US stock futures declined and oil prices rose sharply as investors watched the developments surrounding the Russian invasion of Ukraine and waited for fresh inflation data.
S&P 500 futures were down 1% on Thursday, while the tech-focused Nasdaq-100 fell 1.4% and Dow Jones Industrial Average futures tumbled 0.6%. All three indices broke a four-day losing streak on Wednesday as oil prices eased from recent highs but remained above $100 a barrel for major US and international benchmarks.
White House press secretary Jen Psaki criticized Russian claims that the US was developing chemical weapons in Ukraine late Wednesday night, warning that it could be an excuse for Moscow to use such weapons itself. Some analysts said concerns about this may have added to market jitters on Thursday.
On Thursday, futures for Brent crude, the global oil benchmark, rose 5.2% to $116.93 a barrel. The US equivalent of West Texas Intermediate added 4.4% to $113.46.
Amazon.com shares rose 5.1% in premarket trading after the e-commerce giant’s board of directors approved a 20-for-1 stock split and authorized a buyback of up to $10 billion in common stock.
Overseas, the pan-continental Stoxx Europe 600 fell 1.7% after posting its biggest daily percentage gain since March 2020 on Wednesday. The index’s banking sector fell 3.4% on Thursday as investors worry about the European economy’s dependence on Russia, and many expect the euro zone’s central bank to refrain from raising interest rates because of the war.
“Yesterday there was this rally and profit-taking is already visible. There is very little confidence in this market,” said Agnes Belais, chief European strategist at Barings Investment Institute.
The euro fell 0.3% against the dollar on Thursday to $1.1041 per euro. The WSJ dollar index, which measures the dollar against a basket of currencies, rose 0.2%.
Traders on the New York Stock Exchange.
Photo: Courtney Crowe/Associated Press
Russia’s invasion of Ukraine has caused volatility in stocks, bonds, commodities and currencies as investors scramble to gauge the impact of sanctions and potential disruptions to trade and supply chains.
The Russian ruble traded at 117 rubles to the dollar in offshore trading on Thursday, according to FactSet, having strengthened against the dollar since Wednesday. Valuation of the ruble has become more difficult over the past two weeks as it has become more difficult for banks to fulfill buy and sell orders due to Western sanctions and capital controls imposed by Russia.
The Russian stock market has remained closed since February 25.
High oil prices have raised concerns that the US and Europe could experience sustained inflation and lower economic growth as higher energy prices eat into household spending on other goods and services. The US CPI data for February is due at 8:30 am Thursday, and economists are forecasting inflation to pick up further this month, hitting a four-decade high in January.
President Biden’s executive order on cryptocurrencies may have raised more questions than answers: what is a central bank digital currency? How is it different from cryptography? And why didn’t the Fed introduce a digital dollar? Explains Dion Rabouin of the WSJ. Photo composition: David Feng
The dollar value of Bitcoin fell more than 6% on Thursday from its 5:00 pm ET level on Wednesday to $39,212.83. The world’s largest cryptocurrency by market value surged on Wednesday as President Biden announced an executive order to study digital currencies, a move that was welcomed by the industry and denounced by skeptics as a delay in needed regulation. Analysts say bitcoin’s dollar value tends to track broader stock markets, exposing industry news.
In the bond markets, the benchmark 10-year Treasury yield was virtually unchanged from 1.946% on Wednesday. The yield on German 10-year bonds fell to 0.196% from 0.206% on Wednesday. Yields and prices change in the opposite direction.
Major stocks in Asia jumped, tracking Wall Street’s gains on Wednesday. China’s Shanghai Composite added 1.2%, South Korea’s Kospi jumped 2.2% and Japan’s Nikkei 225 rose 3.9%.
Email Caitlin Ostroff at [email protected]
Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8