S&P 500 futures rise slightly after worst selloff since 2020

S&P 500 futures were slightly higher on Tuesday morning after the benchmark’s worst day since October 2020 as investors remained jittery over soaring commodity prices and slowing economic growth stemming from Russia’s invasion of Ukraine.

S&P 500 futures traded up 0.1%, while Nasdaq 100 futures fell 0.1%. Dow Jones Industrial Average futures added 48 points, or 0.1%.

The premarket action came after a strong sell-off on Wall Street, where the S&P 500 fell nearly 3% for its biggest one-day decline in more than a year. The blue-chip Dow fell nearly 800 points for its fifth negative session in six, while the Nasdaq Composite, which contains many of the biggest tech names in the market, slipped 3.6%, falling into bearish territory. , down 20% from its November record.

Rising prices for oil, gasoline, natural gas and precious metals like nickel and palladium are fueling fears of slowing global growth. Coupled with runaway inflation, investors could face a risk-free period.

“The Russia/Ukraine conflict, commodity price spikes, inflation fears and the Fed’s very uncertain outlook
caused a rapid intensification of recession fears and a sharp sell-off in equity markets,” Chris Senyek, chief investment strategist at Wolfe Research, said in a note.

WTI crude jumped about 4% to nearly $124 a barrel on Tuesday as NBC News reported that the United States was set to ban Russian oil as early as Tuesday.

Oil prices soared at the start of the week, with U.S. crude hitting a 13-year high at $130.

International benchmark Brent crude hit a high of $139.13 at some point overnight before settling at $123.21 a barrel, its highest since July 2008. Brent has recently risen by 3.4% to $127.36.

The jump in crude is already starting to hit consumers’ wallets. The national average for a gallon of regular gasoline rose to $4,173 on Tuesday, according to AAA. The previous high was $4.114 since July 2008, not adjusted for inflation.

Shares of Chevron and Exxon each rose about 1% in premarket trading. Additionally, solar and other clean energy stocks rose in pre-market trading as the continued rise in oil prices shifted focus to alternative energy sources. Enphase Energy and SunPower each rose more than 3% in premarket trading.

The prices of other raw materials have also resumed their ascent. Nickel prices briefly touched a new high above $100,000 per metric ton on Tuesday.

Futures for palladium, a key metal in electronics manufacturing, jumped another 5% to $3.04 an ounce, while platinum futures rose nearly 3% to $1,149.70 per ounce.

Treasury yields were also significantly higher, with the benchmark 10-year note rising almost 10 basis points to 1.85% as investors dumped bonds as inflation fears escalated. Yields move opposite the price.

Investors continued to monitor developments in escalating geopolitical tensions. Ukraine said Moscow was seeking to manipulate its ceasefire agreement by allowing only Ukrainian civilians to evacuate to Russia and Belarus.

Shell apologized for buying cheap Russian oil and said it was divesting all the country’s hydrocarbon holdings. Russia itself has warned that crude prices could hit $300 a barrel if Western countries enact an export ban. Shares of Shell rose 2% before the market opened.

“There appears to be no evidence of improvement in Ukraine and DC’s rhetoric continues to become more hawkish,” said Cliff Hodge, chief investment officer at Cornerstone Wealth. “While it’s impossible to know where the ultimate bottom is, from a risk-reward perspective, the market looks very reasonable.”

S&P 500 futures rise slightly after worst selloff since 2020

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