Stocks Slip Before the Open on U.S.-Iran Fears, Economic Data and Walmart Earnings on Tap

March S&P 500 E-Mini futures (ESH26) are down -0.32%, and March Nasdaq 100 E-Mini futures (NQH26) are down -0.36% this morning, pointing to a lower open on Wall Street as worries about a potential conflict between the U.S. and Iran dampened sentiment.

Investors remain on edge about the prospect of U.S. military intervention in Iran, even as talks on Tehran’s nuclear program in Geneva showed signs of progress. The Wall Street Journal reported on Wednesday that the U.S. has assembled its largest air power presence in the Middle East since the 2003 invasion of Iraq and is in a position to strike Iran. The head of the United Nations nuclear watchdog warned on Thursday that the window for a diplomatic deal on Iran’s atomic program is closing. The price of WTI crude rose above $66 a barrel.

Also adding to the negative sentiment on Thursday was renewed caution about the outlook for AI. Most members of the Magnificent Seven stocks edged lower in pre-market trading.

Investors now await a new round of U.S. economic data, remarks from Federal Reserve officials, and an earnings report from retail giant Walmart.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed higher. Global Payments (GPN) surged over +16% and was the top percentage gainer on the S&P 500 after the financial software provider issued above-consensus FY26 adjusted EPS guidance. Also, most chip stocks advanced, with Micron Technology (MU) rising more than +5% and Applied Materials (AMAT) gaining over +2%. In addition, Palantir Technologies (PLTR) rose more than +1% after Mizuho upgraded the stock to Outperform from Neutral. On the bearish side, Palo Alto Networks (PANW) slumped over -6% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the cybersecurity firm cut its full-year adjusted EPS guidance.

Economic data released on Wednesday showed that U.S. durable goods orders fell -1.4% m/m in December, stronger than expectations of -1.8% m/m, while core durable goods orders, which exclude transportation, climbed +0.9% m/m, stronger than expectations of +0.3% m/m. Also, U.S. December housing starts rose +6.2% m/m to a 5-month high of 1.404 million, stronger than expectations of 1.310 million, and building permits, a proxy for future construction, rose +4.3% m/m to a 9-month high of 1.448 million, stronger than expectations of 1.400 million. In addition, U.S. industrial production rose +0.7% m/m in January, stronger than expectations of +0.4% m/m.

“In the context of a data-dependent Committee, the incoming economic data justified last month’s pause on the journey to neutral,” said Ian Lyngen at BMO Capital Markets. “The open question is: how high is the bar to resume rate cuts?”

Meanwhile, the minutes of the Federal Open Market Committee’s January 27-28 meeting, released on Wednesday, showed that “several” policymakers suggested the central bank may have to raise rates if inflation remains above their target. “Several participants indicated that they would have supported a two-sided description of the committee’s future interest-rate decisions, reflecting the possibility that upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above-target levels,” according to the FOMC minutes. The minutes also showed that a “vast majority of participants judged that downside risks to employment had moderated in recent months while the risk of more persistent inflation remained.” Several officials saw scope for additional rate cuts if inflation eased as anticipated, though most said progress on inflation could be slower than generally forecast.

U.S. rate futures have priced in a 94.1% chance of no rate change and a 5.9% chance of a 25 basis point rate cut at the March FOMC meeting.

Today, investors will focus on U.S. Initial Jobless Claims data, which is set to be released in a couple of hours. Economists expect this figure to be 223K, compared to last week’s number of 227K.

The U.S. Philadelphia Fed Manufacturing Index will also be closely watched today. Economists anticipate that the Philly Fed manufacturing index will stand at 7.5 in February, compared to last month’s value of 12.6.

U.S. Trade Balance data will be released today. Economists forecast that the trade deficit will narrow to -$55.5 billion in December from -$56.8 billion in November.

The National Association of Realtors’ pending home sales data will be reported today. Economists expect the January figure to rise +1.4% m/m following a -9.3% m/m drop in December.

The Conference Board’s Leading Economic Index for the U.S. will come in today. Economists expect the December figure to drop -0.2% m/m, compared to the previous number of -0.3% m/m.

