Home » Dow futures fall 100 points amid Ukraine-Russia war, Covid fears in China

Dow futures fall 100 points amid Ukraine-Russia war, Covid fears in China

by News Times USA


U.S. stock futures fell Tuesday as investors continue to monitor developments in the Russia-Ukraine conflict along with a fresh Covid-19 spike in China.

Dow Jones Industrial Average futures dipped 119 points, or 0.4%. S&P 500 and Nasdaq 100 futures slid 0.3% and 0.1%, respectively.

A slew of energy names were under pressure in the premarket. Occidental Petroleum fell more than 5%, while Schlumberger and Halliburton each lost more than 4%. Shares of tech giant Apple also dipped 0.5%.

The city of Kyiv, Ukraine’s capital, has announced a 35-hour curfew that starts at 8 p.m. local time following Russian missile strikes. Russia and Ukraine were also set to resume talks on Tuesday. Meanwhile, Russia is approaching a series of deadlines to make payments on its debt.

Elsewhere, officials from the United States and China met on Monday to discuss a range of challenges facing their bilateral relationship, including Russia’s ongoing war in Ukraine.

“The market is jittery,” said Gene Goldman, chief investment officer at Cetera Investment Management. “So much concern about the Russian invasion, inflation, and the Fed. With growing concerns of a bear market, investors have been skittish.”

Still, he said he doesn’t feel a bear market is in the cards, saying, “a pullback/correction becomes a bear market if a recession is likely. Fundamental data (labor, construction spending, PMIs, etc.) all support a solid economic base.”

However, China is facing its worst Covid outbreak since the height of the pandemic, raising concern over the global economic recovery going forward.

Fed meeting kicking off

The Federal Reserve is slated to kick off an important two-day meeting Tuesday, with investors expecting a quarter-point rate hike to be announced Wednesday.

Mounting inflationary concerns will weigh on the Fed meeting. A lockdown in China could worsen supply chain issues, after a surge in coronavirus cases suspended production in cities such as Shenzhen, a key manufacturing city. The Russia-Ukraine conflict had already led to a spike in commodities prices.

“With both of these factors driving prices higher, the government has no choice but to increase rates to absorb the inflation that is accelerating,” said Benjamin Tsai, president and managing partner at Wave Financial Group.

There also will be adjustments to the economic outlook, projections for the future path of rates and likely a discussion about when the Fed can start reducing its bond portfolio holdings.



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