IEA planning largest ever oil reserve release

U.S. equity markets finished largely unchanged on Tuesday as investors balanced easing oil prices with continued geopolitical uncertainty in the Middle East. The S&P 500 declined by 0.2 percent to 6,781.48, while the Nasdaq Composite was broadly flat at 22,697.10 and the Dow Jones Industrial Average slipped slightly to 47,706.51. Most sectors ended lower, with energy, utilities and health care leading the declines, while technology and communication services provided some support. Oil markets remained volatile as the conflict involving Iran entered its eleventh day, although prices retreated after President Trump suggested the war could be nearing an end. West Texas Intermediate crude settled near 87 dollars per barrel after earlier trading above 100 dollars, helping stabilise broader risk sentiment. At the same time, bond yields edged higher, with the ten year United States Treasury yield closing around 4.15 percent.

Global markets showed a more positive tone, particularly in Asia, where equities rallied on optimism that the conflict may soon ease. Japan’s Nikkei index rose nearly 3 percent and Korea’s KOSPI gained more than 5 percent, while European markets also traded higher as oil prices pulled back. In the United States, the technology sector remained a relative bright spot this month, supported by a rebound in software companies. Investors are now turning their attention to upcoming inflation data, with the consumer price index due shortly and the personal consumption expenditures measure later in the week. Expectations for interest rate cuts from the Federal Reserve have moderated following the recent surge in energy prices, though policymakers are still expected to maintain a gradual easing bias if inflation pressures remain contained.

Latest market and economic update

• Asian equity markets rose modestly on Wednesday as oil prices retreated from recent highs, easing some pressure on investor sentiment. Japan’s Nikkei 225 gained over 2 percent and South Korea’s KOSPI advanced nearly 4 percent. Elsewhere, markets were mixed as investors remained cautious ahead of United States inflation data and ongoing geopolitical tensions.

• U.S. equity futures edged higher overnight, with S&P 500 and Nasdaq 100 futures rising about 0.3 percent and Dow Jones futures gaining 0.2 percent. In afterhours trading, Oracle shares gained almost 9 percent following stronger than expected quarterly revenue and earnings. Investors are awaiting the February consumer price index on Wednesday for guidance on Federal Reserve policy.

• European shares surged to their largest one-day gain since April 2025, with the STOXX 600 up 1.9% as optimism grew over a potential end to the U.S.-Israeli war on Iran. Banks led the rally, up 3.6%, while industrials and travel stocks rose. HSBC, Santander and Volkswagen were notable performers amid corporate earnings updates.

• The dollar held near 99 on Wednesday, supported by safe-haven demand amid Middle East tensions. President Trump signalled the Iran conflict could end soon, but Iranian forces dismissed this, warning the blockade would continue. The euro traded at 1.1635 versus the dollar, reflecting the greenback’s strength amid ongoing geopolitical uncertainty and risk aversion.

• Oil prices edged lower in early Asian trading after reports that the International Energy Agency is considering its largest ever emergency reserve release to stabilise markets amid the Iran conflict. Brent fell to about 87 dollars per barrel and WTI to around 82 dollars, as the proposed release could exceed the 182 million barrels deployed in 2022.

• Iran has begun laying mines in the Strait of Hormuz, a crucial shipping lane carrying about one fifth of global oil, raising significant risks to maritime transit. The Islamic Revolutionary Guard Corps controls the strait, and President Trump warned of severe military consequences, reporting that U.S. forces had destroyed ten inactive mine-laying vessels.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

• Oracle reported stronger-than-expected quarterly revenue of $17.19 billion and raised its fiscal 2027 revenue forecast to $90 billion, driven by AI data centre contracts. Remaining performance obligations grew 325 percent, reflecting large-scale AI deals. The company expects cloud margins to improve and anticipates continued strong demand for AI and software-as-a-service products.

• Boeing said first-quarter deliveries of 737 MAX jets may face delays due to wiring scratches from a machining error, though production continues at 42 jets per month. All in-service aircraft remain safe. The company plans to raise output to 47 jets monthly, open a fourth assembly line, and aims to deliver about 500 jets this year.

• Bank of America reported a first-quarter net interest income increase of at least 7 percent year on year. Wealth management fees rose by double digits, investment banking revenue grew 10 percent, and markets revenue saw low double-digit gains. Consumer spending on entertainment and travel was higher than the previous year, according to co-president Athanasia.

