S&P Futures Tick Lower Ahead of FOMC Meeting and U.S. Economic Data

March S&P 500 E-Mini futures (ESH25) are trending down -0.19% this morning as investors await the start of the Federal Reserve’s two-day policy meeting and a fresh batch of U.S. economic data.

In yesterday’s trading session, Wall Street’s major indexes ended in the green. Intel (INTC) climbed over +6% and was the top percentage gainer on the Nasdaq 100 after Reuters reported that incoming CEO Lip-Bu Tan was considering significant changes to the company’s chip manufacturing methods and AI strategies. Also, Netflix (NFLX) rose more than +3% after MoffettNathanson upgraded the stock to Buy from Neutral with a price target of $1,100. In addition, Science Applications International Corp. (SAIC) gained over +7% after the information technology company posted better-than-expected Q4 results and raised its full-year guidance. On the bearish side, Tesla (TSLA) slid more than -4% and was the top percentage loser on the Nasdaq 100 after Chinese rival BYD Co. introduced a new electric vehicle system capable of charging a car in just five minutes.

Economic data released on Monday showed that U.S. retail sales crept up +0.2% m/m in February, weaker than expectations of +0.6% m/m. Also, U.S. February core retail sales, which exclude motor vehicles and parts, rose +0.3% m/m, in line with expectations. In addition, the Empire State manufacturing index tumbled to a 14-month low of -20.00 in March, weaker than expectations of -1.90.

“[Yesterday’s] February retail sales report offers evidence of a limited, modest economic slowdown, rather than signaling a gathering recession,” said Jennifer Timmerman at Wells Fargo Investment Institute.

The Federal Reserve kicks off its two-day meeting later in the day. The U.S. central bank is widely expected to hold the Fed funds rate steady at 4.25% to 4.50% on Wednesday. The decision comes amid growing concerns about the potential damage that U.S. President Donald Trump’s tariff policies could inflict on the economy. Market watchers will closely follow Chair Jerome Powell’s post-policy meeting press conference and the central bank’s quarterly “dot plot” in its Summary of Economic Projections for clues on the path ahead. Economists expect policymakers’ updated projections to indicate two quarter-percentage-point cuts this year.

On the economic data front, investors will focus on U.S. Building Permits (preliminary) and Housing Starts data. Economists expect February Building Permits to be 1.450M and Housing Starts to be 1.380M, compared to the prior figures of 1.473M and 1.366M, respectively.

U.S. Industrial Production and Manufacturing Production data will also be closely monitored today. Economists forecast February Industrial Production at +0.2% m/m and Manufacturing Production at +0.3% m/m, compared to January’s figures of +0.5% m/m and -0.1% m/m, respectively.

U.S. Export and Import Price Indexes will be released today as well. Economists anticipate the export price index to be -0.2% m/m and the import price index to be -0.1% m/m in February, compared to the previous figures of +1.3% m/m and +0.3% m/m, respectively. 

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.320%, up +0.33%.

The Euro Stoxx 50 Index is up +0.85% this morning, tracking gains in Asia, as investors continue shifting toward non-U.S. assets amid uncertainties triggered by U.S. President Donald Trump. Automobile and energy stocks outperformed on Tuesday. The ZEW Economic Research Institute reported on Tuesday that German investor morale improved more than expected in March, hitting the highest level since February 2022, as the country’s lawmakers neared a deal to boost spending on defense and infrastructure. Meanwhile, investors are awaiting a key vote in the German parliament on historic debt reforms. Germany’s lower house of parliament is scheduled to vote today on a proposed significant increase in state borrowing to finance a surge in defense and infrastructure spending, which could boost Europe’s largest economy and support growth across the region. Investors will also closely monitor the outcome of a phone call between President Trump and Russian President Vladimir Putin later today, as the U.S. president seeks to persuade his counterpart to agree to a ceasefire in Russia’s three-year war with Ukraine. In corporate news, Befesa SA (BFSA.D.DX) climbed over +3%, extending yesterday’s gains after Bloomberg News reported that buyout firm Triton Partners had built a stake in the recycling company.

European Central Bank Governing Council member Olli Rehn said on Tuesday that trade uncertainty is pressuring the European economy in the short term, and any benefits from increased defense investment will take time to materialize, suggesting the central bank may need to keep cutting rates.

