The three major stock index futures all rose, and the January PCE data will be released tonight.

1. On March 13th, Friday, before the US stock market opens, the three major US stock indices futures all rose. As of the time of writing, Dow futures are up 0.36%, S&P 500 futures are up 0.36%, and Nasdaq futures are up 0.36%.

2. As of the time of writing, Germany’s DAX index is up 0.05%, the UK’s FTSE 100 index is up 0.14%, France’s CAC 40 index is up 0.02%, and Europe’s STOXX 50 index is up 0.13%.

3. As of the time of writing, WTI crude oil is down 2.27%, at $93.56 per barrel. Brent crude oil is down 1.42%, at $99.03 per barrel.

Market News

Tonight’s PCE may show anomalies not seen in decades! Will the Federal Reserve’s rate cut path face new obstacles? At 8:30 PM Beijing time on Friday, the US will release the January PCE Price Index. Market expectations are that PCE will increase 2.9% year-over-year, consistent with the previous value, and rise 0.3% month-over-month, slowing from last month’s 0.4%. On the core side, the market expects the core PCE Price Index to accelerate slightly to 3.1% year-over-year, the largest increase since April 2024, with month-over-month growth remaining at 0.4%.

Trump states that he will escort ships through the Strait of Hormuz if necessary, increasing threats against Iran. US President Trump said that if needed, the US will escort ships through the Strait of Hormuz, but he also expressed hope that US-led military actions can proceed smoothly, vowing to “launch very fierce strikes against Iran within the next week.”

The Fed rate cut expectations have fallen short: June becomes the new “watershed,” and Wosh’s “era of easing” may not arrive as scheduled. Surveys show that economists have delayed their expectations for the Fed’s next rate cut from March to June, but still expect two 25 basis point cuts by the end of the year. The 46 economists surveyed expect a faster rate cut pace than futures market pricing. Their median forecast suggests one more rate cut than the Fed officials’ December forecast for 2026. Among the surveyed economists, nearly one-third express doubts about the core figure chosen by President Trump to succeed Powell as Fed Chair—former Fed Governor Kevin Wosh. When asked whether they believe Wosh will commit to achieving the Fed’s 2% inflation target, 13% are uncertain, and 18% say “No.”

Skyrocketing oil prices are easing supply tensions! Under the blockade of Hormuz, Russian oil steps in. After the US granted a temporary exemption allowing other countries to purchase Russian energy cargoes already shipped at sea, Russian crude oil and broader fuels on about 30 oil tankers in Asian waters are now available for international buyers interested in Russian oil. Analysts say that this round of Middle East geopolitical conflicts has significantly increased Russia’s marginal pricing power and fiscal revenue capacity, with the Russian government potentially gaining billions of dollars in additional revenue this month. However, the current surge in international oil prices is not sufficiently supported by the exempted Russian oil supply to push prices into a sustained downward trajectory.

The US, Japan, and the EU plan to advance key mineral trade agreements, possibly establishing a price floor mechanism. According to informed sources, the US, Japan, and the EU plan to announce related proposals in the coming weeks to lay the groundwork for a critical mineral trade agreement. Sources say the Office of the US Trade Representative (USTR) has been leading negotiations with the EU and Japan on this framework and will continue to do so. The agreement aims to set price floors and tariffs for key materials to counteract market behaviors from China. A February report indicates that the US has developed a key mineral price floor mechanism and is promoting it among allies. Currently, the Trump administration and over 50 countries are seeking to reduce reliance on Asian resource supplies, deemed vital for national security.

Top funds outperforming 97% of peers are optimistic about Chinese tech stocks: increasing holdings in Alibaba and Tencent, betting on AI application dividends in China. A high-performing emerging market fund is increasing investments in large Chinese AI companies, betting these firms are more valuable than US tech giants investing heavily in expansion. Caroline Cai, CEO of Pzena Investment Management, says her $3.9 billion fund has been increasing holdings in Tencent and Alibaba. She believes these companies are undervalued and have greater upside potential considering their potential to change daily life. In an interview in New York, Cai said, “You don’t have to pay high costs for the productivity gains AI might bring.”