• Citigroup CEO Jane Fraser said investment banking and markets fees are tracking mid-teens percentage growth year on year in Q1, expressing confidence in achieving a 10–11% return on tangible common equity by 2026. She described the global economy as "just fine," noted hedge fund losses, and warned a Trump-era credit card cap would limit credit access.

• Volkswagen faces a challenging year as tariffs, weak China sales, and Middle East tensions weigh on profits. Operating profit halved to €8.9 billion in 2025, with a modest 4–5.5% margin forecast for 2026. Revenue is expected to grow 0–3%. The group plans major cost cuts, including 50,000 German job reductions, while Porsche’s profit collapsed 98%.

• Renault aims to sell half of its brand cars overseas by 2030, boosting volumes 23% to over two million annually under its five-year "futuREady" strategy. The plan includes 36 new models, 16 electric, cost reductions for EVs and hybrids, and partnerships with Geely to expand into India, South America, and South Korea amid rising global competition.

• Robinhood Markets’ banking unit has surpassed $1 billion in deposits from 65,000 funded customers since its November launch, CEO Vlad Tenev said. The move represents the company’s second attempt at banking as it seeks to expand beyond trading. Services are offered through Coastal Community Bank, alongside a new high-tier credit card and other account options.

• SpaceX is reportedly leaning toward a Nasdaq listing for what could become the largest initial public offering ever, targeting a $1.75 trillion valuation. The company seeks early inclusion in the Nasdaq 100 index, benefiting from deeper institutional investor access and liquidity. The NYSE remains a competitor, and the IPO could occur as early as June.

• Salesforce Inc. plans to raise up to $25 billion through debt sales to fund its $50 billion share buyback programme, Bloomberg reported, citing sources. The company is targeting at least $20 billion in a US bond offering, which could be executed as soon as this week, though timing may change. It also announced a 5.8% dividend increase.

• Morgan Stanley reported that only three crude and refined product tankers exited the Strait of Hormuz on Tuesday, compared with around 35 normally, signalling severe disruption to oil flows. Tanker rates slipped slightly but remain close to historic highs as the Iran conflict continues to unsettle global energy markets and shipping activity.

• HSBC upgraded equities to maximum overweight, citing potential progress toward ending the Iran war as a market turning point. It sees easing fear signals and recommends buying assets hit hardest by the conflict, favouring Asia and Europe. The bank also prefers gilts and European non-core bonds, while remaining heavily overweight emerging-market debt.

• Goldman Sachs warns that the Middle East conflict and surging energy prices have shifted markets from a “Goldilocks” scenario to heightened risk. Oil and gas shocks could slow global growth and lift inflation, prompting tactical moves to neutral equities and overweight cash. Defensive equities may outperform, but volatility remains, with potential for both pullbacks and rebounds.

• Deutsche Bank upgraded U.S. and European technology sectors to "neutral" from "underweight" and software to "overweight," saying the AI-driven selloff has likely ended. Earnings remain resilient, with no major company expecting revenue declines from AI in 2026. The bank also sees opportunities in Germany’s industrial and construction materials sectors amid fiscal support.

• Wolfe analysts say Amazon.com’s cloud business, Amazon Web Services, could exceed expectations, driven by AI demand and expanding capacity. They forecast 30% annual revenue growth over three years, supported by partnerships with Anthropic and OpenAI. Heavy data centre investment may weigh on near-term cash flow, but returns are expected to improve from 2027.

• TD Cowen reiterated a Buy rating on ASML Holding with a €1,500 price target, naming it its top European idea for 2026. The firm cited ASML’s monopoly in extreme ultraviolet lithography technology, which underpins advanced chip production and AI development, supporting its long-term growth outlook despite premium valuation.

• BofA Securities reiterated a Buy rating on Caterpillar with an $825 price target, implying about 14% upside from current levels. The firm highlighted strong turbine demand and capital spending in energy infrastructure, saying Caterpillar’s high-margin turbine unit remains underappreciated and could support longer-term earnings growth.

• Morgan Stanley upgraded CrowdStrike to Overweight from Equalweight and raised its price target to $510. The bank cited AI-driven growth, strong demand for its Falcon platform and expanding endpoint market share. It named the stock a Top Pick, saying clearer positioning versus consolidating cybersecurity peers could support further gains.

Upcoming data and events

Today, key U.S. economic data includes February consumer price index and inflation figures, 10-year Treasury note auction, February budget statement, and weekly MBA mortgage indices. Energy inventories are also released by the EIA. Corporate earnings include annual results from Inditex, Rheinmetall, Deutsche Börse, and Porsche.