As U.S. equity futures fell late Sunday evening as U.S. oil prices rose to their highest level since 2008 amid the ongoing war between Russia and Ukraine, U.S. equity futures dipped.
The Dow lost 331 points, or 0.9%, while the S&P 500 futures and Nasdaq 100 futures both fell by 1.3% and 1.8%, respectively.
During the week, West Texas Intermediate crude futures, the U.S. benchmark for crude oil, traded upwards of 10%, reaching $130 per barrel at one point. However, it sagged back a bit. It is also the highest Oil Price since 2008 for Brent crude, an international benchmark, which traded 9% higher to $128.60.
The Minister of State for Foreign Affairs Antony Blinken said on Sunday, in retaliation for the country’s attack on Ukraine, that he and his allies may consider banning Russian oil and natural gas imports. AAA reports a spike in gas prices, with the national average averaging $4 per gallon, which is the highest level since 2008.
As a result of Russia’s violation of a cease-fire agreement on July 31 and continued fighting in both cities, it has been decided to cancel all planned evacuations from the cities Mariupol and Volnovakha on Saturday. The Mariupol City Council has announced that the Russian army has again violated the terms of a temporary ceasefire set up so that civilians could leave the city.
The Dow Jones Industrial Average fell 179 points, or 0.5%, on Friday, tying its fourth successive week of losses. Despite the drop of 0.7% and the closing of more than 10% from its record close, the S&P 500 has experienced a technical correction. Also, Nasdaq Composite lost 1.6% of its value.
The moves were made as investors remained closely following the developments in the war between Russia and Ukraine, which weighed heavily on sentiment despite the positive economic data released on Friday by the U.S.
Rather than just all of a sudden jumping out and getting out of the market, investors are switching from Europe to the U.S., away from cyclicals and towards bigger, defensive companies,” said Lindsay Bell, Ally’s chief markets and money strategist in a recent interview on CNBC’s “Closing Bell.” “That is a positive sign, but what we need to see is re-rotation back to the growthier, riskier areas of the market to show that the risk-on mode might
As oil prices began to rise, energy stocks in the market provided a bright spot. One of the biggest winners was Occidental Petroleum which rose by 17 percent. Furthermore, bank stocks, which are likely to benefit from higher interest rates, were down as the benchmark 10-year Treasury fell to around 1.73%.
This was the first time since March 2020 that European equities had been down sharply, ending the week with a 7% drop, marking their worst week since March 2020. Despite being one of the few Russia-linked funds still trading, the VanEck Russia ETF dropped 2% to end the week down more than 60%.
The positive data released by the United States Bureau of Labor Statistics (BLS) was not enough to convince investors to dismiss concerns about the ongoing conflict between Russia and Ukraine. According to the Bureau of Labor Statistics, there were 678,000 jobs in February, the most recent data available. It is estimated that Dow Jones economists had expected a job gain of 440,000 for the month of May. Accordingly, the unemployment rate decreased to 3.8%.
The Dow, S&P 500, and Nasdaq Composite fell by about 1.3% each for the week. It was a loss of about 2.8% for the Nasdaq Composite.
In Jeff Sherman’s view, the bond market ignored the jobs report completely because persons wanted to be defensive over the weekend, and in light of the unfolding situation, people did not want to run the risk that had been mentioned, Jeff Sherman, deputy chief investment officer at DoubleLine Capital, said on “Closing Bell” Friday. “The Treasury market right now is not focused on the backward-looking economic data; it’s focused on the situation in the Ukraine and the crisis we are currently facing.”
In the week ahead, several reports on the economy are scheduled to be released, including the Consumer Oil Price Index, which is scheduled for release on Tuesday. During the week ahead, the key indicator is likely to show that inflation remains on an upward trend, which will keep stock markets volatile.
In the coming days, the JOLTS survey, which measures job openings and labor turnover, or JOLTS, will be released.
This week’s earnings are likely to be quieter than last week’s. Several big technology companies are expected to report earnings, including Oracle, CrowdStrike and DocuSign. A number of other companies, including Rivian Automotive, Ulta Beauty and Bumble, will also be reporting.