Three Major Stock Index Futures Show Mixed Performance, Oil Prices Rise Over 3%, Morgan Stanley Holds Firm to Fed Rate Cut Script in June

Pre-Market Market Trends

1. On Tuesday, March 17, U.S. stock futures were mixed. As of press time, Dow futures rose 0.04%, S&P 500 futures fell 0.06%, and Nasdaq futures declined 0.17%.

2. As of press time, European markets were higher: Germany DAX up 0.32%, UK FTSE 100 up 0.78%, France CAC 40 up 0.66%, and Euro Stoxx 50 up 0.43%.

3. Crude oil prices rose: WTI up 3.63% at $95.82 per barrel, and Brent up 3.00% at $103.22 per barrel.

Market News

As oil prices surge and reshape the path to rate cuts, Morgan Stanley remains contrarian, sticking to its forecast of a Fed rate cut in June. Despite the Middle East tensions causing a sharp rise in oil prices, prompting traders to significantly reduce their expectations for Fed rate cuts this year, Morgan Stanley still predicts the Fed will resume rate cuts in June and announce another cut in September. In contrast, the CME FedWatch Tool shows traders generally expect only one rate cut this year, with the timing pushed back to September from earlier expectations of the first half. In a recent report, Morgan Stanley stated that if oil prices stay between $125 and $150 per barrel for an extended period, consumer spending would be heavily impacted, requiring support from the Fed. Global Chief Economist Seth Carpenter noted that inflation driven by oil prices might be temporary, and if the situation worsens enough to impact economic growth, it could actually lower the underlying inflation trend, especially core inflation.

**Oil prices surpass $100—Will the market crash? Wall Street strategists: The probability of a bear market in U.S. stocks is very low. CFRA Research Chief Investment Strategist Stovall said that although oil prices have soared amid Middle East conflicts, turbulence in the energy market is unlikely to cause a major crash in U.S. stocks. Concerns about rising inflation, slowing economic growth, and potential stagflation have led to sell-offs, but the S&P 500 is still less than 5% below its all-time high of 7,002 points set in late January. If it falls below that threshold this week, it will have been over 47 days since the high, which is unusual historically. Stovall warned that while larger declines are possible, the long duration before a significant correction signals that a full-blown bear market is unlikely.

**“AI Disrupts Everything” — Software Sector Under Pressure! Morgan Stanley issues direct lending warning, private credit default rates may rise to 8%. Morgan Stanley recently warned that the rapid development of AI technology continues to disrupt global software industry profitability, and default rates in direct lending could quickly rise to 8%. According to a report by Morgan Stanley analysts including Joyce Jiang, although AI has not yet significantly impacted private credit fundamentals, the high leverage in the software sector and looming maturity walls could push default rates to levels not seen since the COVID-19 pandemic. Direct loans are the core and most common segment of private credit.

Dollar Reclaims “Safe Haven” Status, but the rebound may be short-lived! The dollar has recently gained a breather, strengthening against all major currencies and regaining its safe-haven status during market stress. Currently, the dollar index is near a 10-month high. When other traditional safe-havens like the yen underperform, the dollar shows defensive traits. However, analysts warn this may not last. Murtagh, Investment Director at AJ Bell, said, “The fundamental issues that caused the dollar to weaken before the Middle East conflict remain unresolved, including unpredictable U.S. government policies, large fiscal deficits, and political pressures on central bank independence.” HSBC analysts also noted that the reasons for a strong dollar, which drove its rebound in 2022, are no longer present.

Future Weeks Critical! Moody’s: Strait of Hormuz closure makes U.S. recession unavoidable. Moody’s Chief Economist Mark Zandi said that as long as the Strait of Hormuz remains closed to oil tankers, the U.S. economy will continue to deteriorate, despite current oil and natural gas production roughly matching consumption. If the situation does not change in the coming weeks, a recession will become unavoidable. Even before the Iran conflict escalated, Moody’s machine learning-based leading indicators showed a 49% chance of recession within 12 months. Zandi expects upcoming data will show the recession probability reaching or exceeding 50%. Weak employment data is a key factor, but other economic indicators have also declined recently.

