U.S. stock futures for the three major indices advanced in pre-market trading on Tuesday, March 31. At the time of writing, Dow Jones futures were up 1.01%, S&P 500 futures gained 0.98%, and Nasdaq futures rose 0.94%.
European markets also saw gains. Germany's DAX index increased by 1.15%, the UK's FTSE 100 was up 0.93%, France's CAC 40 rose 0.59%, and the Euro Stoxx 50 climbed 0.66%.
In commodity markets, WTI crude oil edged up 0.12% to $103.00 per barrel, while Brent crude fell 0.16% to $107.22 per barrel.
**Market News** Former President Donald Trump expressed willingness to end military action against Iran even if the Strait of Hormuz remains largely closed. According to reports, Trump communicated to his advisors that he is open to de-escalation despite the strategic waterway's status. U.S. government officials indicated that recent assessments concluded a military effort to forcibly reopen the strait would extend beyond Trump's initial four-to-six-week timeline. Consequently, Trump decided the U.S. should prioritize its main objective of degrading Iran's naval capabilities and missile stockpiles while gradually reducing hostilities and using diplomatic pressure to restore shipping through the strait. Officials stated that if these efforts fail, the U.S. would urge its European and Gulf allies to lead the reopening initiative. They added that while military action remains an option, it is not the current priority.
Separately, reports suggest some Gulf nations, including the United Arab Emirates and Saudi Arabia, favor continued U.S. military engagement against Iran. The UAE is reportedly strongly advocating for U.S. ground operations, with support from Kuwait and Bahrain.
**Walmart Signals Recession Alarm at 2008 Crisis Levels** A key indicator tied to Walmart stock is flashing a severe warning about the U.S. economy. The Walmart Recession Signal, which compares the retailer's stock performance (up 10.9% year-to-date) against the S&P Global Luxury Index (down 14.8% YTD), has surged to levels near its peak during the 2008-09 financial crisis. Strategist Jim Paulsen, who tracks the indicator, noted that a sharp rise in the WRS has historically preceded economic recessions or significant slowdowns. He stated, "The shift in retail spending towards discount stores, as shown by the WRS, suggests increasing caution about the U.S. economy and potential pressure on middle- and low-income consumers." Paulsen added, "While I still expect the economy to avoid a recession this year, I am increasingly convinced that a serious slowdown is underway, which may eventually require additional policy easing and interest rate cuts to counteract."
**"Growth Fears" Overtake "Inflation Anxiety," Reigniting Fed Rate Cut Bets** Market focus has shifted towards concerns that the Iran conflict could exacerbate an economic slowdown, leading traders to abandon bets on Federal Reserve rate hikes. Earlier last week, futures markets had fully priced in one rate hike by year-end, but by Monday, sentiment reversed sharply, with traders assigning a 20% probability of a rate cut by the December meeting. In a speech at Harvard University, Fed Chair Jerome Powell stated that the central bank has limited tools to address supply-side shocks, such as the oil price surge triggered by the U.S.-Iran conflict. This remark alleviated fears of aggressive monetary tightening to combat inflation and prompted markets to begin pricing in potential rate cuts later this year, albeit with low probability.
**Goldman Sachs Bullish on Gold: Fed Cuts and Central Bank Buying Could Drive Prices to $5400** Despite recent sell-offs, Goldman Sachs maintains a bullish outlook on gold, forecasting a resumption of the rally by the end of 2026. Analysts Rina Thomas and Dan Struven noted in a report that gold's medium-term prospects remain solid, with prices potentially reaching $5,400 per ounce, supported by ongoing central bank purchases and expected Fed rate cuts later this year. They acknowledged short-term "tactical downside risks," including a potential drop to $3,800 per ounce if energy supply shocks worsen. However, they emphasized significant upside potential if the Iran conflict accelerates a global shift away from traditional Western assets.
**FGE Warns: Oil Could Hit $200 if Strait of Hormuz Closure Persists** Energy consultancy FGE NexantECA warned that oil prices could surge to $150 or $200 per barrel if the near-closure of the Strait of Hormuz persists for six to eight weeks due to the Iran conflict. Fereidun Fesharaki, Honorary Chairman at FGE, stated in an interview, "With 100 million barrels of oil unable to flow weekly, and 400 million monthly, the market impact would be astronomical over time." He noted that verbal interventions, including Trump's recent comments, have had little effect, and the reality of supply disruptions will ultimately drive prices higher.
**U.S. Gasoline Prices Surpass $4 per Gallon for First Time Since 2022, Marking 35% Surge in Over a Month** The national average price for regular unleaded gasoline in the U.S. has risen above $4 per gallon for the first time since August 2022, driven by soaring fuel costs due to the Middle East conflict. Data from AAA showed the average price reached $4.018 per gallon on Monday. Since February 28, the day before the U.S., Israel, and Iran initiated military actions, gasoline prices have surged by over $1—a 35% increase from the pre-conflict average of $2.98 per gallon. This rise matches some of the sharpest increases seen over the past two decades and has occurred even faster than the initial spike following the outbreak of the Russia-Ukraine war in 2022.
**Individual Stock News** Microsoft plans to invest $1 billion in Thailand over the next two years to bolster cloud computing and AI infrastructure. The Thai government announced the investment, which will also include efforts to enhance the digital skills of the local workforce. This move follows several recent data center investments aimed at supporting AI growth in Southeast Asia's second-largest economy.
Cloud services provider Nebius is expanding its European footprint with a new AI data center in Lappeenranta, Finland. The facility, with a capacity of up to 310 megawatts, is valued at over $10 billion and is expected to become one of Europe's largest data centers upon completion. Initial services are projected to begin in 2027. Nebius shares were up over 3% in pre-market trading.
Unilever is in advanced talks to sell most of its food business to McCormick for $15.7 billion in cash and stock. The deal, which excludes certain entities like those in India, would be the largest in history for both companies. Unilever and its shareholders would own 65% of the combined entity. The transaction aims to transform Unilever into a leader in beauty, personal care, and home care, while establishing McCormick as a global giant in spices, seasonings, and sauces. McCormick shares rose over 3% pre-market.
Virgin Galactic reported a 17% narrower net loss for its fiscal fourth quarter, with a loss of $63 million compared to $76 million a year earlier. Revenue was $312,000, below analyst estimates, due to a pause in commercial flights following the retirement of its VSS Unity spacecraft. The company announced it is raising the price of a single spaceflight ticket to $750,000, an increase of approximately $100,000, as it aims to achieve positive cash flow by 2027 with its new Delta-class spacecraft. CEO Michael Colglazier confirmed that production of the first Delta vehicle is nearly complete, with critical ground testing scheduled to begin in April 2026. Virgin Galactic shares surged over 9% pre-market.
**Upcoming Economic Data and Events** - 22:00 Beijing Time: U.S. CB Consumer Confidence Index for March - 22:00 Beijing Time: U.S. JOLTs Job Openings for February - 01:10 Beijing Time (Next Day): Speech by 2028 FOMC Voter and Kansas City Fed President Schmid on Monetary Policy and Economic Outlook - 03:00 Beijing Time (Next Day): Fed Governor Barr Speaks on Stablecoins - 03:10 Beijing Time (Next Day): Fed Governor Bowman Speaks at CBA Live 2026 Event
**Earnings Preview** - Wednesday Pre-Market: Nike
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