Nasdaq, S&P 500 Futures Stretch Gains After February Inflation Prints In Line With Expectations

Trading in the U.S. index futures suggests stocks could strive to pick up some momentum after Monday’s listless performance. The fallout of the collapse of the SVB Financial Group SIVB-owned Silicon Valley Bank has put Tuesday’s February inflation print on the back burner.

Cues From Monday’s Trading:

The major indices opened Monday’s session lower despite the government handholding the banking system. After rebounding in late morning trading, the averages stayed mostly above the unchanged line until late trading.

The S&P 500 Index and the Dow Industrials retreated into negative terrain, while the tech-heavy Nasdaq Composite Index managed to end moderately higher.

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Financial stocks, unsurprisingly, were the worst hit, and energy, financial, material and IT services stocks also contributed to the slide, while utility, real estate, and healthcare stocks provided offsetting impact. The healthcare space received a shot in the arm from a couple of multi-billion dollar deals announced Monday.

U.S. Indices' Performance On Monday

Index	Performance (+/-)		Value
Nasdaq Composite	+0.45%		11,188.84
S&P 500 Index	-0.15%		3,855.76
Dow Industrials	-0.28%		31,891.14

Analyst Color:

A positive offshoot of the banking crisis that intensified last week is tempered expectations for the March fed decision. The futures market is pricing in a 79% probability of a 25 basis point increment later this month and a 21% probability of a pause.

Fundstrat’s Tom Lee tweeted that the bond market could be pricing in a 25% chance of a 50 basis point hikes each in March and May. Fed Chair Jerome Powell will likely emphasize data dependence, which increases the likelihood of a 25 basis point hike, he added.

He expects stocks to increase, premised on lower bond volatility and yields.

Carson Group’s Ryan Detrick, meanwhile, made the case for no rate hike at all. He said the two-year Treasury note yield is down 100 basis points in the past two days to 4.05%, marking the largest two-day drop since the Oct’87 crash.

“Six days ago there was an 80% chance of a Fed hike of 50 bps. Now legit chance of no hike at all,” Detrick said.

Futures Today

U.S. Futures' Performance On Tuesday

Index	Performance (+/-)
Nasdaq 100 Futures	+0.59%
S&P 500 Futures	+0.68%
Dow Futures	+0.55%
R2K Futures	+2.07%

In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust SPY rose 0.71% to $388.09  and the Invesco QQQ Trust QQQ gained 0.72% to $292.77, according to Benzinga Pro data.

Upcoming Economic Data:

The Bureau of Labor Statistics released the consumer price inflation report for February, which showed a monthly inflation rate of 0.4%, in line with expectations. The core CPI rose 0.5%, a tad above the expected 0.4% increase. The annual rates of consumer prices and core consumer prices came in at 6% and 5.5%, respectively, right in line with expectations.  

At 11 a.m. EST, the Cleveland Fed is due to release its February inflation data.

Federal Open Market Committee member and Fed Governor Michelle Bowman is due to speak at 5:20 p.m. EST.

Check out Benzinga’s preview of week’s economic data by following this link

Stocks In Focus:

• Regional bank stocks were all solidly higher in premarket trading on Tuesday, with PacWest Bancorp. PACW and First Republic Bank FRC leading the pack with gains of over 35% and 21%, respectively.
• United Airlines Holdings Inc. UAL shares slid over 6% after the company warned of a first-quarter loss due to expenses related to a potential union contract with pilots shifting to the quarter.
• Guess? Inc. GES, Lennar Corporation LEN, Manchester United plc. MANU, SentinelOne Inc. S and Smartsheet Inc. SMAR are among the notable companies reporting earnings on Tuesday.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures were extending their slide and traded down 2.71% at $72.77 a barrel in early European trading.

The 10-year Treasury yield has moved back above 3.6% after violating the level to the upside on Monday.

Asian stocks fell across the board on Tuesday, as traders in the region mulled over the impact of the banking crisis in the U.S. and also looked ahead to the U.S. inflation data. On the other hand, the major European markets are holding up amid some volatility in late-morning trading.

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