March S&P 500 E-Mini futures (ESH26) are trending down -0.40% this morning as oil prices continued to rise amid waning hopes of de-escalation in the Middle East conflict.

Sentiment took a hit on Friday after Axios reported that the U.S. is weighing plans to take over Iran’s Kharg Island, the Islamic Republic’s key oil-export hub, to pressure Tehran into reopening the Strait of Hormuz.

The Middle East conflict has entered its 21st day with no end in sight. Iran continued its attacks on neighboring states even after Israel indicated it would refrain from striking Tehran’s energy infrastructure. The price of Brent crude climbed over +2% on Friday, while the price of WTI crude rose about +0.70%. Treasury yields rose across the curve, with the ten-year rate jumping five basis points to 4.31%.

Market participants are also bracing for an unusually large tally of options expiring today.

In yesterday’s trading session, Wall Street’s major indices ended in the red. The Magnificent Seven stocks fell, with Tesla (TSLA) sliding over -3% and Meta Platforms (META) dropping more than -1%. Also, mining stocks sank as metal prices fell, with Newmont Mining (NEM) slumping over -6% and Coeur Mining (CDE) tumbling more than -5%. In addition, Micron Technology (MU) slid over -3% and was the top percentage loser on the Nasdaq 100 after the chipmaker cautioned that it will need to ramp up spending on production to meet surging demand, overshadowing upbeat FQ2 results and FQ3 guidance. On the bullish side, Five Below (FIVE) surged more than +10% after the discount store chain posted upbeat Q4 results and issued strong Q1 guidance.

The Labor Department’s report on Thursday showed that the number of Americans filing for initial jobless claims in the past week unexpectedly fell -8K to a 9-week low of 205K, compared with the 215K expected. Also, the U.S. Philly Fed manufacturing index unexpectedly rose to a 6-month high of 18.1 in March, stronger than expectations of 8.3. At the same time, U.S. January new home sales fell -17.6% m/m to a 3-1/4-year low of 587K, weaker than expectations of 722K. In addition, the Conference Board’s leading economic index for the U.S. fell -0.1% m/m in January, in line with expectations.

“From the market’s point of view, oil prices are now driving not just stock prices, but Federal Reserve policy,” said Dennis Follmer, chief investment officer at Montis Financial. “The duration of this oil price spike is exactly what the market is trying to figure out, and that’s why there is volatility.”

U.S. rate futures have priced in a 93.8% probability of no rate change and a 6.2% chance of a 25 basis point rate hike at the conclusion of the Fed’s April meeting. BNP Paribas strategists said the Fed could even raise the possibility of a rate hike if energy prices stay elevated and unemployment remains stable.

In financial news, the Fed and other regulators on Thursday unveiled proposals that would allow America’s largest banks to hold billions of dollars less capital on their books, easing rules introduced after the 2008 financial crisis to guard against future meltdowns.

Meanwhile, Wall Street is bracing for a quarterly event known as “triple-witching,” during which derivatives contracts linked to equities, index options, and futures expire, prompting traders collectively to either roll over their current positions or initiate new ones. About $5.7 trillion in notional options linked to individual U.S. stocks, indexes, and exchange-traded funds are set to expire today, according to Citigroup, marking the largest March expiry in the firm’s records dating back to 1996. The total includes $4.1 trillion in index contracts, $772 billion in exchange-traded funds, and $875 billion in single-stock options.

The U.S. economic data slate is empty on Friday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.31%, up +1.22%.

The Euro Stoxx 50 Index is down -0.02% this morning, erasing an earlier rebound of +1% as the Middle East conflict continued to weigh on sentiment. Energy stocks slumped on Friday, even as oil prices rose. The benchmark index is on track to notch a third consecutive weekly loss, its longest losing streak since April 2025. Meanwhile, JPMorgan, Morgan Stanley, and Barclays now expect the European Central Bank to raise interest rates in 2026, marking a sharp shift from their earlier forecasts for rates to stay on hold, after policymakers highlighted mounting inflation risks stemming from the Middle East conflict. ECB Governing Council member Joachim Nagel said on Friday that the central bank may need to consider raising interest rates as soon as next month if price pressures intensify further due to the conflict. Separately, ECB Governing Council member Francois Villeroy de Galhau said the central bank would neither remain inactive nor overreact to volatility in oil and gas prices, and stands ready to act to stabilize inflation at its 2% target. In corporate news, Unilever Plc (ULVR.LN) rose over +1% after the consumer goods group confirmed it was in talks with McCormick following a takeover offer for its foods business.

Germany’s PPI, Eurozone’s Current Account, and Eurozone’s Trade Balance data were released today.

The German February PPI fell -0.5% m/m and -3.3% y/y, weaker than expectations of +0.3% m/m and -2.7% y/y.

Eurozone’s January Current Account stood at 37.9 billion euros, stronger than expectations of 17.2 billion euros.

Eurozone’s January Trade Balance came in at -1.9 billion euros, weaker than expectations of 12.8 billion euros.

China’s Shanghai Composite Index (SHCOMP) closed down -1.24%, while Japan’s financial markets were closed for a national holiday.

China’s Shanghai Composite Index closed lower today as the ongoing Middle East conflict continued to dampen sentiment. Non-ferrous metal stocks led the declines on Friday. At the same time, photovoltaic stocks jumped after Reuters reported that Tesla was seeking to purchase $2.9 billion worth of equipment from Chinese suppliers to manufacture solar panels and cells. The benchmark index posted its largest weekly decline since November. Meanwhile, China left its benchmark lending rates unchanged on Friday for a 10th straight month, in line with expectations, as the world’s second-largest economy began the year on a firm footing while authorities set a lower growth target. The one-year loan prime rate was held at 3.0%, while the five-year LPR remained at 3.5%, according to the People’s Bank of China. The PBOC said in a statement on Thursday that it would make full use of its financial tools to “resolutely safeguard the stable operations of stock, bond, foreign exchange, and other financial markets.” Lu Ting, chief China economist at Nomura, said, “Clearly this is a response to the ongoing military conflicts in the Persian Gulf, in our view.” In corporate news, Alibaba Group slumped over -6% in Hong Kong after the e-commerce giant posted weaker-than-expected FQ3 revenue, weighed down by sluggish growth in its core e-commerce business. At the same time, Li Ning climbed more than +8% in Hong Kong after the sportswear maker reported stronger-than-expected annual earnings.

Japan’s Nikkei 225 Stock Index was closed today for the Vernal Equinox holiday. The markets will reopen on Monday.

Pre-Market U.S. Stock Movers

Chip stocks fell in pre-market trading, with ON Semiconductor (ON) and Micron Technology (MU) dropping over -1%.

Super Micro Computer (SMCI) plummeted over -23% in pre-market trading after the U.S. government charged a company co-founder and two other individuals with participating in a scheme to divert U.S.-assembled servers to China in violation of export-control laws.

Mosaic (MOS) slid more than -1% in pre-market trading after BofA downgraded the stock to Neutral from Buy.

FedEx (FDX) climbed more than +8% in pre-market trading after the transportation and logistics company posted upbeat FQ3 results and raised its full-year guidance.

Firefly Aerospace (FLY) gained over +6% in pre-market trading after the launch services and spacecraft technology company reported better-than-expected Q4 revenue.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Friday - March 20th

New Found Gold (NFGC), Aura Biosciences (AURA), Titan Mining (TII), AirJoule Technologies (AIRJ), Milestone Pharmaceuticals (MIST), Nkarta (NKTX), Vor Biopharma (VOR), Rani Therapeutics Holdings (RANI).