Tuesday saw U.S. stock futures rise slightly as investors returned from the Presidents Day holiday, with a focus on key negotiations between the U.S. and Russia over a potential deal to end the war in Ukraine. European and Hong Kong markets also showed strength, fueled by defense spending increases and optimism over China’s business climate.
Futures Snapshot
- Dow Futures: +64 points (+0.2%)
- S&P 500 Futures: +18 points (+0.3%)
- Nasdaq 100 Futures: +91 points (+0.4%)
With European stocks hovering near record highs, defense stocks have seen a boost amid concerns that the U.S. may scale back its role in European security. Meanwhile, in Hong Kong, stocks surged to a nearly three-year high as Chinese President Xi Jinping met with business leaders, a rare event signaling potential economic policy shifts.
U.S.-Russia Peace Talks in the Spotlight
Top U.S. and Russian officials have convened in Saudi Arabia for critical negotiations regarding Ukraine. Representing the U.S. are:
- Secretary of State Marco Rubio
- National Security Advisor Mike Waltz
- Middle East Envoy Steve Witkoff
On the Russian side, Foreign Minister Sergei Lavrov and Kremlin advisors are leading the talks. However, Ukraine and European allies were notably excluded, raising concerns about the legitimacy of any deal. Reports suggest that this could be a precursor to a Trump-Putin meeting, following Trump’s recent announcement of direct talks with Putin.
Europe’s Response
European leaders held a meeting in Paris to discuss a unified response to Trump’s actions. Analysts at ING note that joint European borrowing for defense spending could be a viable strategy moving forward.
Major Market Movers
Intel (INTC): Cantor Raises Price Target
Cantor Fitzgerald raised its Intel (INTC) price target to $29 from $22, maintaining a Neutral rating. The firm sees Intel’s restructuring and a potential TSMC partnership as key factors, though any deal would have to be mutually beneficial for TSMC.
Apple (AAPL): New iPhone SE Expected
Evercore ISI anticipates Apple’s fourth-generation iPhone SE launch in March, with a price increase from $429 to $499. The analyst estimates that this could add $12B in revenue in its first year.
OpenAI vs. Elon Musk
OpenAI is considering special voting rights for its non-profit board to maintain control amid a hostile takeover attempt by Elon Musk. The measure would allow the board to override major investors like Microsoft and SoftBank, ensuring strategic decisions remain in OpenAI’s hands.
Southwest Airlines (LUV) Cuts Workforce
Southwest is cutting 1,750 corporate jobs, representing 15% of its leadership roles as part of a transformation strategy.
Broadcom (AVGO) Eyes Intel’s Chip Business
Broadcom has informally discussed a bid for Intel’s chip-design and marketing unit but is looking for a partnerbefore making an offer.
British Steel Industry Boost
The UK government is backing steelmakers with a €2.5B plan to counter high electricity costs and unfair trading practices. ArcelorMittal (MT), Cleveland-Cliffs (CLF), Nucor (NUE), and U.S. Steel (X) could see impacts.
Macroeconomic Updates
RBA Cuts Interest Rates
The Reserve Bank of Australia (RBA) cut rates for the first time in four years, lowering the key rate to 4.1%. However, the bank signaled that further cuts are not guaranteed, as inflation remains a concern.
Oil Prices Surge on Russia-Ukraine Tensions
Brent crude continued climbing after a drone attack on a Russian oil pipeline disrupted supply from Kazakhstan. The prospect of a Ukraine peace deal, however, may cap gains as it could ease oil sanctions on Russia.
NQ Market Outlook: Key Levels to Watch
The Nasdaq 100 (NQ) started the week with another gap down, but buyers absorbed it quickly, leading to a strong rebound above the 21,550 level of interest (LOI). Late in the week, price broke through 21,960 LOI and tested 22,100, marking a high at 22,171.75.
This Week’s Focus: 22,100 LOI
- Bullish Scenario: If buyers hold above 22,100, we could see a breakout to 22,300, 22,450 (all-time high), and 22,920.
- Bearish Scenario: If sellers defend 22,100, price may drop back to 21,970, 21,550, and potentially 21,200.
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