Stocks closed higher yesterday, while oil fell.

The beginning of the release of 172 million barrels of oil from U.S. Strategic Petroleum Reserves (SPR) helped calm oil prices, and in turn, buoyed stocks. This is part of a coordinated effort by the G7 countries (and others) to tap as many as 400 million barrels of stored oil. The U.S. release is scheduled to begin this week and the drawdown will be spread out over 120 days.

Reports that the U.S. is letting Iranian tankers thru the Strait of Hormuz also helped ease oil concerns. And the hope is that Iran will reciprocate and allow ships from other countries to pass (although, it's unlikely U.S. or Israeli vessels will be permitted, or even attempt to do so).

President Trump also is hoping other countries will respond to his call for "those who are affected by Iran's attempted closure of the Hormuz Strait" to send "War Ships, in conjunction with the United States of America, to keep the Strait open and safe." (There's no official word yet on who might join the effort.)

In other news, AI stocks got an added boost after reports that Meta is expanding its deal with Nebius for a cloud computing infrastructure deal. The deal calls for Nebius to provide at least $12 billion of AI compute by 2027, with the deal reaching as high as $27 billion over 5 years. Nebius stock soared by 14.96% yesterday. The high-end of the deal is nearly as large as Nebius' Market Value of $28.4B going into it. And investors cheered the news. NVIDIA also jumped on the report as it includes one of the first large-scale deployments of NVIDIA's Vera Rubin platform, which Nebius will be using. NVDA was up 1.65%.

NVIDIA's CEO, Jensen Huang, at their GTC Conference yesterday (which runs thru Thursday, 3/19), said he expects sales from their Blackwell and Vera Rubin products to hit $1 trillion by the end of 2027. That's 2x the $500 billion he had predicted last year for those two.

On the economic report front, yesterday's Retail Sales report showed Retail Sales down last month by -0.2% m/m. Ex-Vehicles it was flat (0.0%). Ex-Vehicles & Gas it was up 0.3%.

The Empire State Manufacturing Index slipped to -0.2 vs. last month's 7.1 and views for 3.9.

Industrial Production rose 0.2% m/m vs. last month's 0.7% and estimates for 0.1%. Manufacturing Output rose 0.2% as well vs. last month's upwardly revised 0.8% (from 0.6%), and expectations for 0.2%. The Capacity Utilization Rate came in at 76.3%, in line with last month's upwardly revised 76.3% (originally 76.2%).

And the Housing Market Index rose to 38 vs. last month's 37 and the consensus for the same.

Today we'll get the Housing Starts and Permits report, and the Pending Home Sales Index.

The 2-day FOMC Meeting begins today. The Fed will give their decision on rates tomorrow afternoon at 2:00 ET. Virtually nobody is expecting the Fed to cut rates tomorrow (only a 0.9% likelihood that they cut). But those odds increase to 23.1% in June, 37.9% in July, 49.5% in September, 56.2% in October, and 66.5% in December. (Fed Chair Jerome Powell's term ends in May, and the new nominee, Kevin Warsh, is expected to push for cuts in the first couple of months he's at the helm.) Mr. Powell will also hold his customary Press Conference on Wednesday afternoon shortly after the announcement (2:30 ET).

In the meantime, we'll see if the market can build on yesterday's gains.

See you tomorrow,