Stock Index Futures Jump as Hopes for End to Middle East Conflict Boost Sentiment

June S&P 500 E-Mini futures (ESM26) are up +0.80%, and June Nasdaq 100 E-Mini futures (NQM26) are up +1.01% this morning as oil prices slumped after the Trump administration intensified efforts to end the Middle East conflict.

Sentiment improved on Wednesday after multiple reports indicated that the U.S. sent Iran a 15-point plan to end the war, delivered by Pakistan and largely based on previous Trump administration demands of Tehran. Also, the Wall Street Journal reported that mediators from Turkey, Egypt, and Pakistan are working to arrange a meeting between U.S. and Iranian officials within the next 48 hours. Earlier, Israel’s Channel 12 reported that Washington was pursuing a one-month ceasefire. The price of WTI crude slumped over -5% on Wednesday, while Treasury yields fell across the curve, with the ten-year rate sliding three basis points to 4.34%.

Even as reports pointed to a possible de-escalation, the conflict continued to rage. Iran continued its attacks on neighboring states, and several officials indicated that the Islamic Republic is not ready to negotiate.

In yesterday’s trading session, Wall Street’s major indexes ended in the red. Software stocks sank, with Atlassian (TEAM) slumping over -8% and Salesforce (CRM) sliding more than -6% to lead losers in the Dow. Also, cryptocurrency-exposed stocks tumbled as the revised crypto market structure bill in the Senate would reportedly prohibit rewards on stablecoin balances, with Circle Internet Group (CRCL) plummeting over -20% and Coinbase Global (COIN) plunging more than -9%. In addition, Estee Lauder (EL) slumped over -9% and was among the top percentage losers on the S&P 500 after the beauty company confirmed it was in talks to acquire Puig Brands. On the bullish side, chip and AI-infrastructure stocks advanced, with Seagate Technology Holdings (STX) rising over +5% to lead gainers in the Nasdaq 100 and KLA Corp. (KLAC) gaining more than +3%.

Economic data released on Tuesday showed that the U.S. S&P Global manufacturing PMI unexpectedly rose to 52.4 in March, stronger than expectations of 51.5, while the S&P Global services PMI unexpectedly fell to 51.1, weaker than expectations of 52.0. Also, U.S. Q4 nonfarm productivity was revised lower to +1.8% q/q, weaker than expectations of +1.9% q/q, while unit labor costs were revised upward to +4.4% q/q, stronger than expectations of +3.6% q/q. In addition, the U.S. Richmond Fed manufacturing index rose to a 13-month high of 0 in March, stronger than expectations of -8.

Fed Governor Michael Barr said on Tuesday that policymakers may need to hold interest rates steady for “some time” to tackle inflation that remains notably above the central bank’s 2% target. “While I am hopeful that inflation will fall as the effects of tariffs on prices wane later this year, I would like to see evidence that goods and services price inflation is sustainably retreating before considering reducing the policy rate further, provided labor market conditions remain stable,” Barr said. He noted that the situation in the Middle East poses “additional risks.” Also, Chicago Fed President Austan Goolsbee said officials need to see inflation make progress toward easing to justify cutting interest rates this year, but near-term prospects are unfavorable due to higher energy prices stemming from the Middle East conflict.

Meanwhile, U.S. rate futures have priced in a 95.9% chance of no rate change and a 4.1% chance of a 25 basis point rate hike at the April FOMC meeting.

Today, investors will focus on the U.S. Import and Export Price Indexes, set to be released in a couple of hours. Economists expect the import price index to rise +0.6% m/m and the export price index to rise +0.5% m/m in February, compared to the previous figures of +0.2% m/m and +0.6% m/m, respectively.

The EIA’s weekly crude oil inventories report will also be released today. Economists expect this figure to be -1.3 million barrels, compared to last week’s value of 6.2 million barrels.

In addition, market participants will be looking toward a speech from Fed Governor Stephen Miran.

On the earnings front, notable companies such as Cintas (CTAS), Paychex (PAYX), and Chewy (CHWY) 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 4.34%, down -0.73%.

The Euro Stoxx 50 Index is up +1.47% this morning on optimism about a potential resolution to the Middle East conflict. Travel, financial, industrial, and technology stocks outperformed on Wednesday. A survey released on Wednesday showed that German business morale plunged in March as the Middle East conflict caused companies to become more pessimistic about the outlook. “The war in Iran has put any hope of a recovery on ice for the time being,” said Ifo President Clemens Fuest. Separately, data showed that the U.K.’s annual inflation rate held steady at 3.0% in February, but is expected to increase in the coming months as energy and food prices climbed amid the Middle East conflict. Meanwhile, Eurozone government bond yields fell on Wednesday as concerns over an oil-fueled inflation shock eased. European Central Bank President Christine Lagarde said on Wednesday that the central bank would need to act decisively if inflation risked climbing significantly above its target for an extended period as a result of the Middle East conflict. Still, Lagarde said the ECB could look past a limited, short-lived shock. In corporate news, Grifols SA (GRF.E.DX) rose over +2% after the Spanish drugmaker announced that its board had approved a U.S. initial public offering of its U.S. biopharma unit.

