Daily Brief - February 28, 2026 (Morning)

 ## Pre-Market Overview U.S. equity futures are pointing to a cautious open following a broad selloff in major indexes on Friday. The S&P 500 futures are down modestly, reflecting lingering concerns from last week’s sharp declines. The Nasdaq 100 futures are also lower, pressured by ongoing tech sector weakness amid AI-related uncertainty. The Dow Jones futures are underperforming, weighed down by financials and industrials. Overnight, Asian markets showed mixed performance with Japan rising modestly while China remained subdued amid geopolitical tensions. European markets closed lower, dragged by banking sector losses and renewed worries over geopolitical risks in the Middle East. The escalation of U.S. and Israeli strikes on Iran has injected fresh uncertainty into global markets, particularly energy and defense sectors. This geopolitical backdrop, combined with recent inflation data showing persistent price pressures, is dampening risk appetite ahead of key economic releases this week. Gold and oil prices have surged overnight, with gold up 1.31% and oil rising 2.73%, reflecting safe-haven demand and supply concerns related to Middle East tensions. Cryptocurrencies are under pressure, with Bitcoin down 1.04% and Ethereum off 2.10%, as risk-off sentiment spreads. Overall, market sentiment remains fragile, with investors balancing geopolitical risks, inflation data, and the evolving AI narrative. ## Top Stories Moving Markets - **U.S.-Israel Strikes on Iran and Geopolitical Risks** The U.S. and Israel launched coordinated strikes on Iran, escalating tensions in the Middle East. This development has triggered a spike in oil prices and safe-haven assets like gold. Defense stocks are expected to gain, while broader market volatility may persist. Traders should watch energy and defense sectors closely as geopolitical risk premiums build. - **Banking Sector Selloff Deepens** Financial stocks, including **$JPM**, **$MS**, and **$WFC**, are under pressure following a week marked by banking sector selloffs and private equity stress. JPMorgan and Morgan Stanley shares fell over 2% and 6%, respectively, while Wells Fargo dropped nearly 6%. This reflects investor concerns about credit conditions and potential economic disruption from AI-driven labor market shifts. Financials are likely to remain volatile today. - **Tech Sector Weakness Amid AI Uncertainty** Despite Nvidia’s strong earnings and AI chip sales, the tech sector is struggling. **$NVDA** shares fell 3.83% after an initial post-earnings rally, while other tech giants like **$MSFT** and **$META** declined 1.88% and 1.80%, respectively. The market is grappling with fears of AI-driven job disruption and a potential rotation away from high-growth tech names. The tech-heavy Nasdaq 100 futures are down 0.63%, signaling continued caution. - **Strong Earnings and Upgrades in Select Names** Several companies reported strong earnings or received bullish analyst upgrades, including **$DELL** (+21.53%), **$NFLX** (+12.98%), and **$FIGS** (+23.50%). These stocks could outperform today as investors seek pockets of strength amid broader market weakness. Additionally, upgrades on names like **$BRO** and **$CDNS** may provide sector-specific support. - **Inflation Data and Economic Indicators** Recent producer price index (PPI) data showed higher-than-expected inflation, with headline PPI rising 0.5% month-over-month and 2.9% year-over-year, above forecasts. Core PPI excluding food and energy also increased 0.3%. These figures suggest inflation pressures remain sticky, complicating the Fed’s policy outlook. Traders will focus on upcoming ISM Manufacturing PMI and other economic releases for further clues on growth and inflation trends. ## Stocks to Watch Today **$BJ** - Bull case highlighted amid strong wholesale club fundamentals and potential for outperformance in consumer staples. **$CME** - Bullish outlook as CME Group plans to launch 24/7 regulated cryptocurrency trading, expanding its market reach. **$CP** - Bull case due to strategic positioning in rail infrastructure and recent operational improvements. **$ICE** - Positive analyst sentiment on Intercontinental Exchange driven by growth in data services and trading volumes. **$KTOS** - Defense sector name with bullish thesis amid rising geopolitical tensions and increased defense spending. **$OLN** - Olin Corporation benefits from bullish case on chemical demand and supply chain improvements. **$APA** - Energy sector pick with strong performance (+4.57%) on rising oil prices and favorable market conditions. **$CDNS** - Cadence Design Systems sees positive momentum from AI-driven demand for semiconductor design tools. **$DELL** - Shares surged 21.53% post-earnings on strong results and dividend hike, signaling robust enterprise demand. **$NFLX** - Netflix jumps nearly 13% after earnings beat and strategic content investments. **$FIGS** - Apparel stock soars 23.5% on bullish analyst initiation and strong growth outlook. **$BRO** - Brown & Brown upgraded to outperform, supported by strong insurance brokerage fundamentals. **$BMNR** - Bitmine Immersion Technologies sees a bull case but shares down 7.14%, reflecting volatility in crypto-related stocks. **$CORZ** - Core Scientific also in focus with a bullish thesis amid crypto infrastructure demand. **$U** - Unity Software down 7.35%, pressured by AI fears and tech rotation. **$WFC** - Wells Fargo under pressure (-5.8%) amid banking sector selloff and credit concerns. ## Sector Setup - **Technology:** Negative bias as AI fears and rotation away from high-growth tech weigh on names like **$NVDA**, **$MSFT**, and **$META**. The XLK ETF is down 1.6%. - **Financials:** Weakness persists with XLF down 2.04%, pressured by bank selloffs and concerns over credit conditions. Watch **$JPM**, **$MS**, and **$WFC** closely. - **Energy:** Positioned for gains with XLE up 1.58% on geopolitical tensions driving oil prices higher. Stocks like **$APA** are leading the rally. - **Healthcare:** Defensive sector strength with XLV up 1.77%, supported by stable earnings and safe-haven demand amid market volatility. ## Economic Calendar & Fed Key economic data today includes the ISM Manufacturing PMI for February, forecasted at 51.8, down slightly from 52.6 prior. This will provide insight into manufacturing sector health amid mixed economic signals. The Chicago PMI already showed strength at 57.7 versus 52.8 expected, suggesting some resilience. Market participants will also monitor the S&P Global Manufacturing PMI final reading and auto sales data. No Fed meetings are scheduled today, but inflation data and geopolitical risks keep the focus on future policy moves. ## Crypto & Commodities Bitcoin continues to slide, down 1.04% to $65,177, pressured by geopolitical uncertainty and risk-off sentiment. Ethereum is weaker, down 2.10% to $1,888. Gold is up 1.31% to $483.75, reflecting safe-haven buying amid Middle East tensions. Oil prices surged 2.73% to $81.95, driven by supply concerns following U.S.-Israeli strikes on Iran. These moves highlight the market’s risk aversion and the impact of geopolitical events on commodity prices. ## Trading Game Plan - Monitor geopolitical developments in the Middle East closely, as escalating U.S.-Iran tensions are driving volatility in energy, defense, and safe-haven assets. - Favor energy and healthcare sectors as defensive plays amid market uncertainty; avoid financials and tech for now given ongoing selloffs and AI-related fears. - Watch for potential rebounds in select earnings winners like **$DELL**, **$NFLX**, and **$FIGS** that could offer tactical long opportunities. - Keep an eye on the ISM Manufacturing PMI and other economic data for clues on growth momentum and inflation trajectory. Sticky inflation could keep Fed hawkishness priced in. - Manage risk carefully given the fragile market sentiment and potential for further sector rotations or credit stress in financials. This session will likely be defined by geopolitical headlines and inflation data, with investors balancing defensive positioning against pockets of earnings strength.