Stock futures little changed after S&P 500 hits a death cross

Stock futures little changed after S&P 500 hits a death cross

Wall Street’s main benchmarks were near breakeven in pre-market trading Tuesday after stocks closed mostly lower to start the week. Investors continued to monitor the Russia-Ukraine war and braced for a key monetary policy decision due out of the Federal Reserve Wednesday that could place short-term interest rates above near-zero levels for the first time since 2018. A COVID outbreak in China also presented new headline risk for traders to digest.

Contracts on the S&P 500, Dow Jones Industrial Average and Nasdaq Composite ticked up slightly ahead of the open after the S&P 500 logged a “death cross” — when the 50-day moving average closes below the 200-day moving average. The Nasdaq extended its slide into a third day to cap the earlier session and the Dow rounded Monday out flat.

Commodities extended a streak of gyrations. WTI Crude Oil futures fellow below $100 to around $95 a barrel, 27.72% from record intraday high of $130.50 last week. Gold futures erased 1.8% to trade at $1,925.10 per ounce after recently topping $2,000.

“I fully expect crude oil is going to go back towards $40 or $50 a barrel,” Bloomberg Intelligence’s Mike McGlone told Yahoo Finance Live Monday. “From this war, I think we’re going to see a significant amount of demand destruction.”

China recorded a sharp rise in daily COVID-19 infections on Tuesday, with new cases more than doubling from a day earlier to hit a two-year high. The surge in infection raising questions about the economic cost of the country’s ultra-strict zero-COVID policy.

On the geopolitical front, Washington has warned Beijing against providing military or financial aid to Moscow following talks between US national security adviser Jake Sullivan and top Chinese diplomat Yang Jiechi in Rome.

Meanwhile, the Kremlin denied reports by US officials that said Russia requested military equipment from China after its invasion of Ukraine. Beijing called the reports “disinformation”.

In the US, markets may be little-shocked when central bank officials unveil the upshot of their two-day policy-setting meeting Wednesday after Federal Reserve Chair Jerome Powell reported in recent Congressional testimony that he supports an increase of 0.25%. But traders will watch closely for possible changes to the Fed’s outlook on hiking plans for the remainder of 2022 as war in Eastern Europe hangs over the global economy.

Although Russia’s invasion of Ukraine has curbed the chances of a 50-basis point hike this month, escalating geopolitical turmoil — with no off-ramp in sight — raises a new set of uncertainties for the US economy and complicates the Fed’s path forward on taming inflation .

US Federal Reserve Chair Jerome Powell is seen on a video screen as he testifies before a Senate Banking, Housing, and Urban Affairs Committee hearing on the Fed’s “Semiannual Monetary Policy Report to the Congress,” on Capitol Hill in Washington, US, March 3 , 2022. REUTERS/Jonathan Ernst/Pool

“All signs point to a quarter-point interest rate hike from the Federal Reserve when their meeting concludes Wednesday,” Bankrate chief financial analyst Greg McBride said in a note. “The questions revolve around how many more are to come and how quickly.”

“The war in Eastern Europe gives the Fed reason to act more cautiously, but they will still be working to corral what is already the highest inflation in 40 years,” McBride said.

Surging commodity prices that have fueled discussions around the possibility of economic slowdown, stagflation, or a potential recession place further pressure on policymakers already tasked with mitigating soaring price levels, according to David Norris, TwentyFour Asset Management head of US credit.

“Central bankers face a conundrum,” he said. “All things considered, I have no doubt this is one of the most important Fed meetings in recent memory given the current pace of market developments and the fluid nature of geopolitical events.”

7:00 a.m. ET: Contracts on S&P 500, Dow, and Nasdaq muted in pre-market trading

Here’s were the main moves in markets before the opening bell Tuesday:

  • S&P 500 futures (ES=F): +6.00 points (+0.14%) to 4,178.00

  • Dow futures (YM=F): +1.00 points (+0.00%) to 32,945.00

  • Nasdaq futures (NQ=F): +39.75 points (+0.30%) to 13,085.25

  • Raw (CL=F): -$6.31 (-6.13%) to $96.70 a barrel

  • Gold (GC=F): -$35.70 (-1.82%) to $1,925.10 per ounce

  • 10-year Treasury (^TNX): +0.00 bps to yield 2.1400%

6:00 pm ET Monday: Stock futures rise slightly after S&P 500, Nasdaq slide for third day

Here’s where stocks were trading ahead of the overnight session Monday:

  • S&P 500 futures (ES=F): +10.25 points (+0.25%) to 4,182.25

  • Dow futures (YM=F): +54.00 points (+0.16%) to 32,998.00

  • Nasdaq futures (NQ=F): +44.25 points (+0.34%) to 13,089.75

  • Raw (CL=F): -$0.85 (-0.83%) to $102.16 a barrel

  • Gold (GC=F): -$5.90 (-0.30%) to $1,954.90 per ounce

  • 10-year Treasury (^TNX): +13.6 bps to yield 2.1400%

Trader Peter Tuchman works on the floor of the New York Stock Exchange (NYSE) in New York City, US, March 1, 2022. REUTERS/Brendan McDermid

Trader Peter Tuchman works on the floor of the New York Stock Exchange (NYSE) in New York City, US, March 1, 2022. REUTERS/Brendan McDermid

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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