US Stock Market Outlook: Oil Prices Surge, Futures Drop; Awaiting Nonfarm Data and Fed Rate Path.

Market Overview

On Friday morning, Qatar warned Gulf countries about production cuts, leading to a widening decline in U.S. stock futures and WTI crude oil prices breaking $86 for the first time in two years. As of the time of writing, the three major U.S. stock index futures continued to drop, with the market awaiting the non-farm payroll data results scheduled for 21:30 Beijing time.

Pre-Market Movements

• Star Tech Stocks: Most are down, with ASML falling over 3%, TSM down over 2%, Micron Technology down nearly 2%, and Nvidia and Amazon both down over 1%.

• Popular Chinese Stocks: These stocks saw collective gains, with NetEase up over 4%, JD.com up over 3%, and both Kingsoft Cloud and Tencent Music also rising over 3%.

• Oil Stocks: Battalion Oil surged over 27%, U.S. Energy up over 5%, and Occidental Petroleum up over 2%. The U.S. Oil ETF rose nearly 8% pre-market, accumulating over 17% gains this week.

Notable Company Updates

• Marvell Technology: Shares soared over 14% after a 72% increase in Q4 operating profit, driven by surging demand for AI ASICs and SSDs. The management raised FY27 revenue guidance from $10 billion to $11 billion.

• Nvidia: The stock fell 1.4% as the U.S. considers globalizing AI chip export approval regulations, requiring companies like Nvidia to obtain government approval for chip exports.

• Tesla: Reported a 10% year-on-year increase in European sales for February, registering 17,425 vehicles across 15 major markets.

• Meta Platforms: Plans to develop its own AI chips while collaborating with top chip manufacturers to meet current AI business demands.

Geopolitical and Economic Impacts

• Middle East Tensions: The conflict has severely impacted shipping through the Strait of Hormuz, with only two vessels passing in the last 24 hours, raising concerns over energy transport and oil prices.

• Market Reactions: Global stock funds saw a net outflow of $1.44 billion, with U.S. stock funds experiencing the largest outflow since January 7, totaling $21.92 billion.

Supply Chain Concerns

• Aluminum Prices: JPMorgan warns that disruptions in Middle Eastern aluminum production could push prices towards $4,000 per ton due to reduced global supply.

• Insurance and Fertilizer Supply: The ongoing conflict is causing a surge in war risk insurance premiums and potential disruptions in fertilizer supplies, which could lead to soaring food prices.

Conclusion

The market is currently navigating through a complex landscape of geopolitical tensions, regulatory changes, and significant corporate developments, all of which are influencing stock performance and investor sentiment.