Stock Index Futures Muted as Oil Prices Resume Advance After Iran Strikes, FOMC Meeting in Focus

March S&P 500 E-Mini futures (ESH26) are down -0.02%, and March Nasdaq 100 E-Mini futures (NQH26) are down -0.04% this morning, pointing to a muted open on Wall Street after a tech-led rebound in the prior session as attacks on critical energy infrastructure in the Middle East sparked a fresh climb in oil prices.

The price of WTI crude climbed over +3% after Iran intensified attacks on energy infrastructure around the Persian Gulf. In the latest developments, operations were halted at the Shah field in the United Arab Emirates, while an Iraqi oil field and a major Emirati port were also struck by Iranian drones and missiles. Also, no immediate relief emerged for the Strait of Hormuz, as several U.S. allies rejected President Trump’s request to help reopen the key oil route.

The Middle East conflict has moved into its 18th day with no end in sight. Reuters reported on Tuesday that Iran’s Supreme Leader Ayatollah Mojtaba Khamenei has rejected proposals to ease tensions or pursue a ceasefire with the U.S. that were conveyed to Tehran by two intermediary countries.

Beyond the Middle East conflict, investors are looking ahead to the start of the Federal Reserve’s two-day policy meeting.

In yesterday’s trading session, Wall Street’s main stock indexes closed sharply higher. Chip and AI-infrastructure stocks rallied, with Sandisk (SNDK) climbing over +6% and Arm Holdings (ARM) rising more than +5%. Also, Meta Platforms (META) gained over +2% after Reuters reported that the company was planning layoffs that could affect 20% of its 80,000 employees. In addition, Dollar Tree (DLTR) advanced more than +6% after the discount retailer posted better-than-expected Q4 results. On the bearish side, fertilizer stocks slid, with Nutrien (NTR) falling over -6% and CF Industries Holdings (CF) dropping more than -5% after Scotiabank downgraded both names.

“While markets may experience some relief if the situation in the Middle East doesn’t notably deteriorate, any rebound in stocks risks being short-lived without clearer signs of an off-ramp that will allow oil prices to cool,” said Chris Larkin at E*Trade from Morgan Stanley.

Economic data released on Monday showed that U.S. industrial production rose +0.2% m/m in February, stronger than expectations of +0.1% m/m, and manufacturing production rose +0.2% m/m, stronger than expectations of +0.1% m/m. At the same time, the U.S. March Empire State manufacturing index fell to -0.2, weaker than expectations of 4.0.

The Federal Reserve kicks off its two-day meeting later in the day. The central bank is widely expected to keep the Fed funds rate unchanged in a range of 3.50% to 3.75% for a second straight meeting. The key question for market watchers will be what signals the Fed delivers on the outlook for rate cuts in the months ahead amid renewed tremors in the labor market and the Middle East conflict that has driven oil prices sharply higher. Investors will closely watch Chair Jerome Powell’s post-policy meeting press conference, which may offer insight into how policymakers see the Middle East conflict affecting the U.S. economy. The Fed will also release updated projections for the economy along with its “dot plot” interest-rate forecasts.

President Trump on Monday urged Fed Chair Jerome Powell to cut interest rates “right now,” saying at a White House meeting that the central bank “should have a special meeting” to lower rates. “What’s a better time to cut interest rates than now? A third-grade student would know that,” Trump said.

On the economic data front, investors will focus on the National Association of Realtors’ pending home sales data, set to be released in a couple of hours. Economists expect the February figure to fall -0.6% m/m following a -0.8% m/m drop in January.

On the earnings front, notable companies such as Lululemon Athletica (LULU), DocuSign (DOCU), and Oklo (OKLO) 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 4.23%, up +0.05%.

The Euro Stoxx 50 Index is up +0.15% this morning as investors keep a close eye on developments in the Middle East while also awaiting this week’s central bank decisions. The conflict in the Middle East showed no signs of easing as Iran launched fresh attacks on critical infrastructure in the region. Utility stocks, typically viewed as defensive plays, outperformed on Tuesday. Energy stocks also gained ground, tracking higher crude oil prices. At the same time, oil-sensitive industrial stocks fell. Final data from the statistics agency ISTAT released on Tuesday showed that the Italian annual inflation rate rose slightly less than initially estimated in February. Separately, the ZEW economic research institute said that German investor morale cratered in March, marking the sharpest decline since February 2022 when the war in Ukraine began, amid soaring energy prices as the Middle East conflict continues. Meanwhile, investors remain focused on how officials from the Federal Reserve to the European Central Bank and the Bank of England will respond this week to mounting inflation concerns as oil prices climb amid the Middle East conflict. In corporate news, Springer Nature (SPG.D.DX) surged over +7% after the German publisher issued above-consensus 2026 guidance. Also, Sartorius AG (SRT3.D.DX) climbed more than +5% after the German laboratory products and services company outlined new midterm targets calling for revenue growth and improved profitability.

