Stock futures edged higher early Wednesday as investors continued to assess rising commodity prices and high inflation as the war in Ukraine rages on.
Futures for the Dow Jones Industrial Average rose 353 points, or about 1.1%. S&P 500 futures rose, while Nasdaq 100 futures also rose 1.1%.
All major indices closed lower on Tuesday after a day of choppy trading. The Dow Jones lost 585 points and by the end of the day was down 184 points, or 0.5%, deepening into a correction. The S&P 500 lost 0.7%, also entering correction territory. The Nasdaq Composite shed 0.2% after entering bear market territory on Monday.
Market volatility was fueled by uncertainty among investors as they continued to assess the rise in prices for commodities such as oil, gasoline, natural gas and precious metals. This reinforced fears of a slowdown in global growth amid rising inflation.
It remains to be seen if the Federal Reserve succeeds in achieving a soft economic landing, but the US should be able to avoid a recession, said Ross Mayfield, an investment strategy analyst at Baird.
“The strength of the US labor market, consumer and corporate sectors should keep us out of recession in the near term,” he told CNBC. “Overall, volatility is likely to continue. [there’s a] A wide range of outcomes is possible in Ukraine, but the fundamentals of the US economy still look decent, especially if the Fed can raise rates without disrupting demand.”
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Energy stocks were a bright spot in the market as oil prices continued to rise, rebounding to session highs when President Joe Biden announced a ban on imports of Russian minerals, including oil, in response to the country’s invasion of Ukraine. This comes after oil hit a 13-year high of $130 earlier in the week.
Prices for other commodities resumed their rise, including nickel, which hit a new record above $100,000 per metric ton.
Treasury yields also surged, with benchmark 10-year bonds gaining nearly 10 basis points to 1.85% as inflation worries forced investors to dump bonds.
Gains continue Wednesday as Campbell Soup, Crowdstrike and Marqeta are all set to report.
In terms of economic data, investors are looking forward to home buying data from the Mortgage Bankers Association, as well as jobs and turnover data, or JOLTS.