Stocks Slip Before the Open as Middle East Conflict Lifts Oil, U.S. Economic Data on Tap

March S&P 500 E-Mini futures (ESH26) are down -0.62%, and March Nasdaq 100 E-Mini futures (NQH26) are down -0.61% this morning as the escalating Middle East conflict pushes oil prices higher and weighs on risk appetite.

The price of WTI crude climbed more than +6% as concerns intensified that the Middle East conflict could disrupt energy markets for an extended period. Iraq halted operations at its oil terminals after two foreign tankers were hit in its waters, igniting fires and causing oil spills. Also, the U.K.’s maritime security agency, UKMTO, said on Thursday that a container vessel was hit off the coast of Dubai. Separately, Oman temporarily evacuated a major export terminal, while Bahrain said Iran had targeted its fuel storage tanks.

The International Energy Agency said the conflict is creating unprecedented upheaval in oil markets, affecting 7.5% of global supply and an even larger share of exports. The IEA said it now expects oil supply to increase by only 1.1 million barrels per day this year, down from its previous forecast of 2.4 million barrels.

Fitch Ratings analysts said in their latest outlook on Wednesday that global economic growth is expected to remain steady this year, provided the current oil price shock proves temporary. However, if oil prices climb to $100 a barrel and remain at that level, global gross domestic product would be 0.4% lower after four quarters, while inflation in Europe and the U.S. would rise by up to 1.5 percentage points.

Beyond the Middle East conflict, investors are looking ahead to a new round of U.S. economic data.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed mixed. Fair Isaac (FICO) slumped over -9% and was the top percentage loser on the S&P 500 after the company announced plans to sell $1 billion in senior notes due 2034 through a private offering. Also, most software stocks slid, with Atlassian Corp. (TEAM) and Workday (WDAY) falling more than -3%. In addition, Campbell’s Co. (CPB) sank over -7% after the packaged food company posted weaker-than-expected FQ2 results and cut its full-year guidance. On the bullish side, Oracle (ORCL) climbed more than +9% after the cloud computing company posted upbeat FQ3 results and raised its fiscal 2027 revenue guidance.

The U.S. Bureau of Labor Statistics report released on Wednesday showed that consumer prices rose +0.3% m/m in February, in line with expectations. On an annual basis, headline inflation rose +2.4% in February, the same as the previous month and in line with expectations. Also, the core CPI, which excludes volatile food and fuel prices, rose +0.2% m/m and +2.5% y/y in February, in line with expectations.

“Regardless of [Wednesday’s] figures, the Federal Reserve is widely expected to hold rates next week,” said Quilter’s Lindsay James. “Markets are working on the assumption that no further cuts will take place during Powell’s tenure as Chair, and attention is instead turning towards the arrival of Kevin Warsh later in the spring.”

U.S. rate futures have priced in a 99.3% chance of no rate change and a 0.7% chance of a 25 basis point rate cut at the March FOMC meeting.

Today, investors will focus on U.S. Initial Jobless Claims data, set to be released in a couple of hours. Economists expect this figure to be 214K, compared to last week’s number of 213K.

U.S. Building Permits (preliminary) and Housing Starts data will also be released today. Economists expect January Building Permits to be 1.420 million and Housing Starts to be 1.340 million, compared to the December figures of 1.455 million and 1.404 million, respectively.

U.S. Trade Balance data will be released today as well. Economists forecast that the trade deficit will narrow to -$66.6 billion in January from -$70.3 billion in December.

In addition, Fed Vice Chair for Supervision Michelle Bowman is set to speak on “Basel III and Bank Capital Rules” later today in Washington, D.C.

On the earnings front, prominent companies such as Adobe (ADBE), Dollar General (DG), Ulta Beauty (ULTA), and Lennar (LEN) are slated to release their quarterly results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.23%, down -0.05%.

The Euro Stoxx 50 Index is down -0.51% this morning as oil prices continued to climb amid the escalating Middle East conflict. Economically sensitive bank stocks tumbled on Thursday due to concerns over the economic impact of higher oil prices. Travel stocks also slid amid the surge in oil prices. At the same time, defense stocks advanced following attacks on vessels in the Strait of Hormuz. The gains were also partly driven by a more than +7% surge in Leonardo Spa (LDO.M.DX) after the Italian group announced new 2026 and 2030 targets. Meanwhile, bond yields rose across the region on Thursday as the Middle East conflict stoked inflation concerns and expectations of interest rate hikes. KBC Bank said it expects the European Central Bank to raise interest rates at its policy meeting next week or in April. In other news, Germany’s IfW institute on Thursday cut its 2026 economic forecast by 0.2 percentage points to 0.8%, citing expectations that commodity prices driven higher by the Middle East conflict will remain elevated for only a few months. In other corporate news, BMW (BMW.D.DX) fell about -1% after the automaker projected a moderate decline in group pre-tax earnings this year and said deliveries would likely stagnate.

The European economic data slate is mainly empty on Thursday.

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.10%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.04%.

China’s Shanghai Composite Index closed slightly lower today, tracking regional declines as the widening Middle East conflict dented risk appetite. Industrial stocks underperformed on Thursday. AI-related and non-ferrous metal stocks also retreated. At the same time, energy stocks advanced, tracking the rise in oil prices. Notably, the benchmark index once again fell far less than its regional peers, continuing a recent pattern of relative resilience despite the escalating Middle East conflict. Capital Economics economist Julian Evans-Pritchard said the conflict is unlikely to materially affect China’s growth, as the economy is less reliant on oil and gas than many other major economies. Pictet Asset Management’s Cary Yeung echoed that view, pointing out that oil and natural gas make up only about 20% of China’s energy mix, with supply risks mitigated by the country’s ability to diversify sourcing to Russia and Latin America. In corporate news, Guotai Junan International slid over -4% in Hong Kong after the brokerage said securities authorities raided its offices this week, confiscating documents and detaining a staff member.

