The US market: overview and forecast for March 19th. The external background contributes to the continuation of correction

We expect

The upcoming trading dynamics will continue to be driven by foreign policy news and energy market developments. Yesterday, tensions in the Middle East sharply escalated. Israel struck Iran's largest gas field, South Pars. In response, Iran targeted Qatar’s industrial center Ras Laffan Industrial City, damaging the world’s largest LNG export infrastructure. Against this backdrop, the oil rally continues, and increased risks for shipping through the Persian Gulf and the Strait of Hormuz support expectations of rising inflation, maintaining pressure on interest rates. Uncertainty is also heightened by statements from Donald Trump. The president claims Washington did not know in advance about the strike on South Pars and opposes new attacks on the field if Iran does not continue damaging Qatar’s energy infrastructure. Simultaneously, the White House chief warned of an extremely tough response in case of further escalation, keeping the market sensitive to any news from the Middle East. This Thursday, weekly jobless claims data for the week ending March 14 will be released (initial claims consensus: 215k, versus 213k for the previous comparable week). Continuing claims for the week ending March 7 are expected to remain at 1.85 million. Also, the Philadelphia Fed Manufacturing Index for March will be published (consensus: 8 points, February: 16.3 points). Additionally, January building permits (December: -5.4%) and new home sales (consensus: -2.7%, December: -1.7%) will be reported. Before the market opens, quarterly results will be released by Alibaba Group (BABA), Accenture (ACN), Signet Jewelers (SIG), Arcos Dorados (ARCO), and Aveanna Healthcare (AVAH). FedEx (FDX) and Planet Labs (PL) will report after the main session. Futures on U.S. stock indices show moderate declines. The risk balance for the upcoming session is assessed as negative amid elevated volatility. From a technical analysis perspective, the nearest resistance for S&P 500 is around 6700 points, with support near 6615 points.

In focus:

Rocket Lab (RKLB) shares are up about 2% after signing a $190 million launch services contract including 20 hypersonic test flights of the HASTE launch vehicle under the U.S. Department of Defense MACH-TB 2.0 program. The contract raised the company’s total order book in launch and space systems segments to over $2 billion, with more than 70 launches in the order portfolio. Red Cat Holdings (RCAT) shares lost over 5% after the main session despite a fourth-quarter revenue surge of 1985% YoY to $26.2 million versus consensus of $23.9 million. Net loss per share of $0.17 pressured the stock, compared to market expectations of $0.15. Five Below (FIVE) shares gained about 8% after quarterly results. Annual revenue rose 23% to approximately $4.8 billion, comparable sales increased 12.8%, and adjusted EPS rose 32% to $6.67. The 2026 forecast anticipates revenue of $5.2–5.3 billion and EPS around $8, though tariff risks limit revaluation potential. Micron (MU) shares fell roughly 4% in extended trading despite beating revenue and profit expectations. Closing long positions after the year-to-date rally was a key pressure factor. Investor caution increased due to 2026 capital expenditure plans exceeding $25 billion and 2027 construction costs rising by $10 billion YoY. Traders factor in cyclical demand risks for memory chips and potential oversupply. EquipmentShare (EQPT) shares rose about 8% after fourth-quarter results. EPS was $0.24 versus a consensus of $0.19, while revenue slightly missed at $1.57 billion versus expected $1.58 billion.

Market yesterday:

On March 18, U.S. stock trading ended near intraday lows, offsetting gains from earlier in the week. S&P 500 fell 1.36%, NASDAQ 100 lost 1.43%, Dow Jones dropped 1.63%, and Russell 2000 declined 1.64%. Pressure came from the Fed meeting results and Jerome Powell’s tighter commentary. External policy news and rising Treasury yields fueled the sell-off. All “Magnificent Seven” companies showed negative performance, impacting stock indices. All sectors in the S&P 500 ended the day in negative territory. Leaders of decline were non-cyclical (XLP: -2.43%) and cyclical (XLY: -2.31%) consumer goods suppliers, as well as materials producers (XLB: -2.1%). Energy (XLE: -0.14%) appeared most resilient due to ongoing geopolitical oil price premium. The key macro factor was the Fed meeting, where the rate was maintained at 3.5–3.75% as widely expected. Fed Chair Jerome Powell highlighted risks of prolonged inflationary pressure, including energy price rallies. On this backdrop, short-term bond yields rose about 10 bps, intensifying pressure on equities. The market reacted negatively to February’s core PPI, which rose 0.5% MoM versus 0.3% consensus, with the three-month annualized rate hitting the highest since May 2022. Investor optimism was not boosted by news of attacks on Iran’s energy infrastructure and threats of retaliatory strikes in Persian Gulf countries, including missile strikes on Qatar LNG facilities. This heightened concerns over energy supply stability, supporting oil price increases and increasing stock-selling activity.

Company news:

Microsoft (MSFT: -1.9%) is considering legal action against Amazon (AMZN: -2.5%) and OpenAI over a $50 billion agreement between the companies, arguing it violates existing agreements with the corporation and increases competition in the AI infrastructure segment. Macy’s (M: +4.7%) reported fourth-quarter earnings, revenue, and comparable sales above consensus despite weak foot traffic. Revenue guidance for the current fiscal year also exceeded market expectations. Jabil (JBL: -1.4%) delivered strong second-quarter results and raised annual guidance, though investor targets were even higher. The market was disappointed by maintained margin and free cash flow forecasts. Williams-Sonoma (WSM: +1%) reported fourth-quarter EPS and comparable sales above consensus, while revenue slightly lagged expectations. Quarterly dividend rose 15.2%. Management noted inventory growth of 9.8% to $1.5 billion due to tariff costs, indicating this impact will be pronounced in the first half of FY2026. Revenue guidance aligned with average market expectations.