- The futures of the three major Wall Street indices showed a weakening trend before the opening, with Dow Jones Industrial Average (DJIA) futures down 0.34%, S&P 500 futures dropping 0.24%, and Nasdaq 100 futures declining 0.13%, reflecting the market's repricing of the outlook for the Middle East ceasefire agreement.
- On the macroeconomic data front, the core personal consumption expenditure (PCE) price index in the United States recorded an annual rate of 2.8% in February, aligning with market expectations. However, the fourth quarter economic growth rate unexpectedly slowed to 0.5%, below the anticipated 0.7%, sparking concerns about stagnation where economic momentum and inflation persistence coexist.
- The currency market's expectations for Federal Reserve (Fed) rate cuts significantly cooled. According to London Stock Exchange Group (LSEG) data, traders now see a roughly 30% chance of a 25-basis point rate cut by the end of 2026, down sharply from 56% the day before. Meanwhile, there is a divergence among stocks in the cloud computing infrastructure sector, with Applied Digital Corp. (APLD:US) falling due to widening losses in its quarterly report, while CoreWeave (CRWV:US) recorded gains after securing a large order from Meta Platforms (META:US).
Reassessment of Macro Inflation Data and Rate Cut Path
The U.S. personal consumption expenditure price index rose at an annual rate of 2.8% in February. This expected data did not effectively alleviate macroeconomic concerns about high inflation levels. Coupled with the 0.5% weaker economic growth data for the fourth quarter, the macroeconomic fundamentals present a complex combination of slowing growth and firm prices. The previously released minutes of the Fed's March meeting showed that some policymakers even discussed the possibility of rate hikes to address the price pressures deviating persistently from the 2% policy target. This hawkish inclination, combined with the risk of energy price rebounds due to geopolitical conflicts, has significantly shifted the pricing in the federal funds futures market, largely squeezing out the probability of a rate cut within the year, as the market gradually adapts to a longer period of restrictive interest rates.
Geopolitical Frictions and Energy Supply Chain Variables
The temporary ceasefire agreement in the Middle East is showing fragility at the micro-execution level. The U.S. government has clearly stated that it will maintain regional military deployments until a final agreement is reached, while Iran has conditioned its compliance on Israel ceasing military actions in Lebanon. This mutual political maneuvering directly affects real-world commodity trade. There are still no substantial signs of commercial navigation recovery in the Hormuz Strait, and the physical obstruction of energy transport has supported international oil prices, which have rebounded after falling below $100. The input cost risk of rising energy prices serves as a crucial external variable suppressing pre-market risk appetite in U.S. stocks.
Divergence in the Micro Fundamentals of the Computing Infrastructure Sector
Against the backdrop of overall market pressure, providers within the technology subsector of computing infrastructure exhibit noticeable performance and capital divergence. Data center operator Applied Digital Corp. (APLD:US), burdened by the year-over-year expansion of net losses in the third quarter, saw its pre-market stock price fall by 2.7%, reflecting the cash flow pressures and delayed profit realization that companies face during heavy asset expansion periods. In contrast, cloud infrastructure startup giant CoreWeave (CRWV:US) announced an expanded cloud collaboration agreement with Meta Platforms worth a total of $21 billion, driving its stock price up by 1.5%. However, the company's concurrent announcement of a $3 billion convertible bond issuance plan, which could potentially dilute equity, has somewhat limited its short-term gains.
