Dow futures drop 260 points after stunning rebound, while global stocks edge higher as Russia-Ukraine conflict roils markets
Vadim Zamirovsky/AP
- Dow Jones futures fell Friday but global stocks rallied as Russian troops advanced on Ukrainian cities.
- US stocks pulled off a stunning comeback Thursday despite Russian President Vladimir Putin ordering troops into Ukraine.
- But uncertainty continued Friday, with oil, gold and bonds rising as investors tried to gauge the impact of war.
US stock futures fell Friday as uncertainty about the Russia-Ukraine conflict continued to grip investors, a day after equities staged a remarkable comeback despite the outbreak of war.
Dow Jones futures were 260 points or 0.78% lower, while S&P 500 futures had fallen 0.85% and Nasdaq 100 futures were down 0.9%.
However, Asian and European stocks rebounded after sharp falls on Thursday, as global volatility cooled somewhat following wild trading the previous day.
Oil prices rose slightly, with Brent crude trading at around $100 a barrel. Prices shot up on Thursday as Russia — one of the world's biggest energy suppliers — invaded Ukraine, before paring their gains later in the day.
Russia's invasion of Ukraine, ordered by President Vladimir Putin, rocked financial markets around the world Thursday as analysts and traders raced to gauge the likely impact on the global economy.
European stock markets cratered, with the continent-wide Stoxx 600 falling 3.3%. Brent crude oil shot past the $100 mark for the first time in seven years, and Russia's benchmark MOEX stock index plunged 33%.
US stocks initially opened deeply in the red as investors awaited the details of the White House's sanctions against Russia.
However, they later pulled off a stunning recovery, and the S&P 500 finished 1.5% higher after falling as much as 2.6%. Analysts pointed to the fact that the sanctions left Russia's energy industry largely untouched, cooling the rise in oil prices and concerns about inflation.
"The fact that oil stopped going parabolic ally higher helped turn the whole market around yesterday," Deutsche Bank's Jim Reid said.
Oil prices edged higher Friday, however, as Russian troops advanced on Ukrainian cities, including the capital Kiev.
Brent crude was up 1.07% to $100.14 a barrel, trading around a seven-year high, having hit $105.79 on Thursday, before settling at $99.08. WTI crude was 0.67% higher at $93.40 a barrel, also a seven-year high.
Europe's continent-wide Stoxx 600 rebounded somewhat Friday, up 1.11%, while London's FTSE 100 was 1.45% higher after tumbling 3.9% the previous day. China's CSI 300 closed 0.97% higher, while Japan's Nikkei 225 rallied 1.95%.
Yields on US government bonds, which move inversely to prices, dropped as investors bought the safe-haven assets, although European bonds were little changed. The yield on the key 10-year US Treasury note was down 2.3 basis points to 1.949%.
Gold, another safe-haven asset, rose 0.38% to $1,910.88 an ounce, having shot as high as $1,974 on Thursday. The dollar index was little changed at 97.17.
Russian troops were advancing on Kiev on Friday morning local time, as Ukrainian President Volodymyr Zelensky called on international allies to do more to sanction Putin's regime.
Uncertainty was the watchword for global investors. US President Joe Biden said he was prepared to impose further sanctions, after imposing measures against five major Russian banks and members of the country's ruling elite.
Mark Haefele, chief investment officer at UBS Global Wealth management, said the worst-case scenario "is that the conflict escalates to a level that pushes Western nations to accept disruption to Russia's energy flow." Energy supply blockages could send inflation soaring even further in Europe and the US.
However, Loris Calvasina, head of US equity strategy at RBC, said she still expects the S&P 500 to rally 17% this year from Thursday's close.
"Our sentiment analysis, and our work showing how quickly stocks tend to recover from growth scares, are telling us to be on the lookout for a positive inflection in the stock market, even if it is not at hand just yet," she said.
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