Stocks Slip Before the Open as Bond Yields Climb on Inflation Worries, U.S. Economic Data on Tap

March S&P 500 E-Mini futures (ESH26) are down -0.29%, and March Nasdaq 100 E-Mini futures (NQH26) are down -0.40% this morning as Treasury yields advanced for a fourth consecutive day amid worries that surging energy prices from the Middle East conflict could stoke inflation.

The 10-year T-note yield rose three basis points to 4.13% on Thursday. The price of WTI crude climbed more than +3% amid growing disruptions to energy markets caused by the conflict.

Earlier on Thursday, stock index futures were buoyed by a report that Iran recently signaled its willingness to give up its uranium stockpiles. The state-run Islamic Republic News Agency quoted Deputy Foreign Minister Majid Takht-Ravanchi as saying that Iran had told the U.S. in earlier talks it was ready to relinquish its stockpiles of highly enriched uranium for “something good in return.” Takht-Ravanchi made the remarks in a late Wednesday interview, the report said.

Investors now await a new round of U.S. economic data.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed higher. Chip stocks climbed, with Intel (INTC) and Advanced Micro Devices (AMD) rising over +5%. Also, cryptocurrency-exposed stocks rallied after Bitcoin climbed more than +7%, with Coinbase Global (COIN) jumping more than +14% and Strategy (MSTR) surging over +10% to lead gainers in the Nasdaq 100. In addition, Moderna (MRNA) soared about +16% and was the top percentage gainer on the S&P 500 after the vaccine maker said it would pay $950 million to resolve patent litigation with Arbutus Biopharma and Genevant Sciences related to its Covid-19 shot. On the bearish side, GitLab (GTLB) slid over -6% after the provider of software development tools issued disappointing FY27 guidance.

The ADP National Employment report released on Wednesday showed that U.S. private nonfarm payrolls rose by 63K in February, stronger than expectations of 50K. Also, the U.S. ISM services index unexpectedly rose to 56.1 in February, stronger than expectations of a decline to 53.5. At the same time, the U.S. February S&P Global services PMI was revised downward to 51.7 from the preliminary reading of 52.3.

“Investors interpreted the positive ISM services index, coupled with a softer price sub-index, as reasons to be optimistic that the U.S. economy could remain resilient amid geopolitical tensions,” Commerzbank Research analysts said.

Fed Governor Stephen Miran said on Wednesday he believes it remains appropriate to continue cutting interest rates, as it is too early to assess the impact of the Middle East conflict on the U.S. economy. “Thus far, the evidence from events over the weekend hasn’t led me to change any of my forecasts for the labor market, for inflation,” Miran said. At the same time, Cleveland Fed President Beth Hammack said it was too early to assess the economic impact of the conflict and supported keeping interest rates unchanged for “quite some time.”

Meanwhile, the Fed said on Wednesday in its Beige Book survey of regional business contacts that U.S. economic activity expanded at a “slight to moderate pace” across most districts in recent weeks, although a growing number reported flat or declining activity. The report noted that in many districts “sales were dampened by economic uncertainty, increased price sensitivity and lower-income consumers pulling back on spending.” The report also said that employment levels were generally stable, while wages increased at a modest or moderate pace in most regions. In addition, eight of the Fed’s 12 districts reported moderate inflation.

U.S. rate futures have priced in a 97.3% chance of no rate change and a 2.7% 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 215K, compared to last week’s number of 212K.

U.S. Unit Labor Costs and Nonfarm Productivity preliminary data will also be closely watched today. Economists forecast Q4 Unit Labor Costs to be +2.0% q/q and Nonfarm Productivity to be +1.9% q/q, compared to the third-quarter numbers of -1.9% q/q and +4.9% q/q, respectively.

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

In addition, market participants will be looking toward a speech from Fed Vice Chair for Supervision Michelle Bowman.

On the earnings front, prominent companies such as Costco Wholesale (COST), Marvell Technology (MRVL), Ciena (CIEN), and Kroger (KR) 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 4.133%, up +1.22%.

The Euro Stoxx 50 Index is up +0.41% this morning, paring earlier losses following the report that Iran recently signaled its willingness to give up its uranium stockpiles. Utility, food, and energy stocks were among the biggest gainers on Thursday. Bank stocks also advanced. At the same time, mining stocks retreated. Data from Eurostat released on Thursday showed that the Eurozone’s monthly retail sales unexpectedly fell in January, even as consumer confidence improved at the start of the year. Separately, data showed that France’s monthly industrial production returned to growth in January, supported by a pickup in transport output. Meanwhile, European Central Bank Vice President Luis de Guindos said on Thursday the central bank could recalibrate its stance if the Middle East conflict persists, while Governing Council member Francois Villeroy de Galhau said he sees no case for raising rates. Investor focus now shifts to comments from ECB President Christine Lagarde later in the day. Morgan Stanley became the latest Wall Street brokerage to predict that the ECB will hold interest rates steady through 2026, citing potential inflation risks stemming from the conflict. In corporate news, Airbus SE (AIR.FP) gained over +2% after activist hedge fund TCI Fund Management increased its stake in the company to around 5%. At the same time, DHL Group (DHL.D.DX) slid more than -5% after the German logistics group posted a 1.3% drop in Q4 operating profit and gave a cautious 2026 outlook.

France’s Industrial Production and Eurozone’s Retail Sales data were released today.

The French January Industrial Production rose +0.5% m/m, stronger than expectations of +0.4% m/m.

Eurozone’s January Retail Sales fell -0.1% m/m and rose +2.0% y/y, compared to expectations of +0.3% m/m and +1.7% y/y.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.64%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.90%.

