The broader picture is hard to dress up: March has been brutal. The S&P 500 and the Dow are on track for their biggest monthly decline since September 2022. The S&P is also staring at its worst quarter since 2022. Last week, the Dow and the Nasdaq confirmed corrections by finishing more than 10% below their record highs. The small-cap Russell 2000 got there earlier. The energy sector is the only major part of the market set to finish March in positive territory, up more than 11%, for obvious reasons.

Oil tells the story most clearly: prices have swung wildly, but they are still headed for a record monthly gain. Brent is hovering near $114 a barrel, and gasoline in the United States has climbed above the politically radioactive level of $4 a gallon. A prolonged disruption could feed higher costs into the broader economy, tighten financial conditions, and weaken growth. Even a partial de-escalation is unlikely to snap supply routes back into place. The market for crude remains tight and shipping risks remain real. There are still attacks on vessels, missile strikes threatening key routes, and wider concerns around supply chains that reach well beyond oil. Aluminum is higher because Gulf smelters are under threat, while Helium is under pressure because Qatar's gas exports have been disrupted.

Fed head Jerome Powell said Monday that the central bank can afford to wait and assess the impact of the war. He is right, and also trapped by circumstance. Central banks do not have a special lever labeled "make the Strait of Hormuz normal again."

Trump's statements continue to be erratic: he has alternated between threatening Iran's infrastructure and signaling he is open to ending the conflict without fully reopening the strait. Israeli Prime Minister Benjamin Netanyahu says the war is more than halfway complete in terms of goals, though not in time. Yet the market also seems to believe that Trump, whatever his rhetoric, understands the political cost of a long war combined with high gas prices and falling stocks. That may be the strongest case for a near-term ceasefire.

Tuesday's session will likely reflect that uneasy bargain. Futures were up in early trading, with the Dow, S&P, and Nasdaq all pointing higher. The dollar eased after hitting a 10-month high. Treasury yields slipped as growth concerns gained traction, while VIX, the fear-index, remained above 30. Asia sent a similarly nervous message: Japan fell, Taiwan and South Korea dropped sharply as AI-related stocks weakened, China and Hong Kong edged lower, and Australia managed a small gain. China's stronger-than-expected manufacturing data offered one rare point of steadiness, though Beijing still seems content to watch the American entanglement from a careful distance.

In corporate news, McCormick jumped on talks with Unilever to create a $60 billion food giant. Microsoft rose after announcing a more than $1 billion investment in cloud and AI infrastructure in Thailand. Constellation Energy slipped after a weak profit forecast. Nike is due to report.

Today's economic highlights:

Today's schedule includes: the RBA meeting minutes in Australia; the NBS Manufacturing and Non-Manufacturing PMI in China; housing starts in Japan; in the United Kingdom, the Nationwide Housing Prices MoM and YoY along with the current account; in Germany, retail sales MoM and YoY followed by unemployment figures; in France, preliminary inflation rates YoY and MoM; in the Euro Area, flash inflation rates YoY and MoM; in Italy, preliminary inflation rates YoY and MoM; in Canada, preliminary GDP MoM; in the United States, the S&P/Case-Shiller Home Price YoY, Chicago PMI, JOLTs job openings, CB consumer confidence, and Fed speeches by Goolsbee and Barr, as well as the API crude oil stock change. See the full calendar here.

  • Dollar index:
  • Gold: $4,588
  • Crude Oil (BRENT): $107.35 (WTI) $102.79
  • United States 10 years: 4.32%
  • BITCOIN: $66,780

In corporate news:

  • Nebius Group said it will build a 310-MW AI data center in Lappeenranta, Finland, in a project valued at more than $10 billion and forming part of its broader European expansion.
  • Saronic Technologies raised $1.75 billion in a funding round that lifted its valuation to $9.25 billion, with the cash set to expand autonomous shipbuilding capacity in the U.S.
  • Blackstone sold Fidere’s Spanish residential portfolio of about 5,000 homes to Brookfield Asset Management for a gross €1.2 billion.
  • Microsoft plans to invest more than $1 billion in Thailand between 2026 and 2028 to expand cloud and AI infrastructure, cybersecurity, and digital skills.
  • Eli Lilly is seeking regular NHS drug price increases and the rollback of the UK rebate scheme as a condition for renewing investment in Britain.
  • Australia threatened legal action against Meta, Google, Snapchat, TikTok and YouTube over alleged failures to enforce the country’s under-16 social media ban.
  • Marriott International and the Leali family formed a joint venture to expand the luxury wellness brand Lefay globally.
  • Realty Income priced an $800 million senior unsecured notes offering due 2033 and said proceeds will support general corporate purposes including debt repayment and acquisitions.
  • Unilever is in advanced talks to combine its food business with McCormick in a deal involving cash and mostly McCormick stock.
  • JD.com plans to issue offshore yuan-denominated senior unsecured notes to refinance debt and fund general corporate purposes.
  • Galapagos and Gilead signed a binding agreement tied to the acquisition of Ouro Medicines and a collaboration on autoimmune disease treatments.
  • BlackRock is considering HSBC’s Canary Wharf tower as a possible new London headquarters.
  • Gas producers including Shell, Chevron and Santos warned Australia against imposing a windfall tax on LNG exports, saying it would hurt investment and energy security.
  • S&P Global Visible Alpha warned that Big Tech’s planned $635 billion AI spending could face pressure if persistently high energy prices force capex cuts.
  • INOX Air Products is preparing a $1 billion IPO in India and has appointed banks to manage the offering, according to Reuters sources.
  • Union workers at Exxon Mobil’s Baton Rouge refining and chemical complex approved a new four-year labor contract, according to sources.
  • Shares in Northern Star Resources and Newmont rose after gold prices increased following comments from Federal Reserve Chair Jerome Powell.
  • Merck & Co's cholesterol treatment met its primary endpoint in a head-to-head trial.
  • Chevron has reported major storm damage at its Wheatstone LNG site in Australia.
  • Meta is trialling a premium subscription service on Instagram, according to TechCrunch.
  • Apollo is reportedly set to acquire Atlantic Aviation from KKR for $10 billion.
  • SpaceX is considering excluding Robinhood and SoFi from its IPO as the brokers negotiate their stake, Reuters has learnt.

Analyst Recommendations:

  • Ge Aerospace: Daiwa Securities initiates coverage with a neutral rating and a target price of USD 301.
  • Alaska Air Group, Inc.: Raymond James maintains its outperform rating and reduces the target price from USD 70 to USD 50.
  • American Airlines Group Inc.: BMO Capital Markets maintains its market perform recommendation and reduces the target price from USD 17 to USD 12.
  • Aptiv Plc: RBC Capital maintains its outperform rating and reduces the target price from USD 104 to USD 81.
  • Carnival Corporation: Wolfe Research maintains its outperform rating and reduces the target price from USD 38 to USD 29.
  • Ovintiv Inc.: National Bank Financial maintains its outperform recommendation and raises the target price from USD 58 to USD 80.
  • Ryan Specialty Holdings, Inc.: Jefferies maintains its hold recommendation and reduces the target price from USD 50 to USD 36.
  • Southwest Airlines Co.: BMO Capital Markets maintains its outperform recommendation and reduces the target price from USD 57.50 to USD 45.