Wednesday March 9th


Dow futures jump more than 500 points as rally in commodity prices driven by Ukraine conflict eases

U.S. stock market index futures posted sharp gains early Wednesday as recently surging commodity prices cooled off while the war in Ukraine continues. Futures tied to the Dow Jones Industrial Average rose 560 points, or about 1.7%. S&P 500 futures climbed 1.9% and Nasdaq 100 futures gained 2.4%. The gains came amid an easing in commodity prices that have spooked the broader market. Energy and agriculture products in particular have catapulted higher amid the fighting in Ukraine, while some metals also have posted major gains. West Texas Intermediate crude, the U.S. oil benchmark, was last down 4% to around $118, while Brent crude, the international standard, fell 3.5% to around $123. Wheat futures also were sharply lower, falling 6.3% to $1,206 a bushel, though palladium continued its march higher, rising 3.8% to $3,082 per ounce. Silver, copper and platinum were all lower on Wednesday. Certain consumer-related stocks roared back on Wednesday in premarket trading, after weakness on fears that higher gas prices would dent consumer spending. Nike rose 4% before the bell and Starbucks added 2.6%. Airlines and cruise lines were also higher in extended trading. Treasury yields also climbed as investors focused on the overall trend of higher inflation. The benchmark 10-year note rose about 3.7 basis points to 1.91%. A basis point equals 0.01%. Bank stocks rose in premarket trading as yields rose. PNC Financial was up 5% and Wells Fargo rose more than 3%. Goldman Sachs and JPMorgan were 2% higher each. Pepsico shares rose 1.8% in premarket trading after the soft drink giant said it will suspend sales in Russia, though it will continue to sell snacks and essentials such as baby formula. Elsewhere, shares of dating service Bumble soared nearly 23% after it reported profit and expected growth that was much better than Wall Street expectations. The major averages all closed lower Tuesday after a day of whipsaw trading. The Dow gave up a 585-point gain to end the day lower by 184 points, falling deeper into its correction. The S&P 500 slid 0.7%, in correction territory. The Nasdaq Composite lost 0.2%, after entering bear market territory Monday. It remains to be seen if the Federal Reserve will manage a soft economic landing, but the U.S. should be able to avoid a recession, according to Ross Mayfield, investment strategy analyst at Baird. “The strength of the U.S. labor market, consumer and aggregate corporate sector should act as the weight to keep us out of recession near-term,” he told CNBC. “Overall, volatility is likely to persist, [there’s a] wide range of outcomes possible in Ukraine, but the fundamentals of the U.S. economy still look decent, especially if the Fed can navigate raising rates without breaking demand." Energy stocks were a bright spot in the market as oil prices continued to climb, jumping to their highs of the session as President Joe Biden announced a ban on Russian fossil imports, including oil, in response to the country’s invasion of Ukraine. That was after oil hit a 13-year high of $130 to start the week. Shares in Asia-Pacific were mixed on Wednesday, as markets in mainland China and Hong Kong struggled to recover from losses seen earlier in the week. The Shanghai composite in mainland China closed 1.13% lower at 3,256.39 and the Shenzhen component declined 1.122% to 12,107.17. The CSI 300 index, which tracks the largest mainland-listed stocks, shed 0.92% to 4,226.35. All three indexes had earlier fallen more than 3% each. Hong Kong’s Hang Seng index slipped 0.67% to close at 20,627.71. Elsewhere in Japan, the Nikkei 225 dipped 0.3% on the day to 24,717.53 while the Topix index was fractionally lower at 1,758.89. Over in Southeast Asia, Singapore’s Straits Times index gained 1.55%, as of 4:21 p.m. local time. Oil slipped towards $125 a barrel in volatile trading on Wednesday as investors assessed the U.S. ban of Russian oil imports and Russia announced a new ceasefire in Ukraine on Wednesday to let civilians flee. A view that the U.S. ban of Russian oil imports may not worsen shortages kept a lid on prices, traders said, as did talk that Ukraine was no longer seeking NATO membership after some news reports this week on the issue. “Maybe this is playing its part,” said Tamas Varga of oil broker PVM said of the Ukraine NATO membership issue. “The realization that the U.S. import ban might not materially make the current supply shock worse than it has been might have also triggered this bout of profit-taking,” he added. Brent crude fell $2.27, or 1.8%, to $125.71 a barrel at 1105 GMT, after earlier rising above $131. U.S. West Texas Intermediate (WTI) fell $3.19, or 2.6%, to $120.51. Gold and palladium on Wednesday hit the brakes on a blistering rally as riskier assets attempted a comeback, with analysts predicting another run higher for precious metals in case of a further escalation in the Ukraine crisis. Spot gold fell 1.6% to $2,018.98 per ounce by 7:39 a.m. ET, snapping a four-session rally that took it to within reach of the August 2020 all-time high. U.S. gold futures fell 0.9% to $2,024.00.