Germany’s ZEW Economic Sentiment Index, Eurozone’s ZEW Economic Sentiment Index, and Eurozone’s Trade Balance were released today.

The German March ZEW Economic Sentiment Index stood at 51.6, stronger than expectations of 48.1.

Eurozone January Trade Balance came in at 1.0B euros, weaker than expectations of 14.0B euros.

Eurozone March ZEW Economic Sentiment Index arrived at 39.8, weaker than expectations of 43.6.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.11%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.20%.

China’s Shanghai Composite Index closed slightly higher today. Home appliance and pharmaceutical stocks led the gains on Tuesday. Over the weekend, China unveiled a special action plan aimed at boosting consumption, a top policy priority for Beijing. However, a scheduled policy briefing on Monday, where authorities were expected to unveil details about efforts to stimulate consumption, failed to provide new catalysts. An official at the briefing said that China’s central bank is examining plans to create new structural monetary policy tools to enhance low-cost financial support for key consumption sectors. Also, Li Chunlin, deputy chief of the National Development and Reform Commission, noted that consumer confidence and demand remain weak. Meanwhile, HSBC raised its 2025 GDP growth forecast for China to 4.8% from 4.5%, citing stronger policy support from Beijing to boost domestic consumption and robust economic activity data for the first two months. The bank also upgraded its 2026 forecast to 4.5% from 4.4%. In other news, U.S. President Donald Trump said on Monday that Chinese leader Xi Jinping would soon visit Washington, as trade tensions between the world’s two largest economies continue to escalate. In corporate news, WuXi AppTec surged over +10% in Hong Kong after announcing a special dividend and share buyback plan. Also, BYD Co. gained more than +4% in Hong Kong after the Chinese automaker introduced a new lineup of electric vehicles, claiming they can charge nearly as quickly as refueling a regular car.

Japan’s Nikkei 225 Stock Index closed higher and hit an almost 3-week high today, tracking overnight gains on Wall Street. Trading firms jumped on Tuesday after Warren Buffett’s Berkshire Hathaway boosted its stakes in the country’s largest trading houses, reinforcing expectations of longer-term growth prospects. Financial stocks also gained ground. The benchmark index briefly surpassed the 38,000 level for the first time since February 27th but struggled to hold above it as investors remained cautious about the market outlook. Meanwhile, Japan’s 10-year government bond yield rose on Tuesday, reversing earlier declines as investors braced for the Bank of Japan’s monetary policy decision. The BOJ is widely expected to keep its policy rate unchanged at 0.5% on Wednesday. Investors will look for clues on the timing of the central bank’s next rate hike during Governor Kazuo Ueda’s post-meeting press conference. In corporate news, IR Japan rose over +3% after the company projected FY25 sales of 5.7 billion yen and announced plans for a 20-yen dividend. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.03% to 22.84.

Pre-Market U.S. Stock Movers

Harrow Health (HROW) soared over +23% in pre-market trading after the company reported better-than-expected preliminary Q4 revenue. 

Grab Holdings (GRAB) climbed more than +6% in pre-market trading after Bloomberg reported that the ride-hailing and food-delivery giant was moving forward with its attempt to take over Indonesian rival GoTo.

Ralph Lauren (RL) gained over +3% in pre-market trading after Goldman Sachs upgraded the stock to Buy from Neutral with a price target of $286.

Block (XYZ) rose more than +1% in pre-market trading after Keefe Bruyette upgraded the stock to Outperform from Market Perform.

PepsiCo (PEP) fell over -1% in pre-market trading after Barclays downgraded the stock to Equal Weight from Overweight.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - March 18th

Ke Hldg (BEKE), Tencent Music Entertainment Group (TME), Elbit Systems (ESLT), ZTO Express Cayman (ZTO), Healthequity (HQY), GDS Holdings (GDS), StoneCo (STNE), Lexinfintech (LX), Up Fintech (TIGR), IHS Holding (IHS), HUYA (HUYA), Trevi Therapeutics (TRVI), SNDL Inc (SNDL), Absci (ABSI), Waldencast Acquisition (WALD), Maravai Lifesciences (MRVI), Citi Trends (CTRN).