Why Stocks Surged Yesterday
What’s in Today’s Report:
- Why Did Stocks Surge?
- Housing Market Data Takeaways
Global equities surged overnight, tracking the big gains in U.S. stocks yesterday as both Trump and his Iranian counterpart signaled willingness to imminently end the war in the Middle East over the last 24 hours.
Economically, China’s Mfg PMI fell to 50.8 vs. (E) 52.5 while the Eurozone Mfg PMI firmed to 51.6 vs. (E) 51.4. Meanwhile, EU Unemployment rose to 6.2% vs. (E) 6.1%, however traders remain keenly focused on geopolitics and the data did not materially move markets overnight.
Today, the fresh geopolitical deescalation will remain the market’s primary focus, however there are several important U.S. economic reports due to be released including the ADP Employment Report (E: 40K), the ISM Manufacturing Index (E: 52.3), and the (delayed) February Retail Sales data (E: 0.4%).
Investors will be looking for Goldilocks data pointing to ongoing resilience but not data that is so strong it deters the Fed from considering 2026 rate cuts.
Finally, the Treasury will hold a 4-M Bill auction at 11:30 a.m. ET, which will shed light on rate traders’ outlook for Fed policy rates through the summer, and there are two Fed officials scheduled to speak ahead of the bell: Musalem (9:05 a.m. ET) and Barr (9:10 a.m. ET).
Regarding the Treasury auction and “Fed speak” the more dovish the reaction in Treasuries (yields lower), the better for stocks today.
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