US equity futures inched higher in pre-market trading Tuesday after a sell-off in the earlier session that saw the Dow Jones Industrial Average fall into correction territory and the Nasdaq enter a bear market. Investors continued to jettison stocks and stockpile safe-haven assets as concerns about the economic consequences of Russia’s war in Ukraine intensified.
Futures tied to Wall Street’s main benchmarks rose Tuesday morning. Contracts on the S&P 500 ticked up 0.48% to 4,218.75, and the Dow edged 0.45% higher to 32,929.00. Nasdaq futures moved up slightly by 0.20% to 13,347.25.
Meanwhile, Nickel trading was suspended on the London Metal Exchange (LME) Tuesday after its price spiked above $100,000 per metric ton thanks to a short-squeeze on the commodity driven by supply concerns over the Russia-Ukraine war.
Energy prices spiked over the weekend and into Monday amid talks Western nations may add an import ban on Russian crude oil to their growing list of financial penalties against Moscow. Reuters reported the US may follow through on however without the participation of allies in Europe after President Joe Biden held a conference call with the leaders of France, Germany and the United Kingdom Monday seeking their support for a Russian oil ban.
Russian energy products comprise only 7.9% of total petroleum imports, including crude oil, in the US, but European countries rely more heavily on Russian crude oil and natural gas for energy.
WTI crude oil futures marked their most volatile day of 2022 on Monday — oscillating nearly 13%, while Brent crude oil futures hit $137 per barrel, the highest price since July 2008. Meanwhile, gold futures rallied past $2,000 per ounce for the first time in 18 months.
“What we’re seeing is the reminder that volatility is a feature of financial markets,” Brown Brothers Harriman chief investment strategist Scott Clemons told Yahoo Finance Live. “I would be very nervous about energy, not only because of how it’s done, but as a reminder, geopolitical unrest like this can lead to a spike in oil prices — and they can be quite scary — but they can also resolve rather quickly. “
“We’re seeing a lot of energy companies that have run away far on the upside anticipating not just elevated prices of the underlying commodity but extended elevated prices,” Clemons said. “That is certainly a possible outcome if this prolongs and disruptions continue, but oil can go right back down as quickly as it went up if there is a quicker resolution to these unrests in Ukraine than markets currently anticipate.”
The exacerbating crisis in Ukraine has raised worries a dent in global trade flows and further supply chain disruptions could push inflation even higher. The Bureau of Labor Statistics’ latest CPI print due out Thursday could show an annual jump of as much as 7.9%, according to consensus economist estimates.
The geopolitical turmoil is expected to derail the Federal Reserve from an aggressive first bump in interest rates — investors had previously considered the likelihood of a 50 basis point rate hike — with Fed Chair Jerome Powell signaling a potential move of 0.25% at the Fed’s policy meeting on March 15 and 16 in congressional testimony last week.
“Of course, a policy mistake is possible, but we believe the Fed will manage interest rate adjustments with the economic impacts of the war in Ukraine,” Comerica Wealth Management Chief Investment Officer John Lynch said in a note. “Fed Chair Jerome Powell appears poised to tackle inflation and is prepared to take the steps necessary to support consumers from surging energy prices.”
7:44 am ET: Nickel trading suspended on LME after price skyrockets on supply worries
Nickel trading was suspended on the London Metal Exchange (LME) Tuesday after its price spiked above $100,000 per metric ton thanks to a short-squeeze on the commodity driven by supply concerns over the Russia-Ukraine war.
“Following further unprecedented overnight increases in the 3-month nickel price, the LME has made the decision to suspend trading for, at minimum, the remainder of today,” the exchange said in a statement.
“The LME, in close discussion with the Special Committee, has been monitoring the LME market and the effect of the evolving situation in Russia and Ukraine,” the LME added. “It is evident that this has affected the nickel market in particular, and given price moves in Asian hours this morning, the LME has made this decision on orderly market grounds.”
The price of nickel, used in stainless steel and lithium-ion batteries, more than doubled Tuesday after a 70% surge on Monday as traders with large short positions scrambled to cover their positions. Russia’s position as the third largest nickel producer in the world has placed pressure on supply of the commodity.
7:35 a.m. ET: Shell to withdraw entirely from Russian oil and gas amid attack on Ukraine
Energy giant Shell said it will and suspend its service stations in the country. The company also issued an apology after buying in charge of the commodity last week.
“We are acutely aware that our decision last week to purchase a charge of Russian crude oil was not the right one and we are sorry,” Shell Chief Executive Officer Ben van Beurden said.
The move by the UK-based oil and gas conglomerate adds to a growing list of companies banning Russian crude oil and comes as US officials discuss an import ban.
Last week, Shell vowed to withdraw from all Russian operations, including the flagship Sakhalin 2 LNG plant, 50% owned and operated by Russian gas group Gazprom, in which it holds a 27.5% stake. London-based oil and gas company BP has also recently abandoned its 19.75% stake in Russian oil giant Rosneft.
7:00 a.m. ET: Futures tied to S&P 500, Dow, and Nasdaq turn higher ahead of open
Here’s were the main moves in markets in early trading Tuesday:
S&P 500 futures (EN=F): +20.25 points (+0.48%) to 4,218.75
Dow futures (YM=F): +147.00 points (+0.45%) to 32,929.00
Nasdaq futures (NQ=F): +26.50 points (+0.20%) to 13,347.25
Raw (CL=F): +$3.29 (+2.76%) to $122.69 a barrel
Gold (CG=F): +$18.00 (+0.90%) to $2,013.90 per ounce
10-year treasury (^TNX): 0.00 bps to yield 1.7510%
6:04 pm ET Monday: Stock futures edge lower after earlier sell-off
Here’s where stocks were trading heading into the overnight session Monday:
S&P 500 futures (EN=F): -8.25 points (-0.20%) to 4,190.25
Dow futures (YM=F): -48.00 points (-0.15%) to 32,734.00
Nasdaq futures (NQ=F): -37.00 points (-0.28%) to 13,283.75
Raw (CL=F): +$1.35 (+1.13%) to $120.75 a barrel
Gold (CG=F): +$6.10 (+0.31%) to $2,002.00 per ounce
10-year treasury (^TNX): +2.7 bps to yield 1.7510%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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