Stock News

Q1 earnings beat expectations but can’t hide AI anxiety: Adobe CEO resigns after 18 years. Facing market doubts about its ability to stay ahead in the AI era, Adobe CEO Shantanu Narayen will step down. On the same day, the company released its Q1 report, exceeding market expectations in revenue and earnings. Adobe expects revenue for the current quarter ending in May to be between $6.43 billion and $6.48 billion, with the average analyst estimate at $6.43 billion; adjusted EPS is forecasted at $5.80 to $5.85, versus an average estimate of $5.70. For the quarter ending February 27, revenue grew 12% to $6.4 billion, above the $6.28 billion forecast. Adjusted EPS was $6.06, compared to an expected $5.88.

Middle East conflict spreads to beauty retail: inflation may squeeze consumer budgets, Ulta Beauty’s guidance for this year falls short. In Q4, driven by the success of its Beauty Unleashed strategy, same-store sales growth, and acquisition of Space NK, revenue continued to perform well, with net sales up 11.8% to $3.9 billion, surpassing expectations, and same-store sales up 5.8%, higher than the 1.5% growth in Q4 2024 and above the 4.25% forecast. However, EPS was $8.01, below last year’s $8.46 and 2 cents below Wall Street estimates. The company’s full-year guidance is below expectations. The company states that same-store sales—measuring online and brick-and-mortar stores open at least a year—are expected to grow 2.5% to 3.5% this year, with the median below analysts’ 3.5% estimate.

Apple announces reduction of App Store commission rates in China. Following discussions with Chinese regulators, Apple will lower commission rates for apps in China’s App Store. The standard commission rate for in-app purchases and paid apps will decrease from 30% to 25%. Eligible apps under the Small Developer Program and Small Program Partner Program will see their commission rates lowered from 15% to 12% after the first year. The adjustment takes effect from March 15, 2026, without requiring developers to re-agree to terms. Apple states it remains committed to fairness and transparency for all developers and will continue to offer competitive App Store rates not exceeding those in other markets.

From a major strike to governance red flags, Starbucks’ labor risks may threaten shareholder value. Two influential US shareholder advisory firms warn that Starbucks may be overlooking financial and reputational risks from labor disputes, which could impact long-term shareholder value growth. The warning comes as contract negotiations between Starbucks and its US union—formed by its baristas—have been ongoing for over a year. “Disputes over labor issues continue, and it’s unclear whether the board has adequately overseen management’s handling of labor relations,” analysts from ISS, the largest shareholder advisory firm, wrote earlier this month. The annual shareholder meeting is scheduled for March 25.

Microsoft expands AI healthcare efforts: launches Copilot Health, targeting “superintelligent healthcare.” Microsoft is expanding its AI-driven consumer health products with the launch of Copilot Health. This service can gather data from wearables, health records, and lab results to provide “medical intelligence.” Microsoft believes this will pave the way toward “superintelligent healthcare,” defined as health AI capable of combining general practitioners’ broad knowledge with specialists’ deep expertise. Copilot Health will be rolled out in phases, initially in the US for users aged 18 and above, available in English. It can collect data from over 50 wearable devices, including Fitbit, Oura, and Apple Health.

To address competition and cost pressures, STMicroelectronics plans to introduce humanoid robots to advance factory automation. The European chip giant announced a transformation plan on Thursday, including retraining existing staff and deploying robots in aging fabs to meet industry challenges and avoid closures. At SEMI’s semiconductor conference in Sopot, Poland, STMicro’s manufacturing head Thomas Morgenstern showed a video of a robot transporting silicon wafer carriers into equipment. “This is our first operational robot,” Morgenstern said. “In the coming years, we will deploy over 100 humanoid robots inside factories to handle various tasks.”

Important Economic Data and Event Schedule

Beijing time 20:30: US January Personal Spending MoM, US January PCE Price Index YoY, US Q4 Real GDP Annualized QoQ Revision, US January Durable Goods Orders MoM preliminary.

Beijing time 22:00: US March University of Michigan Consumer Sentiment Index preliminary, US January JOLTS Job Openings.

Next day Beijing time 01:00: US total US rig count for the week ending March 13.

Next day Beijing time 03:30: CFTC weekly Commitments of Traders report.