Morning in New York: geopolitics swaying quotations

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

The foreign policy agenda remains the key driver for the upcoming session. The US sent Iran a list of proposals for conflict resolution. The media discuss the possibility of a truce for up to one month and high-level talks in the coming days. The news background remains contradictory: Tehran publicly denies the fact of direct dialog with Washington, although it signals its readiness to consider its proposals through mediators. Also, the authorities of the Islamic Republic theoretically agree to allow ships from non-hostile states to pass through the Strait of Hormuz, while discussing the possibility of introducing transit fees. At the same time, the U.S. is considering expanding its military presence in the region, which keeps the risk of escalation and heightened sensitivity of markets to news headlines.

Today, MBA mortgage applications data will be released (previous value: -10.9%), which will not have a significant impact on stock quotes. In the focus of attention will be the speech of the member of the Board of Governors of the Federal Reserve Board Steven Miran at the Digital Asset Summit. His comments on monetary policy or regulation may affect sentiment in certain segments of the market.

Futures on S&P 500 are trading in a steady plus. We assess the balance of risks for the upcoming session as neutral with increased volatility caused by the influence of news from the Middle East. At the opening we forecast a gap up: signs of possible de-escalation of the US-Iran conflict and correction in oil prices reduce inflation expectations.

- Shares of Braze (BRZE) reacted with a jump above 20% on the release of its financials for the last quarter and full year. The company's revenue rose 28% YoY in the three months under review and 24% for the year. Net retention reached 109%, reflecting the steady expansion of its customer base. BRZE was further supported by the announcement of a $100 mln buyback (including a $50 mln accelerated program) and signs of improved operating leverage.

- DigitalOcean (DOCN) stock is losing nearly 8% after announcing a $700 million share offering with a possible increase in the issue to $805 million. Despite plans to use the raised funds to expand its AI-powered data centers and reduce debt, investors are worried about the prospect of dilution of stakes and the uncertainty of the deal's final terms.

- KB Home (KBH) securities are correcting by more than 2% due to the publication of weak reports: the issuer's revenue fell 23% YoY to $1.08 billion, the output of homes on the market decreased by 14%, and the average selling price fell to $452 thousand. These dynamics indicate pressure from demand and price competition.

- Blaize Holdings (BZAI) rose nearly 50% on the back of a reported fourth-quarter revenue increase of up to 20 times year-over-year revenue to $23.8 million, driven by the expansion of commercial AI infrastructure projects, including cloud, sovereign AI and industrial segments, as well as the advancement of its proprietary AI platform.

- Shares of Robinhood (HOOD) are adding about 4% amid an announced buy back of up to $1.5 billion, more than $1.1 billion above the previous limit. The program, which starts this quarter, will run for about three years.

March 24 trading on American stock exchanges ended mostly in the negative. S&P 500 decreased by 0.37%, NASDAQ 100 fell by 0.77%, Dow Jones fell by 0.18% and only Russell 2000 added 0.45%.

During the session, benchmarks moved from positive to negative territory, reacting to contradictory news about the conflict with Iran and ways of its diplomatic resolution. The optimism that prevailed during the previous session gradually weakened, and by the close the indices had moved away from the highs of the day. They were pressured by sell-offs in shares of high-tech giants, including Alphabet (GOOGL: -3.85% at the close of March 24), and software developers, primarily Microsoft (MSFT: -2.68%), due to a new surge of nervousness about the prospects of AI.

The energy sector (XLE: +2.03%) was the leader of growth in the broad market with the support of oil quotations (WTI: +4.8%, Brent: +4.4%). Telecoms (XLC: -1.40%) were the outsiders.

The S&P Global Services PMI for March declined to 51.1 from February's 51.7, with a consensus of 52, while manufacturing unexpectedly rose to 52.4 against the market average of 51.5. Nonfarm labor productivity for the fourth quarter rose 1.8% in the final estimate, matching consensus. Unit labor costs rose 4.4%, compared to a forecast of 3.6%, signaling continued inflationary pressures. Against this backdrop, Treasury yields rose, and especially noticeably at the short end of the curve. An additional negative for the debt market was a weak auction for placement of two-year treasuries, which was held with a "tail" of 1.8 bp.

- Estée Lauder (EL: -9.9% at the close of trading on March 24) confirms takeover talks for Spain's Puig.

- The Financial Times reported on possible interest in buying Jefferies Financial Group (JEF: +2.5%) from Japan's SMFG. However, the growth of JEF shares was restrained due to the uncertainty of terms and conditions of the deal.

- Smithfield Foods (SFD: +4.3%) beat expectations on key metrics and raised its dividend by 25%. The company's own operating profit forecast for FY 2026 was above consensus despite the risks of higher costs.

- Core & Main (CNM: +4.5%) reported in line with average market benchmarks. Although its management pointed to unfavorable situation in key categories of goods and services and presented a rather cautious guide, the investment community positively perceived the stability of underlying demand.

- The collapse in Circle Internet (CRCL: -20.1%) quotes was triggered by reports that an updated version of the Digital Asset Market Clarity Act will soon be agreed upon. According to CoinDesk, the new rules could limit the payment of revenue from stablecoins.

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