Stock Index Futures Slip as Trump’s Hormuz Deadline Looms

June S&P 500 E-Mini futures (ESM26) are down -0.26%, and June Nasdaq 100 E-Mini futures (NQM26) are down -0.38% this morning as investors remain wary ahead of President Trump’s deadline for Iran to reach a deal that includes reopening the Strait of Hormuz.

Stock index futures briefly turned higher after Axios reported that President Trump could delay military strikes against Iran’s key infrastructure if he sees a deal coming together. Also, regional mediators signaled that they were nearing an agreement. The U.S. president insists that any deal must guarantee uninterrupted passage through the Strait of Hormuz.

President Trump has threatened to wipe out Iran “in one night” if a deal to reopen the Strait of Hormuz is not reached by his deadline, which is set to expire at 8 p.m. Eastern Time today. If no deal is reached with Iran to end the war and reopen the Strait of Hormuz, “they’re going to have no bridges. They’re going to have no power plants,” Mr. Trump said. Meanwhile, Tehran and Washington on Monday rejected each other’s cease-fire proposals. The price of WTI crude rose over +2% on Tuesday after Iran’s Mehr agency reported that explosions were heard on Kharg Island.

Market participants are also awaiting a fresh batch of U.S. economic data and remarks from Federal Reserve officials. 

In yesterday’s trading session, Wall Street’s main stock indexes ended in the green. Chip and AI-infrastructure stocks climbed, with Seagate Technology Holdings (STX) rising over +5% and Micron Technology (MU) gaining more than +3%. Also, AppLovin (APP) advanced over +6% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after Wells Fargo raised its price target on the stock to $560 from $543. In addition, Soleno Therapeutics (SLNO) jumped more than +32% after Neurocrine agreed to acquire the company for about $2.9 billion. On the bearish side, Tesla (TSLA) slid over -2%, extending last Thursday’s drop after it reported weaker-than-expected Q1 vehicle deliveries, with JPMorgan warning that the stock could drop further from current levels.

Economic data released on Monday showed that the U.S. ISM services index fell to 54.0 in March as employment contracted by the most since 2023 and input prices rose sharply. Economists had expected a reading of 54.8.

“The mixed signals illustrate the uncertain time for most businesses,” according to Jeff Roach at LPL Financial. “For now, given last Friday’s payroll numbers, Fed policymakers have the luxury of remaining in ‘wait and see’ mode.”

Meanwhile, U.S. rate futures have priced in a 99.5% chance of no rate change and a 0.5% chance of a 25 basis point rate hike at the April FOMC meeting.

Today, investors will focus on U.S. Durable Goods Orders and Core Durable Goods Orders data, set to be released in a couple of hours. Economists expect February Durable Goods Orders to drop -1.1% m/m and Core Durable Goods Orders to rise +0.5% m/m, compared to the prior numbers of unchanged m/m and +0.4% m/m, respectively.

The Fed’s Consumer Credit report will also be released today. Economists expect the U.S. Consumer Credit to be $10.5 billion in February, compared to the previous figure of $8.05 billion.

In addition, market participants will parse comments today from Fed Vice Chair Philip Jefferson and Chicago Fed President Austan Goolsbee.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.34%, down -0.09%.

The Euro Stoxx 50 Index is up +0.65% this morning as trading resumed after the long Easter weekend, with investors awaiting U.S. President Trump’s deadline for Iran to reach a deal. Bank stocks were among the biggest gainers on Tuesday. Also, media stocks popped, led by a more than +11% jump in Universal Music Group (UMG.NA) after Pershing Square proposed a cash-and-stock takeover valued at roughly 55.75 billion euros ($64.31 billion). A survey released on Tuesday showed that the Eurozone’s private sector expansion slowed markedly in March as the Middle East conflict pushed up energy costs and disrupted supply chains, with overall demand declining for the first time in eight months. Chris Williamson, chief business economist at S&P Global Market Intelligence, said, “March’s PMI indicates that the Eurozone economy has already been hit hard by the war in the Middle East.” A separate survey showed that the Sentix index measuring investor morale in the Eurozone dropped sharply in April, hit by higher energy prices and supply chain disruptions stemming from the Middle East conflict. “Investors realize that recession is once again on the table,” Sentix said. Meanwhile, European Central Bank Governing Council member Pierre Wunsch told The Wall Street Journal in an interview published on Tuesday that the central bank may need to raise its key interest rate several times if the energy crisis triggered by the Middle East conflict persists, with an initial move possible later this month. Also, ECB policymaker Dimitar Radev told Reuters that Eurozone inflation expectations risk accelerating more quickly than before, and the central bank must be prepared to raise interest rates promptly if signs of persistent price pressures emerge. Traders are now pricing in roughly three ECB rate hikes by the end of 2026. In other corporate news, Asml Holding (ASML.NA) fell over -2% after a bipartisan group of U.S. lawmakers proposed legislation to impose additional restrictions on exports of chipmaking equipment to China.

