U.S. stock futures slump as investors weigh impact of latest Russia sanctions
U.S. stock-index futures tumbled Monday after President Vladimir Putin raised Russia’s nuclear alert level following stinging new sanctions from the West over the Russian invasion of Ukraine.
What’s happening
- Futures on the Dow Jones Industrial Average
YM00,
-1.21%
fell 439 points, or 1.4%, to 33535 - Futures on the S&P 500
ES00,
-1.38%
declined 1.6%, or 70 points, to 4310 - Futures on the Nasdaq 100
NQ00,
-1.34%
fell 1.4%, or 203 points, to 13977
Wall Street ended sharply higher Friday, on hopes of peace talks between Russia and Ukraine — though such hopes appear dimmer after the weekend. The Dow Jones Industrial Average
DJIA,
surged 834.92 points, or 2.5%, to close at 34,058.75, with the blue-chip gauge notching its best daily gain since early November 2020. The S&P 500
SPX,
rose 95.95 points, or 2.2%, to end at 4,384.65. The Nasdaq Composite Index
COMP,
added 221.04 points, or 1.6%, to finish at 13,694.62.
For the week, the Dow dipped by less than 0.1% while the S&P 500 rose 0.8% and Nasdaq Composite climbed 1.1%. The S&P 500 and Nasdaq benchmarks wiped out losses from earlier in the week.
Read: ECB says Russia bank subsidiary likely to fail
What’s driving markets
The U.S. and its allies on Saturday vowed to remove major Russian banks from the SWIFT interbank messaging network, effectively cutting them off from the global financial network. Some experts speculated about runs on Russian banks as the value of the ruble sinks against the U.S. dollar
USDRUB,
Tensions between Russia and the West ratcheted even higher Sunday after Putin put Russia’s nuclear forces on red alert in response to what he called “aggressive statements” by NATO. Meanwhile, Ukrainian forces continued to put up stuff resistance to Russian invaders, and Ukraine agreed to meet with Russia in Belarus for talks, though hopes for a quick resolution to the conflict appear slim.
The Central Bank of Russia hiked its key interest rate to 20% from 9.5% and halted stock market trading.
Oil prices continued to rise, with West Texas Intermediate crude
CLJ22,
and Brent crude
BRNJ22,
the global benchmark, again edging toward $100 a barrel. European stocks slumped on Monday.
“The crisis could have severe consequences on euro area growth via the energy, confidence, financial and trade channels, though we think fiscal policies will adapt to mitigate recession risks. The Fed seems unlikely to change direction at this point, though,” said strategists at U.K. bank Barclays.
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