Dow Futures Down 150 Points; Ukraine Developments, Fed Speakers in Focus

© Reuters

By Peter Nurse    

Investing.com — U.S. stocks are seen opening lower Monday, handing back some of the previous week’s outsized gains, with investors keeping a wary eye on the developments in Ukraine and a series of Fed speakers a few days after the central bank started its tightening cycle.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 150 points, or 0.4%, S&P 500 Futures traded 10 points, or 0.2%, lower and Nasdaq 100 Futures dropped 60 points, or 0.4%.

Wall Street’s three main indexes notched up last week their largest weekly percentage gains since early November 2020 with the Dow climbing 5.5%, the S&P 500 adding 6.2% and the Nasdaq rising 8.2%.

This followed the Federal Reserve delivering on Wednesday its first rate hike since 2018 along with an encouraging assessment of the U.S. economy. This is widely expected to be the first of a series of hikes, with the central bank pointing to increases at its remaining six meetings this year.

Fed Chair Jerome Powell is set to speak about the economic outlook later Monday, the first of his two outings this week, while several other Fed officials are also due to make speeches during the week.

Investors will be looking for the thoughts of these leading Fed officials, given the concerns over stubbornly high inflation, sky-high commodity prices and few signs of an end to the conflict in eastern Europe.

A Kremlin spokesman said Monday that peace talks have not progressed enough for a meeting between the Russian and Ukrainian presidents to take place. This comes after Ukraine rejected a Russian demand that its forces lay down their arms and leave the besieged southern port of Mariupol. 

The economic data slate is largely empty Monday, but the week as a whole will feature reports on durable goods orders, initial jobless claims, both new and pending home sales, as well as services and manufacturing PMI data.

In corporate news, Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) announced earlier Monday it plans to purchase Alleghany Corporation (NYSE:Y) in an all-cash deal valued at $11.6 billion.

Boeing (NYSE:BA) will also be in the spotlight after a 737 airliner, but not one of the troubled 737 MAX range, operated by China Eastern Airlines (NYSE:CEA) crashed, killing 132 people. 

Nike (NYSE:NKE) is scheduled to release quarterly results after the close Monday, and the sportswear giant’s sales could suffer from the powerful cocktail of rising Covid-19 cases in China, the Russia-Ukraine crisis and lingering supply issues.

Oil prices jumped Monday as the EU meets to consider whether to join the United States in imposing an oil embargo on Russia as the sanctions already levied on Moscow for its invasion have yet to persuade Russian President Vladimir Putin to stop the fighting.

This would be an economically tough choice, as the EU relies on Russia for 40% of its gas, with Germany the most dependent of the bloc’s large economies.

By 7 AM ET, U.S. crude futures traded 4.5% higher at $107.73 a barrel, while the Brent contract rose 4.3% to $112.55.

Additionally, gold futures fell 0.2% to $1,925.95/oz, while EUR/USD traded 0.1% higher at 1.1060.