The EIA’s weekly crude oil inventories report will be released today as well. Economists estimate this figure to be 1.7 million barrels, compared to last week’s value of 8.5 million barrels.

In addition, market participants will parse comments today from Atlanta Fed President Raphael Bostic, Fed Vice Chair for Supervision Michelle Bowman, Minneapolis Fed President Neel Kashkari, and Chicago Fed President Austan Goolsbee.

On the earnings front, notable companies such as Walmart (WMT), Deere & Company (DE), Newmont (NEM), and Copart (CPRT) are set to report their quarterly figures today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.094%, up +0.34%.

The Euro Stoxx 50 Index is down -0.83% this morning, retreating from a record high as investors digest a mixed bag of corporate earnings reports, with rising geopolitical tensions adding to the cautious mood. Mining stocks led the declines on Thursday, dragged by a more than -4% drop in Rio Tinto Plc (RIO.LN) after the world’s largest iron ore producer posted weaker-than-expected annual earnings. Utility stocks also slumped following disappointing results from Centrica, with sentiment in the sector further dampened after Italy approved a hike in corporate taxes on energy firms to help reduce power bills. Investors’ risk appetite was also curbed after the U.S. and Iran stepped up military activity in the oil-rich Middle East, even as talks on Tehran’s nuclear program in Geneva showed signs of progress. Meanwhile, Reuters reported on Thursday that European Central Bank President Christine Lagarde told colleagues she remains focused on her role and would inform them first if she were planning to step down, a message they interpreted as meaning she was not about to resign. On the economic front, data showed that the euro area current account surplus widened in December, driven by a sharp narrowing of the deficit on primary income. In other corporate news, Airbus SE (AIR.FP) slid over -6% after the world’s largest planemaker lowered its plane delivery target, blaming engine maker Pratt & Whitney for failing to reach a crucial supply agreement. At the same time, Nestle S.A. (NESN.Z.IX) gained more than +2% after the company reported stronger-than-expected Q4 sales growth and said it plans to sell its ice cream business.

Eurozone’s Current Account data was released today.

Eurozone’s December Current Account stood at 14.6 billion euros, stronger than expectations of 9.8 billion euros.

Japan’s Nikkei 225 Stock Index (NIK) closed up +0.57%, while China’s financial markets were closed for a holiday.

Japan’s Nikkei 225 Stock Index closed higher today, tracking overnight gains on Wall Street. Japanese equities were also underpinned by a weaker yen. In addition, sentiment was supported by renewed optimism surrounding Sanae Takaichi’s stimulus plan after she was formally reappointed as prime minister on Wednesday, following a landslide general election victory earlier this month. Ryotaro Sawada, senior analyst at Tokai Tokyo Intelligence Laboratory, said, “With all cabinet ministers reappointed, swift policy execution is expected, which is seen as another positive for the stock market.” Real estate, energy, and financial stocks led the gains on Thursday. Government data released on Thursday showed that Japan’s monthly core machinery orders, a key leading indicator of capital spending over the next six to nine months, jumped at a record pace in December, driven by large-scale projects, highlighting strong corporate momentum as Prime Minister Sanae Takaichi seeks to boost investment in priority sectors. The figures provide some relief following weaker-than-expected fourth-quarter GDP data. Meanwhile, Japan’s super-long bond yields fell on Thursday despite relatively weaker demand at a 20-year debt auction, signaling confidence among investors. In other news, foreign investors bought a net 1.42 trillion yen ($9.15 billion) worth of Japanese stocks in the week ended February 14th, the largest amount since October 11th and the eighth straight week of net buying, according to Ministry of Finance data. In corporate news, Japan Steel Works, a major supplier of large forged components for the nuclear industry, jumped over +9% following a report that the construction of next-generation nuclear reactors was being considered for the second phase of Japan’s planned $550 billion investment in the U.S. Investors are looking ahead to Japan’s January National Core CPI figures due on Friday, which are expected to ease while remaining close to the Bank of Japan’s target. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +4.23% to 29.07.

