastructure for another 10 days. The Nikkei was also supported by dividend buying. Tomoichiro Kubota, senior market analyst at Matsui Securities, said, “This is a period when buying tends to come in easily from a supply-demand perspective, as today is the last trading day to capture dividend rights.” The benchmark index notched its first weekly gain in four weeks. Meanwhile, Japanese government bond yields jumped on Friday, with five-year yields reaching a record high, as the Middle East conflict and recent Bank of Japan signals amplified inflation concerns and prompted investors to reprice the trajectory of rate hikes. Elsewhere, Japanese Finance Minister Satsuki Katayama on Friday signaled the possibility of taking “bold actions” to counter currency moves, a nod to potential intervention, as the yen hovered near a level where authorities stepped into the market several times in 2024. In corporate news, Bank of Nagoya jumped over +15%, and Shizuoka Financial Group climbed more than +6% after the regional lenders agreed to consolidate their operations under a holding company. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -25.09% to 33.32.

Pre-Market U.S. Stock Movers

The Magnificent Seven stocks edged lower in pre-market trading, with Alphabet (GOOGL) falling -0.9% and Meta Platforms (META) dropping -0.6%.

Veritone (VERI) slumped more than -8% in pre-market trading after the company posted weaker-than-expected Q4 preliminary revenue.

Wix.com Ltd. (WIX) slid over -3% in pre-market trading after JPMorgan downgraded the stock to Underweight from Neutral.

Unity Software (U) surged about +15% in pre-market trading after the software company raised its Q1 revenue guidance.

TripAdvisor (TRIP) gained over +3% in pre-market trading after BofA upgraded the stock to Buy from Neutral with a price target of $15.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - March 27th

Commercial Metals Company (CMC), Argan (AGX), REX American Resources (REX), Bitgo Holdings (BTGO), Lumexa Imaging Holdings (LMRI), Oxford Industries (OXM), Shoe Carnival (SCVL), CapsoVision (CV), Designer Brands (DBI), Token Cat (TC), The Lovesac Company (LOVE), Buda Juice (BUDA).