U.K. CPI, U.K. Core CPI, and Germany’s Ifo Business Climate Index were released today.

U.K. February CPI rose +0.4% m/m and +3.0% y/y, in line with expectations.

U.K. February Core CPI rose +0.6% m/m and +3.2% y/y, stronger than expectations of +0.5% m/m and +3.1% y/y.

The German March Ifo Business Climate Index came in at 86.4, stronger than expectations of 86.2.

Asian stock markets today settled in the green. China’s Shanghai Composite Index (SHCOMP) closed up +1.30%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +2.87%.

China’s Shanghai Composite Index closed higher today, joining a broader regional rally as investors welcomed U.S. diplomatic efforts to end the Middle East conflict. Global sentiment improved after reports indicated that the U.S. had sent Iran a 15-point plan to end the conflict. Gold-related stocks were among the biggest gainers on Wednesday as the price of the yellow metal rose for a second consecutive day. Also, AI-related stocks jumped after state media underscored a sharp rise in domestic AI model adoption and a spike in token usage they generate. In addition, shares of food-delivery companies rallied as authorities intensified efforts to curb the fierce competition in the sector that has eroded profits. At the same time, energy stocks slumped as oil prices fell. The benchmark index reclaimed the key 3,900 level. Meanwhile, Chinese Vice Premier Ding Xuexiang said on Wednesday that the country will speed up efforts to achieve self-reliance and strength in science and technology while broadening research to address issues, including climate change and energy security. In corporate news, Pop Mart plummeted over -22% in Hong Kong as the toy maker reported annual revenue growth that remained heavily dependent on Labubu sales, disappointing investors who had hoped other franchises would help sustain its success. Investor attention this week is on China’s industrial profit data for the January-February period and whether it is consistent with stronger-than-expected activity data released earlier this month. “Markets will watch for any improvement from the sluggish 0.6% year-on-year growth rate in 2025,” ING economists said. 

Japan’s Nikkei 225 Stock Index closed sharply higher today as sentiment got a boost after oil prices fell on hopes for a resolution to the Middle East conflict. Israeli media reported that Washington was pursuing a one-month ceasefire to facilitate negotiations, while the New York Times reported that the U.S. had sent Iran a 15-point plan to end the conflict. The Japanese market is highly sensitive to oil price swings, which directly impact the nation’s economy and corporate earnings. Nomura Securities strategist Wataru Akiyama noted that the sharp drop in crude oil prices on Wednesday appears to be the main catalyst behind the Nikkei’s jump. Gains were broad-based on Wednesday, with financial, utility, and technology stocks leading the rally. Benchmark Japanese bonds also rose as the prospect of easing tensions in Iran helped ease concerns about inflation. Meanwhile, minutes from the Bank of Japan’s January meeting released on Wednesday showed that many policymakers saw the need to continue raising interest rates, with some urging timely action in response to mounting inflationary pressures. Officials also urged greater vigilance over the weak yen’s impact on inflation, which they viewed as becoming more pronounced than in the past as companies increasingly passed on higher import and labor costs. “Given that addressing rising prices was an urgent priority in Japan, the BOJ should not take too much time examining the impact of past rate hikes, and should proceed with the next rate increase without missing the appropriate timing,” one member said. Sony Financial economist Masaaki Kanno said the BOJ could raise interest rates by 25 basis points each in June and December, with the possibility that the June hike could be brought forward to April. In corporate news, SoftBank Group surged over +7% after its unit Arm Holdings unveiled plans to sell its own central processing unit for AI data centers. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +3.60% to 37.66.

Pre-Market U.S. Stock Movers

The Magnificent Seven stocks advanced in pre-market trading, with Tesla (TSLA) and Nvidia (NVDA) rising over +1%.

Chip stocks climbed in pre-market trading, with Marvell Technology (MRVL) gaining about +3% and Applied Materials (AMAT) advancing more than +1%.

Arm Holdings (ARM) surged +13% in pre-market trading on plans to generate roughly $15 billion annually from chip sales within five years.

Mining stocks rose in pre-market trading as metal prices rallied, with Newmont (NEM) climbing over +4% and Freeport-McMoRan (FCX) gaining more than +3%.

KB Home (KBH) fell over -2% in pre-market trading after the homebuilder posted downbeat FQ1 results and gave soft 2026 deliveries guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - March 25th

Cintas (CTAS), Paychex (PAYX), Chewy (CHWY), Jefferies Financial Group (JEF), H.B. Fuller Company (FUL), Navan (NAVN), Enerpac Tool Group (EPAC), Worthington Steel (WS), MillerKnoll (MLKN), Winnebago Industries (WGO), Cognyte Software (CGNT), BTQ Technologies (BTQ), ioneer (IONR).