Japan’s Nikkei 225 Stock Index closed lower today, snapping a two-day rebound as oil prices surged on reports of more ship attacks in Gulf waters and terminal shutdowns. Japan imports around 90% of its oil from the Middle East, leaving its economy especially vulnerable to price surges and supply disruptions. Prime Minister Sanae Takaichi said on Wednesday that Japan will release 80 million barrels of oil from its strategic reserves, equal to 45 days of supply, to help cushion global disruptions. However, it did little to boost market sentiment. Takamasa Ikeda, senior portfolio manager at GCI Asset Management, said, “The market is betting that the [Middle East conflict] will be prolonged. Oil prices rose, and that prompted investors to sell stocks.” Real estate, financial, and industrial stocks led the declines on Thursday. A government survey released on Thursday showed that business sentiment among major Japanese firms declined in the first quarter, but remained in positive territory for a third straight quarter. Meanwhile, Japanese government bond yields climbed on Thursday amid inflation worries fueled by higher oil prices. Capital Economics’ Marcel Thieliant said the Bank of Japan is likely to cite higher energy prices as justification for raising its policy rate in April. In other news, foreign investors bought a net 385.5 billion yen worth of Japanese stocks in the week to March 7th, remaining net buyers for an 11th consecutive week despite a selloff in Japanese equities, according to data from the Ministry of Finance. In corporate news, Kyoto Financial Group climbed over +7% after the lender more than doubled its full-year net profit guidance, citing gains from the sale of Nintendo shares. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +3.33% to 44.37.

The Japanese BSI Large Manufacturing Conditions Index stood at 3.8 in the first quarter, weaker than expectations of 5.3.

Pre-Market U.S. Stock Movers

UiPath (PATH) slid over -5% in pre-market trading after the automation software company forecast a slowdown in full-year revenue growth.

Airline stocks fell in pre-market trading as oil prices kept rising, with United Airlines (UAL) and American Airlines (AAL) dropping more than -1%.

Bumble (BMBL) jumped over +23% in pre-market trading after the dating app operator posted better-than-expected Q4 revenue and issued solid Q1 revenue guidance.

Mosaic Co. (MOS) rose over +5% and CF Industries (CF) gained more than +4% in pre-market trading as fertilizer makers continued to benefit from the prospect of higher prices amid shipping disruptions.

Energy stocks advanced in pre-market trading, with the price of WTI crude up more than +6%. Occidental Petroleum (OXY) and APA Corp. (APA) were up more than +1%.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Thursday - March 12th

Adobe (ADBE), Wheaton Precious Metals (WPM), Dollar General (DG), Ulta Beauty (ULTA), Lennar (LEN), DICK’S Sporting Goods (DKS), Rubrik (RBRK), Ollie’s Bargain Outlet Holdings (OLLI), GPGI, Inc. (GPGI), SentinelOne (S), Alliance Laundry Holdings (ALH), Mach Natural Resources LP (MNR), EverCommerce (EVCM), Mineralys Therapeutics (MLYS), Nektar Therapeutics (NKTR), TIC Solutions (TIC), IperionX (IPX), Capricor Therapeutics (CAPR), Corvus Pharmaceuticals (CRVS), McEwen (MUX), G-III Apparel Group (GIII), Jefferson Capital (JCAP), ProFrac Holding (ACDC), Abacus Global Management (ABX), Mission Produce (AVO), Hallador Energy Company (HNRG), Once Upon A Farm, PBC (OFRM), Atlanticus Holdings (ATLC), American Public Education (APEI), Greenfire Resources (GFR), Angel Studios (ANGX), PagerDuty (PD), Eastman Kodak Company (KODK), Green Dot (GDOT), Allogene Therapeutics (ALLO), VAALCO Energy (EGY), Build-A-Bear Workshop (BBW), Upstream Bio (UPB), Legacy Housing (LEGH), Karat Packaging (KRT), Calavo Growers (CVGW), CION Investment (CION), Zumiez (ZUMZ), KinderCare Learning Companies (KLC), Urban One (UONEK), Kingsway Financial Services (KFS), BK Technologies (BKTI), BRT Apartments (BRT), The Oncology Institute (TOI), Runway Growth Finance (RWAY), Chicago Atlantic Real Estate Finance (REFI), Turtle Beach (TBCH), Limoneira Company (LMNR), Funko (FNKO), New England Realty Associates Limited Partnership (NEN), KORU Medical Systems (KRMD), Vuzix (VUZI), Rapid Micro Biosystems (RPID), Vaxart (VXRT), America's Car-Mart (CRMT), Open Lending (LPRO), Comtech Telecommunications (CMTL), The Beauty Health Company (SKIN), Gambling.com Group (GAMB), Health Catalyst (HCAT), WM Technology (MAPS), The Joint (JYNT), Surf Air Mobility (SRFM), Precision BioSciences (DTIL), Sunrise Realty Trust (SUNS), Inovio Pharmaceuticals (INO), American Vanguard (AVD), CareCloud (CCLD), American Outdoor Brands (AOUT).