China’s Shanghai Composite Index closed higher today after the National People’s Congress unveiled its Five-Year Plan, setting out targets for growth, fiscal spending, industrial policy, and defense. AI-related, chip, and biotech stocks surged on Thursday after Chinese authorities vowed to support these emerging strategic sectors. China on Thursday pledged to step up investment in high-tech industries and scientific innovation, according to a five-year plan presented to lawmakers for review. Beijing also vowed to broaden the use of AI across the economy. At the same time, consumption-related stocks slid amid investor skepticism over whether Beijing can successfully boost domestic demand. Meanwhile, China set its 2026 economic growth target at 4.5% to 5%, marking its lowest growth goal since 1991. However, the move was widely anticipated, reflecting slower growth while providing policymakers with greater flexibility to tackle domestic weakness and external uncertainty. China’s state media said the country’s lower economic growth target reflects a structural shift rather than fading momentum. To help the economy achieve this year’s target, the Chinese government said it would maintain its fiscal deficit at 4.0% of GDP. China also set a consumer inflation target of around 2.0% for this year, underscoring efforts to prevent a deflationary spiral.

Japan’s Nikkei 225 Stock Index closed higher today, as bargain hunters stepped in to end a three-session losing streak triggered by fears of the escalating Middle East conflict. Helping buoy sentiment were Wall Street’s overnight gains after U.S. economic data eased inflation concerns. Energy, financial, and mining stocks led the gains on Thursday. Citigroup strategists have said Japanese equities are best positioned globally for a strong rebound and that the Nikkei is a compelling option for “buying the dip.” However, concerns persist as crude oil continued its advance, which could limit the extent of the rebound in risk assets. Takuro Hayashi, head of the investment research department at IwaiCosmo Securities, said, “If higher oil prices persist, that would represent a straightforward hit to the Japanese economy.” Meanwhile, Japan’s largest labor union group, Rengo, said on Thursday its member unions are demanding an average wage increase of 5.94% this year, highlighting strong momentum in annual pay talks closely monitored by Bank of Japan policymakers. In other news, foreign investors bought a net 973.9 billion yen worth of Japanese stocks in the week to February 28th, extending their buying streak to a 10th consecutive week, according to data from Japan’s Ministry of Finance. In corporate news, Shin-Etsu Chemical rose over +4% after the Nikkei newspaper reported that the company plans to invest $3.4 billion in the U.S. to boost production of feedstocks used to produce vinyl chloride resin for housing pipes. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -39.55% to 32.07.

Pre-Market U.S. Stock Movers

Broadcom (AVGO) climbed over +6% in pre-market trading after the semiconductor designer reported stronger-than-expected FQ1 results, issued above-consensus FQ2 revenue guidance, and CEO Hock Tan said AI chip sales are expected to exceed $100 billion next year.

The Trade Desk (TTD) jumped over +17% in pre-market trading after The Information reported that OpenAI had held early discussions about growing its advertising business with the company.

Veeva Systems (VEEV) surged more than +11% in pre-market trading after the life sciences cloud solutions provider posted upbeat Q4 results and issued strong FY27 guidance.

Rigetti Computing (RGTI) slid over -4% in pre-market trading after the quantum-computing company reported weaker-than-expected Q4 revenue.

Walmart (WMT) fell more than -1% in pre-market trading after Erste Group downgraded the stock to Hold from Buy.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - March 5th

Costco Wholesale (COST), Marvell Technology (MRVL), Ciena (CIEN), The Kroger Co. (KR), Burlington Stores (BURL), Samsara (IOT), The Cooper Companies (COO), Guidewire Software (GWRE), BJ’s Wholesale Club Holdings (BJ), The Gap (GAP), The Toro Company (TTC), Victoria’s Secret & Co. (VSCO), Methanex (MEOH), Ero Copper (ERO), Liquidia (LQDA), Pattern Group (PTRN), Rumble (RUM), Amprius Technologies (AMPX), Tango Therapeutics (TNGX), John Wiley & Sons (WLYB), John Wiley & Sons (WLY), Global Ship Lease (GSL), Distribution Solutions Group (DSGR), Capital Clean Energy Carriers (CCEC), Olaplex Holdings (OLPX), Allient (ALNT), ArriVent BioPharma (AVBP), Quanex Building Products (NX), Stratasys (SSYS), Annexon (ANNX), Myers Industries (MYE), Lightwave Logic (LWLG), Omada Health (OMDA), Nutex Health (NUTX), Kura Oncology (KURA), Lexicon Pharmaceuticals (LXRX), Granite Ridge Resources (GRNT), Grid Dynamics Holdings (GDYN), Ambiq Micro (AMBQ), Bioventus (BVS), CorMedix (CRMD), Smith & Wesson Brands (SWBI), Altimmune (ALT), Invivyd (IVVD), Lineage Cell Therapeutics (LCTX), REGENXBIO (RGNX), Gevo, Inc. (GEVO), Ranpak Holdings (PACK), W&T Offshore (WTI), Ranger Energy Services (RNGR), Atea Pharmaceuticals (AVIR), AerSale (ASLE), Owlet (OWLT), Palladyne AI (PDYN), TriSalus Life Sciences (TLSI), Methode Electronics (MEI), Entravision Communications (EVC), TruBridge (TBRG), ClearPoint Neuro (CLPT), Profound Medical (PROF), Virtuix Holdings (VTIX), Amplify Energy (AMPY), Kingstone Companies (KINS), flyExclusive (FLYX), Information Services Group (III), MediWound (MDWD), Editas Medicine (EDIT).