Eurozone’s Composite PMI, Eurozone’s Services PMI, and Eurozone’s Sentix Investor Confidence Index were released today.

Eurozone’s March Composite PMI came in at 50.7, stronger than expectations of 50.5.

Eurozone’s March Services PMI stood at 50.2, stronger than expectations of 50.1.

The Eurozone April Sentix Investor Confidence Index arrived at -19.2, weaker than expectations of -7.5.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.26%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.03%.

China’s Shanghai Composite Index closed higher today despite heightened uncertainty surrounding the Middle East conflict. Investors returning from the Tomb-Sweeping Day holiday are closely watching developments in the Middle East, as U.S. President Trump’s Tuesday night deadline for Iran to reopen the Strait of Hormuz approaches. Chip stocks jumped on Tuesday as investors wagered on stronger policy support from Beijing after a bipartisan group of U.S. lawmakers introduced a bill to tighten restrictions on exports of chipmaking equipment to China. Also, energy stocks advanced after Chinese President Xi Jinping urged faster planning and construction of a new energy system to ensure the country’s energy security. At the same time, auto stocks slipped after three Democratic senators called on Trump to bar Chinese automakers from producing vehicles in the U.S. Meanwhile, Citi analysts said Chinese consumer stocks could encounter some near-term headwinds from the Middle East conflict, although their long-term prospects remain favorable. Investor attention this week is on China’s key inflation gauges for March. Economists expect China’s consumer inflation to cool slightly, partly as holiday-related effects that boosted February’s reading fade, while producer prices are projected to finally return to positive territory, reflecting the impact of surging energy costs.

Japan’s Nikkei 225 Stock Index closed just above the flatline today as investors remained cautious amid uncertainty surrounding the Middle East conflict. U.S. President Donald Trump, during a Monday afternoon White House briefing, reiterated a Tuesday night deadline for Iran to reach a deal or face strikes on civilian infrastructure, while noting that talks with Tehran are “going well.” Software and real estate stocks were the biggest gainers on Tuesday. At the same time, telecom and automobile stocks underperformed. Government data released on Tuesday showed that Japan’s annual household spending fell in February, marking a third straight monthly drop, partly as consumers trimmed purchases of food items hit by rising prices. Separately, preliminary data showed that Japan’s leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, reached its highest level since August 2022 in February. Meanwhile, Japanese government bonds rose on Tuesday after a well-received 30-year bond auction reassured investors, easing fears that demand for the sale could be soft. Elsewhere, Japanese Finance Minister Satsuki Katayama said on Tuesday that the government would remain in close coordination with other Group of Seven countries as uncertainties surrounding the Middle East conflict keep financial markets highly volatile. Investor focus now turns to Japan’s wage data for February due on Wednesday, with all eyes on the inflation-adjusted gauge after it turned positive in January for the first time in over a year. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +2.98% to 39.75.

The Japanese February Household Spending rose +1.5% m/m and fell -1.8% y/y, weaker than expectations of +2.6% m/m and -0.8% y/y.

The Japanese February Leading Index stood at 112.4, in line with expectations.

Pre-Market U.S. Stock Movers

The Magnificent Seven stocks edged lower in pre-market trading, with Tesla (TSLA) and Nvidia (NVDA) falling over -1%.

Most chip stocks fell in pre-market trading, with Marvell Technology (MRVL) sliding over -2% and Advanced Micro Devices (AMD) dropping more than -1%.

Insulet (PODD) slipped over -1% in pre-market trading after Citi downgraded the stock to Neutral from Buy.

Health insurance stocks climbed in pre-market trading after the government said it plans a larger-than-anticipated increase in 2027 payment rates for Medicare Advantage plans. Humana (HUM) is up over +10%. Also, UnitedHealth Group (UNH) is up more than +6%, and Elevance Health (ELV) is up over +5%.

Broadcom (AVGO) climbed about +3% in pre-market trading after a filing disclosed the extension of its partnership with Alphabet through 2031.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - April 7th

Levi Strauss & Co. (LEVI), Aehr Test Systems (AEHR), The Greenbrier Companies (GBX), Phoenix Education Partners (PXED), Kura Sushi USA (KRUS), Unity Bancorp (UNTY), HomesToLife (HTLM).