Our Expectations

The key driver for the upcoming session remains the geopolitical agenda. The United States has sent Iran a list of proposals aimed at resolving the conflict. Media reports are discussing the possibility of a ceasefire lasting up to one month and high-level negotiations taking place in the coming days. The news backdrop remains contradictory: Tehran publicly denies the existence of direct dialogue with Washington, although it signals readiness to consider proposals through intermediaries. Authorities in the Islamic Republic have also theoretically agreed to allow vessels from non-hostile countries to pass through the Strait of Hormuz, while simultaneously discussing the possibility of introducing transit fees. At the same time, the United States is considering expanding its military presence in the region, which keeps the risk of escalation elevated and increases market sensitivity to news headlines. Today, MBA mortgage applications data will be released (previous: -10.9%), which is unlikely to have a significant impact on market quotations. The focus will be on remarks by Federal Reserve Board member Stephen Miran at the Digital Asset Summit. His comments on monetary policy or regulation could influence sentiment in certain segments of the market. S&P 500 futures are trading solidly in positive territory. We assess the balance of risks for the upcoming session as neutral, though volatility may remain elevated due to developments in the Middle East. At the open, we expect an upward gap: signs of possible de-escalation in the U.S.–Iran conflict and a correction in oil prices are reducing inflation expectations. A move of the S&P 500 above 6,600 points would signal a positive reassessment of its outlook, while failure to hold above 6,500 could contribute to a continuation of the decline.

In Focus

• Braze (BRZE) shares jumped more than 20% following the release of quarterly and full-year results. The company’s revenue for the last three months increased by 28% year-over-year, while annual revenue grew by 24%. Net revenue retention reached 109%, reflecting steady expansion of the client base. Additional support for BRZE shares came from the announcement of a $100 million share buyback (including a $50 million accelerated program) and signs of improving operating leverage.
• DigitalOcean (DOCN) shares are down more than 5% after announcing a $700 million equity offering, with the potential to increase the issuance to $805 million. Although the company plans to use the funds to expand data centers for AI workloads and reduce debt, investors are concerned about potential share dilution and uncertainty regarding the final terms of the transaction.
• KB Home (KBH) shares are correcting by more than 3% following weak earnings results: the company’s revenue fell 23% year-over-year to $1.08 billion, the number of homes brought to market declined by 14%, and the average selling price dropped to $452,000. This dynamic indicates pressure from weakening demand and increasing price competition.
• Blaize Holdings (BZAI) shares surged nearly 50% after the company reported fourth-quarter revenue growth of roughly 20 times year-over-year, reaching $23.8 million. The result was driven by the expansion of commercial AI infrastructure projects, including cloud, sovereign AI, and industrial segments, as well as the development of the company’s proprietary AI platform.
• Robinhood (HOOD) shares are up about 4% after announcing a share buyback program of up to $1.5 billion, exceeding the previous limit by more than $1.1 billion. The program is expected to start in the current quarter and run for approximately three years.

Market Yesterday

Trading on U.S. stock exchanges on March 24 ended mostly in negative territory. S&P 500 declined 0.37%, NASDAQ 100 fell 0.77%, Dow Jones dropped 0.18%, Russell 2000 gained 0.45%. During the session, benchmarks moved between positive and negative territory, reacting to contradictory news regarding the conflict with Iran and possible diplomatic solutions. The optimism that prevailed during the previous session gradually faded, and by the close the indices had retreated from their intraday highs. Pressure on the market came from sell-offs in shares of major technology companies, including Alphabet (GOOGL: -3.85%) and software developers, particularly Microsoft (MSFT: -2.68%), amid renewed concerns about the outlook for artificial intelligence. On the broader market, the energy sector became the leader of growth, supported by rising oil prices (WTI: +4.8%, Brent: +4.4%), with XLE gaining 2.03%. The telecommunications sector was among the laggards (XLC: -1.40%). The S&P Global Services PMI for March declined from 51.7 in February to 51.1, below the consensus estimate of 52. Meanwhile, the Manufacturing PMI unexpectedly rose to 52.4, compared with market expectations of 51.5. According to the final estimate, nonfarm productivity in the fourth quarter increased by 1.8%, matching consensus expectations. Unit labor costs rose by 4.4%, compared with the forecast of 3.6%, signaling persistent inflationary pressure. Against this backdrop, Treasury yields increased, particularly at the short end of the curve. Additional negative pressure on the debt market came from a weak auction of two-year Treasuries, which cleared with a 1.8 basis-point tail.

Corporate News

Estée Lauder (EL: -9.9%) confirmed that it is holding negotiations regarding the acquisition of Spain’s Puig. The Financial Times reported potential interest from Japan’s SMFG in acquiring Jefferies Financial Group (JEF: +2.5%). However, the increase in JEF shares remained limited due to uncertainty about the timing and terms of the potential deal. Smithfield Foods (SFD: +4.3%) exceeded expectations across key metrics and raised its dividend by 25%. The company’s forecast for operating profit in fiscal year 2026 came in above consensus estimates despite the risk of rising costs. Core & Main (CNM: +4.5%) reported results in line with market expectations. Although management pointed to unfavorable conditions in key product and service categories and issued relatively cautious guidance, investors reacted positively to the resilience of underlying demand. A sharp drop in Circle Internet (CRCL: -20.1%) shares was triggered by reports of the imminent approval of an updated version of the Digital Asset Market Clarity Act. According to CoinDesk, the new rules may restrict the distribution of yield generated by stablecoins.