The Japanese December Core Machinery Orders jumped +19.1% m/m and +16.8% y/y, stronger than expectations of +5.1% m/m and +3.9% y/y.

China’s Shanghai Composite Index was closed today for the Lunar New Year holiday. Mainland China’s financial markets will reopen on Tuesday, February 24th.

Pre-Market U.S. Stock Movers

Most members of the Magnificent Seven stocks edged lower in pre-market trading, with Tesla (TSLA) falling about -0.7% and Meta Platforms (META) dropping -0.6%.

Carvana (CVNA) plunged over -16% in pre-market trading after the used-car retailer reported weaker-than-expected Q4 adjusted EBITDA.

Avis Budget Group (CAR) slumped more than -14% in pre-market trading after the car-rental company reported weaker-than-expected Q4 results.

Figma (FIG) surged more than +11% in pre-market trading after the design software company posted upbeat Q4 results and issued strong FY26 revenue guidance.

DoorDash (DASH) climbed over +10% in pre-market trading after the delivery company reported better-than-expected Q4 marketplace gross order value and provided above-consensus Q1 marketplace GOV guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - February 19th

Walmart (WMT), Deere & Company (DE), Newmont (NEM), The Southern Company (SO), Quanta Services (PWR), Targa Resources (TRGP), Comfort Systems USA (FIX), Cenovus Energy (CVE), Consolidated Edison (ED), Live Nation Entertainment (LYV), Copart (CPRT), Insmed (INSM), Extra Space Storage (EXR), CenterPoint Energy (CNP), TechnipFMC (FTI), Evergy (EVRG), Alliant Energy (LNT), Akamai Technologies (AKAM), Fidelity National Financial (FNF), UL Solutions (ULS), Guardant Health (GH), Gaming and Leisure Properties (GLPI), DT Midstream (DTM), American Homes 4 Rent (AMH), Texas Roadhouse (TXRH), Wayfair (W), Madrigal Pharmaceuticals (MDGL), Onto Innovation (ONTO), First Majestic Silver (AG), Pool Corporation (POOL), EPAM Systems (EPAM), Praxis Precision Medicines (PRAX), Eldorado Gold (EGO), LKQ Corporation (LKQ), IDACORP (IDA), Floor & Decor Holdings (FND), Vicor (VICR), GATX Corporation (GATX), Transocean (RIG), Sprouts Farmers Market (SFM), Casella Waste Systems (CWST), Dropbox (DBX), Valaris (VAL), Riot Platforms (RIOT), Universal Display (OLED), Sensata Technologies Holding (ST), Laureate Education (LAUR), Choice Hotels International (CHH), iRhythm Holdings (IRTC), Howard Hughes Holdings (HHH), Lemonade (LMND), Century Aluminum Company (CENX), Brady (BRC), Opendoor Technologies (OPEN), Etsy, Inc. (ETSY), GRAIL (GRAL), Garrett Motion (GTX), WillScot Holdings (WSC), F&G Annuities & Life (FG), YETI Holdings (YETI), ICU Medical (ICUI), Centerra Gold (CGAU), Americold Realty Trust (COLD), Workiva (WK), The Chemours Company (CC), Integer Holdings (ITGR), Cushman & Wakefield (CWK), Hamilton Insurance Group (HG), Visteon (VC), CarGurus (CARG), Travere Therapeutics (TVTX), RingCentral (RNG), Park Hotels & Resorts (PK), Alarm.com Holdings (ALRM), Perdoceo Education (PRDO), Select Medical Holdings (SEM), Expro Group Holdings (XPRO), Federal Agricultural Mortgage (AGM), Navios Maritime Partners (NMM), Pediatrix Medical Group (MD), Appian (APPN), Savers Value Village (SVV), Six Flags Entertainment (FUN), Ardelyx (ARDX), Pulse Biosciences (PLSE), Amylyx Pharmaceuticals (AMLX), i-80 Gold (IAUX), World Kinect (WKC), Five9 (FIVN), AXT, Inc. (AXTI), Tandem Diabetes Care (TNDM), LegalZoom.com (LZ), Upbound Group (UPBD), Harmonic (HLIT).