U.S. stock futures stumbled in premarket trading Tuesday after a tech rally sent shares higher earlier in the week. Investors are watching the war in Ukraine and bracing for the possibility of new sanctions against Russia.
Contracts on the S&P 500, Dow Jones Industrial and Nasdaq Composite each fell about 0.2% ahead of the open after all three benchmarks closed on the green Monday. The Nasdaq — which was up 1.9% in the main session — was boosted by a 27% surge in Twitter (TWTR), which came after Tesla (TSLA) CEO Elon Musk announced he had taken a stake in acquired a 9.2% stake in the social media company.
Musk “talks to his money by saying Twitter is an undervalued platform,” MKM Partners’ Rohit Kulkarni told Yahoo Finance Live. “He sees that they can do things to improve the service and he’s definitely hinting at a more active role.”
Wedbush Securities analyst and Tesla bull Dan Ives also told Yahoo Finance he predicts Musk will have active involvement with the social media platform in the coming weeks or months, and that his recent stock purchase is “just the starter ” may be.
Separately, Musk’s own company, electric vehicle giant Tesla, contributed to the gains, which fueled a tech start during Monday’s trading session. Shares of the electric vehicle maker rose nearly 6% after it reported vehicle deliveries this weekend that were higher than the same period last year.
Recession fears were in check Monday after a closely watched portion of the government bond yield curve inverted last week, spooking investors at the possibility of an impending economic contraction. The phenomenon has historically predicted a recession, with each of the last eight slowdowns dating back to 1969, preceded by a yield curve inversion. As of Monday morning, the yield on the benchmark 10-year bond remained below that of the shorter-dated 2-year bond.
Still, concerns about an economic slowdown were not entirely off the table for strategists.
The story goes on
Nomura chief economist Robert Dent told Yahoo Finance Live he sees the potential for a “mild recession.”
“We think the cumulative risk of a recession is around 35% to 40% by the end of 2024,” he said of the Fed to actually get inflation under control and make sure the job market actually cools down.”
The uncertainty surrounding the Eastern European crisis is also continuing to create a headwind for investors. JPMorgan CEO Jamie Dimon warned in his widely read letter to shareholders that the war in Ukraine is likely to significantly slow the US and global economy. In the US specifically, the bank estimates that the US economy will grow by about 2.5%, a downgrade of the institution’s initial GDP forecast of 3%, with larger cuts to forecasts for Russia’s and Europe’s economic prospects.
“We don’t know how it will ultimately play out, but hostilities in Ukraine and sanctions on Russia are already having a significant economic impact,” Dimon said, adding that “many more” sanctions will be imposed on Russia and further unpredictability will be encouraged could .
The European Union on Monday addressed apparent war crimes in Ukraine, hinting in a statement that officials were “working on further sanctions against Russia” over the country’s targeting of civilians. Some key European officials, including Germany’s defense minister, said they would support a ban on Russia’s natural gas — a move previously barred from sanctions because Russia supplies about 40% of Europe’s gas energy.
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7:10 am ET: Stock futures slide, oil rises after Monday’s tech rally
Here were the key moves in futures trading ahead of Tuesday’s open:
S&P 500 Futures (ES=F): -10.50 points (-0.23%) to 4,567.25
Dow futures (YM=F): -83.00 points (-0.24%) to 34,746.00
Nasdaq futures (NQ=F): -37.75 points (-0.25%) to 15,126.50
raw (CL=F): +$1.28 (+1.24%) to $104.56 per barrel
Gold (GC=F): -$1.70 (-0.09%) to $1,932.30 per ounce
10-year government bonds (^TNX): 0.00bps gives 2.4120%
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6:12 pm ET Monday: Futures open little changed after stocks close higher
Here’s where the markets traded ahead of Monday’s overnight session:
S&P 500 Futures (ES=F): -2.25 points (-0.05%) to 4,575.75
Dow Futures (YM=F): -14.00 points (-0.04%) to 34,815.00
Nasdaq futures (NQ=F): -9.25 points (-0.06%) to 15,155.00
raw (CL=F): +$0.43 (+0.42%) to $103.71 a barrel
Gold (GC=F): +$3.30 (+0.01%) to $1,937.30 per ounce
10-year government bonds (^TNX): +3.5 basis points to yield 2.4120%
Screens show trading information for Twitter on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. April 4, 2022. REUTERS/Brendan McDermid
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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