Morning in New York: geopolitical pressures are mounting

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The armed conflict in the Middle East, which continues for the fourth day, remains in the center of attention of the participants of the upcoming session. Reports of an attack on the American embassy in Riyadh and President Donald Trump's statement that the confrontation may last longer than previously outlined, increase the risk of a protracted scenario. Additional tension is created by publications about Iran's closure of the Strait of Hormuz and threats to ships traveling through this strategically important route, which increases the likelihood of disruptions in energy supplies.

Of macro publications, the Wards US auto sales statistics for February (consensus: 15.37 million SAAR, January: 14.85 million) will be of interest to assess the sustainability of consumer demand. This becomes especially important in the context of still high interest rates and increased inflationary risks due to higher energy prices. Better-than-forecast data will support auto stocks and related cyclical segments. Weaker-than-expected data will reinforce fears of a consumption slowdown.

The comments will be made by FRB New York Governor John Williams and his Minneapolis counterpart Neel Kashkari. Following the rise in Treasury yields and the price component in the ISM PMI, the market is particularly sensitive to signals regarding the trajectory of interest rates. Statements about the need to maintain tight monetary policy or delay the transition to monetary easing could increase pressure on rate-sensitive sectors.

Target (TGT), Sea Limited (SE), AutoZone (AZO), Best Buy (BBY), ON Holding (ONON), Viking Holdings (VIK) and Versant (VSNT) will report before the opening of the main session. CrowdStrike (CRWD), Ross Stores (ROST), GitLab (GTLB) and Box (BOX) will report quarterly results after the close of trading.

Futures on American stock indices demonstrate negative dynamics. We assess the balance of risks for the upcoming trading session as negative with increased volatility. From the technical point of view, S&P 500 remains under pressure: the key resistance is around 6900 points.

- MongoDB (MDB) shares tumbled about 27% before the start of main trading amid the release of a conservative first-quarter outlook. The company expects adjusted EPS in the range of $1.15-1.19 on revenue of $659-664 million, which was below market estimates and heightened concerns about slowing growth amid volatile corporate IT budgets. At the same time, the company's fourth-quarter results were solid.

- Plug Power (PLUG) is gaining more than 8% in the premarket as its adjusted loss for the latest reporting period came in below expectations and revenue beat consensus. Investors are positive on progress in cost control and confirmation of intentions to improve profitability in 2026.

- Shares of Asana (ASAN) are up about 2% before the opening, despite the restrained revenue forecast for the next quarter and year. Quotes are supported by exceeding expectations for the results of the fourth quarter and signs of stabilization of operating dynamics, which the market sees as a signal of transition to more sustainable growth.

- AST SpaceMobile (ASTS), which reported an increase in its loss year-on-year, lost about 3% in the premarket. Substantially exceeding revenue expectations gives investors hope for the rapid commercialization of the satellite platform, although the high capital intensity of the project remains a key risk factor.

- NRG Energy (NRG) quotations sagged by about 4% after the announcement of the sale of 12.3 million securities by large shareholder LS Power. The additional supply creates its short-term surplus, despite the announced $300 mln buyback program.

- Amazon Securities (AMZN) is losing about 2% after Amazon Web Services reported damage to two data centers in the UAE and a facility in Bahrain from drone strikes. According to AWS, the incident resulted in structural damage and power outages.

March 2 trading on American stock exchanges ended mostly in the plus, although the indices retreated from intraday highs. The S&P 500 added 0.04%, the Nasdaq 100 rose by 0.13%, the Dow Jones fell by 0.42%, the Russell 2000 rose by 0.9%.

Energy (XLE: +2%) led the gains as WTI crude oil rose 6.3% to close at its highest since June last year, although it retreated from overnight peaks. Consumer staples providers (XLP: -1.44%) were the outsiders. The technology sector was mixed, with Nvidia (NVDA: +2.99%) trading well above the broad market on the back of AI news, while semiconductor companies generally lagged.

Despite the remaining uncertainty, the decline in interest in risk assets was not particularly pronounced, which corresponds to the historical trend of rapid recovery of US equities after foreign policy shocks. At the same time, heightened fears of a new inflation spike led to an increase in Treasury yields: at the short end of the curve, they rose by 9-10 bps, and the MOVE volatility index hit its highest level since December.

Sentiment was further supported by macro data: the ISM manufacturing PMI for February came in at 52.4 points against a consensus of 51.5, the second consecutive reading in the expansion zone.

-Nvidia (NVDA) is investing $2 billion each in Coherent (COHR: +15.5%) and Lumentum Holdings (LITE: +11.8%), the former to develop and scale next-generation optical solutions for data centers and AI infrastructure, the latter to fund the expansion of production capacity and R&D in photonics.

- The acquisition of AES (AES: -17.8%) by a consortium led by Global Infrastructure Partners (a unit of BlackRock) and Swedish fund EQT at $15 per share was met with a selloff as the price offered was below the previous close.

- Sanctions from the Centers for Medicare and Medicaid Programs put pressure on Elevance Health's (ELV: -8.1%) securities. The regulator intends to suspend enrollment of new members in a number of Medicare Advantage plans effective March 31 due to non-compliance with reporting requirements.

-Norwegian Cruise Line (NCLH: -10.6%) beat earnings per share guidance, but its revenue was weak and its guidance for 2026 looks conservative. The company noted pressure on bookings and lower expected revenue per passenger-day, as well as the impact of higher fuel prices.

This article was AI-translated and verified by a human editor