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- Stock futures were little changed after a powerful rally Wednesday, while US oil surged to its highest in 14 years.
- The conflict in Ukraine intensified, and Western buyers shunned Russian crude oil as they "self-sanctioned."
- However, Fed Chair Jerome Powell soothed nerves in the stock market by backing a smaller increase in interest rates this month.
US futures were little changed on Thursday after equities staged a strong rally the previous day, while oil surged to a 14-year high as the Ukraine conflict intensified.
S&P 500 futures were down less than 0.1% at 5.10 a.m. ET in choppy trading, after the index powered 1.86% higher Wednesday. Dow Jones futures were roughly flat and Nasdaq 100 futures had were 0.26% lower after both indices also rose sharply the previous day.
Oil surged as the Ukraine conflict rocked the market. WTI crude, the benchmark US price, rose above $116 a barrel, its highest level since 2008, and was last up 2.34% to $113.22. Brent crude, the international benchmark, was up 2.35% to $115.60 a barrel. It earlier neared $120, its highest since 2012.
The latest leg higher came after Western buyers started shunning Russian oil in what traders have called "self-sanctioning." A decision by the OPEC+ group of oil-producing countries to stick to its steady pace of production increases, despite the conflict in Ukraine adding upward pressure to prices, has also been a key driver.
"The geopolitical tensions look set to push oil prices higher with Brent crude on track to breach $120 or even $125 as the next major resistance hurdles," said Victoria Scholar, head of investment at trading platform Interactive Investor.
Commodities prices, including wheat and metals, have surged as the result of the war. The S&P global commodities index hit a record high Thursday, having risen almost 40% in 2022.
In Europe, stock's slipped slightly after a solid rise the previous day, with the continent-wide Stoxx 600 index 0.17% lower. Asian stocks moved broadly higher overnight, with Japan's Nikkei 225 notching up a 0.7% gain.
Russia's invasion of Ukraine last week has unleashed what could become the bloodiest conflict in Europe since World War II. President Vladimir Putin's forces appeared to have seized their first major Ukrainian city, Kherson, a southern Black Sea port, last night. The shelling of major Ukrainian cities has been brutal, killing hundreds of civilians.
The invasion has caused turmoil in global financial markets, which have been highly volatile as traders have tried to work out the implications for the global economy.
However, US equities rallied sharply Wednesday after Federal Reserve Chair Jerome Powell told Congress he supported a quarter-point rise in interest rates this month. Analysts said his words alleviated fears of a half-point hike.
Powell said the likely effects of the conflict in Ukraine on the US economy "remain highly uncertain." Yet he said it would still be necessary to raise interest rates this year to tame red-hot inflation, adding the economy is looking strong.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said: "Equity markets may have taken some comfort from the Fed's assessment that the threat to growth from the war in Ukraine does not currently justify a change of course on monetary policy."
The yield on the key 10-year US Treasury note surged Wednesday, but was roughly flat Thursday at 1.876%, having opened at 1.725% the previous day. Bond yields rise as prices fall, and vice versa.
Russia's stock exchange remained close for the fourth day in a row, as authorities tried to limit the impact of the war on domestic assets.
However, London's stock exchange suspended trading in the depositary receipts — which represent shares — of several large Russian companies Thursday. That's after companies such as Sberbank, the country's biggest lender, plunged as much as 95% to as low as $0.01 the previous day.
from Business Insider https://ift.tt/8VQk0D5
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