US stock futures teetered on Friday as investors gauge the impact of the Ukraine war on commodity prices and inflation.
Futures linked to the S&P 500 fluctuated between small gains and losses, suggesting the index could float for the broader market after rising 1.4% on Wednesday. Nasdaq 100 futures were also largely flat, suggesting tech stocks could hold the previous day’s gains after the opening bell.
Stocks have rallied this week as the war in Ukraine stoked concerns about inflation and commodity supply disruptions amid mixed economic data. President Biden said the US would respond if Russia uses chemical weapons and called for the country’s expulsion from the G-20, fueling fears of further escalation. The S&P 500 has moved more than 1% each day since Tuesday this week and is currently up 1.3% for the week to date.
“Markets are trying to price something that’s basically impossible to price because part of what’s going on in the world depends on Putin’s thinking that no one knows,” said Fahad Kamal, chief investment officer at Kleinwort Hambros . “The longer the conflict lasts, the higher the positive side of inflation, the lower the negative side of growth. It’s massive, radically uncertain.”
The recent rebound in stocks has been fueled by investors buying into the decline, compounded by a bout of high inflation, he said. “Anytime there’s a significant drop, you see cash pouring in, and that has continued at a high rate. With inflation at 8%, cash is being crucified and needs somewhere to go,” Mr Kamal said.
Oil prices eased, with global benchmark Brent crude falling 1% to $114.12 a barrel. Brent is up around 7% this week as self-sanctioning measures by trading houses and refiners to avoid Russian oil began to seep into the market, traders said.
The yield on the benchmark 10-year Treasury bill rose to 2.363% from 2.340% on Thursday. It has risen 11 out of 14 of the past trading days. Bonds typically underperform during periods of high inflation because the value of fixed cash flows is eroded. Yields and prices move in opposite directions
A US consumer confidence survey for March is scheduled for release at 11:00 am ET. The metric has slipped in recent months as consumers, particularly low-income households, have expressed a more pessimistic outlook for the economy.
Overseas, the pan-continental Stoxx Europe 600 gained 0.2%.
Russian shares fell 3.5% on the day after the Moscow Stock Exchange partially reopened after a month-long shutdown, reversing part of Wednesday’s 4.4% gain. Gazprom slipped 9.4% and Russia’s largest lender Sberbank slipped 3.8%.
The ruble appreciated 3.5% against the dollar, trading at around 99 rubles to $1. Year-to-date, it’s down 24%.
In Asia, key benchmarks were mixed. Chinese stocks came under pressure as a US watchdog said the delisting of US-listed Chinese stocks was still on the table. The Shanghai Composite Index slipped 1.2% and Hong Kong’s Hang Seng Index fell 2.5%. Japan’s Nikkei 225 edged up 0.1%.
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https://www.wsj.com/articles/global-stocks-markets-dow-update-03-25-2022-11648197425?mod=rss_markets_main Stock futures fluctuate over Ukraine concerns