U.S. Diesel Prices Hit 3-Year Highs Above $5, Reigniting Inflation Pressures! Due to ongoing disruptions from Iran, U.S. diesel prices have exceeded $5 per gallon for the first time since December 2022, adding pressure across many regions. According to AAA, the national average gasoline price reached $5.044 per gallon on Monday, a significant increase since the conflict began. Diesel is vital for freight, agriculture, and construction industries, and rising retail prices can trigger broader economic effects. The Energy Information Administration reports that home heating oil, which can be substituted for diesel, has also risen above $5 per gallon. For Trump, sustained fuel price increases could impact the midterm election prospects later this year.

Stock News

Nvidia (NVDA.US) GTC 2026 launches new LPU and CPU products, fully expanding AI data center infrastructure. Nvidia’s GTC conference in San Jose, California, kicked off with multiple new chips and platforms, including the next-generation Groq 3 language processing unit (LPU) and Vera CPUs designed to compete with Intel and AMD. Nvidia announced five large server chassis targeting different AI data center scenarios. CEO Jensen Huang expects the new AI chip architecture Blackwell and next-gen Rubin products will generate at least $1 trillion in revenue by the end of 2027, far exceeding his previous forecast of $500 billion by 2025, highlighting the rapid expansion of AI infrastructure investments.

AMD (AMD.US) advances into rack-scale AI infrastructure! Partners with Tianhong Technology (CLS.US) to build Helios compute clusters. AMD announced a deep collaboration with Tianhong Technology to bring the AMD Helios rack-scale AI infrastructure platform to global AI data centers, targeting competitors like Nvidia’s NVL72 platform. Tianhong will handle R&D, design, and manufacturing of high-performance network switches for the large-scale AI clusters. Helios is crucial for AMD’s revenue and profit growth, as the company shifts focus toward full-rack systems similar to Nvidia’s NVL72. The planned large-scale launch of Helios AI clusters by late 2026 marks a direct challenge to Nvidia’s AI infrastructure dominance.

Kraft Heinz (KHC.US) pivots to growth after halting spin-off: launches health-focused products to boost underperforming brands. Kraft Heinz is rolling out healthier products to revive some weak brands, marking the first phase of growth efforts after suspending its spin-off plans. CEO Steve Cahillane said these new products aim to support the turnaround of three previously underperforming but recently improved brands. The company hopes to demonstrate that similar strategies can reverse its business trajectory. The new foods will test whether investing in product development and expanding high-protein, healthier options can help boost sales.

Huya (HUYA.US) Q4 revenue up 16.2% YoY, net loss of 8.4 million yuan. The company reported Q4 revenue of 1.7385 billion yuan (about $248.6 million), up 16.2% year-over-year. Revenue from gaming services, advertising, and others was 592.5 million yuan (about $84.7 million), up 59.4%. Under Non-GAAP measures, net loss was 8.4 million yuan (about $1.2 million), compared to a net profit of 1.2 million yuan in the same period last year. As of press time, Huya’s pre-market stock price was down over 3%.

Tencent Music (TME.US) reports annual results: net profit attributable to shareholders of 11.06 billion yuan, up 66.4%. For the quarter ending December 31, 2025, Tencent Music’s total revenue was 8.64 billion yuan, up 15.9%; online music services revenue was 7.1 billion yuan, up 21.7%; net profit attributable to shareholders was 2.2 billion yuan, up 12.6%; diluted EPS was $1.41. For the full year 2025, total revenue reached 32.9 billion yuan, up 15.8%; online music revenue was 26.73 billion yuan, up 22.9%; net profit attributable to shareholders was 11.06 billion yuan, up 66.4%. The company plans to pay an annual cash dividend of approximately $368 million.