8 Key Items Shaping the Stock Market Thursday: Weeks, Not Days? Hikes, Not Cuts?

FedEx: Separate Facts From Emotion

These are the early headlines and other items poised to influence the market at the start of trading Thursday. As we share this collection of market drivers, U.S. equity futures point to a lower open.

1. U.S. President Donald Trump said Iran was desperate for a deal to end nearly four weeks of ​fighting, contradicting the Iranian foreign minister who said Tehran was reviewing a U.S. proposal but had no intention of holding talks to wind down the war. (Reuters) Iran has responded negatively to an American proposal aimed at ending the ongoing imposed war, insisting that it will only occur on Tehran’s own terms and timeline, a senior political-security official told Press TV on Wednesday… “Iran will end the war when it decides to do so and when its own conditions are met,” the official said, emphasizing Tehran’s resolve to continue its defense and inflict “heavy blows” on the enemy until its demands are fulfilled. (PressTV) President Trump has told associates in recent days that he wants to avoid a protracted war in Iran and that he hopes to bring the conflict to an end in the coming weeks. (WSJ)

In response to this renewed specter of uncertainty for a potential peace deal, oil prices are rising this morning. But with even Trump now expecting a deal to come in weeks, not days, means the impact of higher oil and other energy prices isn’t going away near-term. That explains why the Cleveland Fed Inflation Nowcasting Model now sees the March PCE Price Index rising to 3.23% year over year in March from 2.67% in February.

However, we’d remind you FedEx  (FDX)  resets its fuel surcharges weekly, yesterday the U.S. Postal Service announced a “time-limited price change to better align its costs of transportation with the market,” HB Fuller  (FUL)  announced a global price hike of at least 10% starting in April, and specialty chemical company Interplastic announced a price hike starting April 4 due to “a rapid surge in raw material and operating costs resulting from ongoing instability in the Middle East.” Odds are high we’ll see more of this from other companies or at least attempts to pass on their higher input costs.

2. The conflict in the Middle East is reviving the specter of inflation and hobbling the global economy just as it was showing signs of strengthening at the start of the year, the OECD said. In its updated outlook on Thursday, the Paris-based organization sharply increased its inflation forecasts for major economies and now sees the average rate for the Group of 20 this year jumping to 4% — with an even higher pace in the US — rather than the 2.8% it predicted in December… For the US, the OECD expects inflation to jump to 4.2% this year, from 2.6% last year. Its price outlook for this year is 1.2 percentage point higher than in December. (Bloomberg)

This adds to our comments in item #1 and will be another factor in the market not only pushing out Fed rate-cut expectations but fueling chatter about a potential rate hike. For us, it’s another reason to avoid interest rate-sensitive sectors, like the housing market. The risk we see there is more of what KB Home  (KBH)  reported earlier this week – net order growth that prompted a reduction in its full-year delivery guidance.

3. Meta and YouTube must pay millions in damages to a 20-year-old woman after a jury decided the social-media giant and video streamer designed their platforms to hook young users without concern for their well-being. The California jury’s decision Wednesday in a first-of-its-kind lawsuit could influence the outcome of thousands of similar lawsuits accusing social media companies of deliberately causing harm. (MarketWatch)

While the $6 million in financial damages — $4.2 million for Meta  (META)  and $1.8 million for Google’s  (GOOGL)  YouTube — is small relative to their respective quarterly revenue, it follows a verdict in New Mexico that found Meta should pay $375 million for a case related to safeguarding users of its apps from child predators. Meta has already introduced Teen Accounts, which include private settings, content and parental restrictions, and YouTube offers what it calls “supervised accounts for teens.” We will keep an eye on forthcoming cases to assess the potential financial impact, but also potential changes to those teen accounts and what that could mean for advertising revenue expectations.

4. Bain & Company today announced an expansion of its lead management consulting partnership with Palantir… Bain is laying the groundwork to meet fast-developing requirements from its clients to accelerate AI-powered transformations for their businesses, harnessing Palantir’s software and Forward-Deployed Engineers to achieve the end-to-end delivery of AI use cases from strategic plans through to operationalization. (Bain)

Another win for the Pro Portfolio’s position in Palantir  (PLTR) , and another indication that AI adoption is accelerating in the enterprise. We continue to think rising AI adoption and usage will be a tailwind not only for our AI and data center chip holdings, but also for networking-related equipment and chips as AI-driven data traffic explodes.

5. Uber Technologies has partnered with Pony.ai and autonomous vehicle startup Verne to roll out the first commercial ​robotaxi service in Europe, with operations set to ‌start in the Croatian capital Zagreb. Under the deal, Chinese robotaxi firm Pony.ai will supply the autonomous driving technology, while Croatian ​startup Verne will serve as the fleet owner ​and manage day-to-day operations, the companies said on ⁠Thursday. (Reuters)

We’re flagging this partly because of Pro Portfolio’s positions in Google, Amazon  (AMZN) , and Nvidia  (NVDA) , and their respective autonomous driving initiatives, but also because we’ve been wondering how the shift to autonomous driving could impact Uber’s  (UBER)  asset-lite business model.

6. Senate talks to reopen the Department of Homeland Security deadlocked anew on Wednesday after Democrats and Republicans both balked at each other’s latest offers, clashing over Democrats’ demands for new restrictions on federal agents carrying out President Trump’s deportation crackdown. (NY Times)

Brace yourselves. The TSA’s acting administrator, Ha Nguyen McNeill, shared that even if the shutdown ends soon, training for new officers takes four to six months. We interpret that to mean the exodus of TSA officers will not be addressed in short order, and that raises questions about air travel prospects. While I’ve shifted back to Amtrak to travel to and from New York, I have to wonder what this means when the 2026 World Cup starts here in the U.S. on June 11?

7. Economic data today per TipRanks: Initial & Continuing Jobless Claims (Weekly), EIA Natural Gas Inventories (Weekly).

8. Companies reporting today per TipRanks: AM – Shoe Carnival (SCVL) . PM – Oxford Industries (OXM) .

Related: The Oversold Rally Marches On. How Far Can it Go?

More Pro Portfolio: 

• Exiting 1 Position, Buying 4 More as Trump’s Iran Update Sparks Market Whiplash
• We’re Tracking 21 Portfolio Signals Across 9 of Our Investing Themes
• Weekly Roundup: Sharpening Our Pencils for More Market Tests Ahead

At the time of publication, TheStreet Pro Portfolio was long AMZN, GOOGL, META, NVDA, and PLTR.