Italy’s CPI, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.

The Italian February CPI rose +0.7% m/m and +1.5% y/y, weaker than expectations of +0.8% m/m and +1.6% y/y.

The German March ZEW Economic Sentiment Index came in at -0.5, weaker than expectations of 39.0.

The Eurozone March ZEW Economic Sentiment Index arrived at -8.5, weaker than expectations of 26.5.

Asian stock markets today closed in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.85%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.09%.

China’s Shanghai Composite Index closed lower today as increasing tensions in the Middle East continued to unsettle investors. Energy stocks sank on Tuesday, even as oil prices climbed on renewed supply fears. Sentiment also weakened after U.S. President Donald Trump said he had asked China to postpone a summit with President Xi Jinping by about a month, saying it was important for him to stay in Washington to oversee the Iran war. Meanwhile, Daiwa analyst William Wu said on Tuesday that China’s property sector is likely to receive additional near-term support, as seasonal demand should enhance the impact of policy measures. In other news, Alibaba Group on Tuesday unveiled an AI platform for enterprises focused on automation, intensifying competition in China’s fast-growing AI agent market. In corporate news, Bright Smart Securities jumped over +46% in Hong Kong after Ant Group said it had secured regulatory approval to acquire a controlling stake in the company. Investor focus is now on the People’s Bank of China, which is set to announce the country’s benchmark lending rates later this week. DBS economists expect key lending rates to remain unchanged as policymakers gauge the January-February data to evaluate the impact of earlier easing measures.

Japan’s Nikkei 225 Stock Index gave up earlier gains and ended lower today as the Middle East conflict kept investors on edge. The Nikkei initially rose as much as 1.2%, tracking overnight gains on Wall Street. However, the benchmark index turned lower in the afternoon session as U.S. equity futures slid after oil prices resumed their climb. Losses in chip and metal stocks led the overall market lower on Tuesday. At the same time, energy, healthcare, and industrial stocks advanced. Japanese government bonds rose on Tuesday as a recent surge in yields attracted solid demand at an auction of 20-year sovereign debt. Meanwhile, top Japanese financial officials on Tuesday signaled their readiness to intervene amid heightened market volatility stemming from the Middle East conflict. Bank of Japan Governor Kazuo Ueda told parliament that the central bank will flexibly conduct bond-buying operations to rein in sharp rises in yields, while acknowledging that long-term interest rates should be set by market forces. Also, Finance Minister Satsuki Katayama vowed to take appropriate steps to counter excessive yen weakness. The Japanese currency continued to drift toward the 160-per-dollar level on Tuesday, reflecting investor concerns over the country’s heavy dependence on imported energy. Investors are awaiting Japan’s trade figures for February, scheduled for release on Wednesday. Attention will then shift to the BOJ’s monetary policy decision. The central bank is widely expected to keep its benchmark rate steady at 0.75% as it assesses the Middle East conflict’s impact on energy costs and supply chains. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -22.35% to 33.00.

Pre-Market U.S. Stock Movers

Most members of the Magnificent Seven stocks are edging lower in pre-market trading, with Alphabet (GOOGL) and Amazon.com (AMZN) falling about -0.5%.

Shares of cruise operators fell in pre-market trading on concerns that the climb in oil prices could push up fuel costs, with Carnival (CCL) and Royal Caribbean (RCL) dropping over -1%.

Eli Lilly and Company (LLY) slid more than -1% in pre-market trading after HSBC downgraded the stock to Reduce from Hold with a price target of $850.

Elbit Systems (ESLT) climbed more than +5% in pre-market trading after the defense contractor posted better-than-expected Q4 results.

Align Technology (ALGN) rose over +1% in pre-market trading after Barclays upgraded the stock to Overweight from Equal Weight with an unchanged price target of $200.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - March 17th

lululemon athletica (LULU), DocuSign (DOCU), Oklo (OKLO), HealthEquity (HQY), Academy Sports and Outdoors (ASO), Perpetua Resources (PPTA), Andersen Group (ANDG), NextNav (NN), Trevi Therapeutics (TRVI), Kestra Medical Technologies (KMTS), ProKidney (PROK), Energy Vault Holdings (NRGV), Citi Trends (CTRN), DiaMedica Therapeutics (DMAC), New Era Energy & Digital (NUAI), ClearPoint Neuro (CLPT), Lifeway Foods (LWAY), U.S. Gold (USAU), Abeona Therapeutics (ABEO), Security National Financial (SNFCA), Cibus (CBUS), Kolibri Global Energy (KGEI), Coda Octopus Group (CODA), CEA Industries (BNC), FreeCast (CAST), Silvercrest Asset Management Group (SAMG).