Stock futures crept lower and oil prices gained as investors monitored tensions between Russia and Ukraine and awaited minutes from the Federal Reserve’s January meeting.
Futures for the S&P 500 edged down 0.2% Wednesday. The broad index rose Tuesday, snapping a three day losing streak, after Russia said it had pulled back some troops from the Ukrainian border. Contracts for the tech-focused Nasdaq-100 fell 0.2%, as did futures for the Dow Jones Industrial Average.
Uncertainty over escalation between Russia and Ukraine and how quickly the Federal Reserve might raise interest rates has led to heightened volatility in markets.
Russian President Vladimir Putin said Tuesday that Moscow had withdrawn some troops from the Ukrainian border, but European and U.S. officials said they hadn’t seen evidence of a significant drawdown. President Biden said an invasion remained “distinctly possible.” Separately, Ukraine’s Ministry of Defense and Armed Forces websites and online services of two state-owned banks were disrupted by suspected cyberattacks.
“Putin and Russia and Ukraine are clearly driving markets with a bit of a relief rally but it remains to be seen whether it’s short-lived or not,” said Carsten Brzeski,ING Groep’sglobal head of macro research. “Every new statement, every tiny piece of news, could push markets in either direction.”
Investors are awaiting minutes from the Fed’s January meeting, due at 2 p.m. ET, for insight on the debate over the path for rate raises. Last month, U.S. inflation accelerated to a 7.5% annual rate,another four-decade high, increasing expectations that the Fed may have to increase rates faster and more aggressively.
“You’ve got this backdrop of inflation, lack of confidence in central banks in being ahead of the curve, a non-orderly recovery in the global economy and supply lines and consumer demand and all that coming together is creating volatility,” said David Coombs, London-based head of multiasset investments at Rathbone Investment Management. Potential escalation between Russia and Ukraine is “the cherry on the top,” he added.
The threat is shaking up a fragile global oil market, which will likely add to inflationary pressures, Mr. Coombs said. Brent crude, the international oil benchmark, rose 1.1% to $94.30 a barrel Wednesday, while benchmark European gas futures fell almost 5%.
In bond markets, the yield on the benchmark 10-year Treasury note ticked up to 2.047% from 2.044% Tuesday. Yields rise when prices fall.
In premarket trading, shares of Airbnb jumped9% after the company posted record revenue.
Overseas, the pan-continental Stoxx Europe 600 added 0.3%. Major indexes in Asia closed higher. Japan’s Nikkei 225 jumped 2.2% and South Korea’s Kospi gained 2%. Hong Kong’s Hang Seng added 1.5% and mainland China’s Shanghai Composite rose 0.6%.
Earnings are due ahead of the U.S. market open from Kraft Heinz. Companies including Cisco Systems, American International Group and Nvidia are slated to post earnings after markets close.
Economists surveyed by The Wall Street Journal expect that retail sales data, due out at 8:30 a.m., will show a rebound in January, led by rising auto purchases and online orders.