Ongoing Russia-Ukraine Worries May Lead To Pullback On Wall Street

The major U.S. index futures are currently pointing to a lower open on Thursday, with stocks likely to move back to the downside following the substantial rebound seen in the previous session.

Lingering concerns about the ongoing Russia-Ukraine conflict may lead to a pullback on Wall Street, as peace talks between the countries resulted in little progress on key issues.

After speaking with his Russian counterpart, Ukraine Foreign Minister Dmytro Kuleba said no progress had been made on Ukraine’s proposal for a 24-hour ceasefire or the establishment of a humanitarian corridor to and from the besieged city of Mariupol.

A rebound by the price of crude oil may also weigh on Wall Street, with crude for April delivery spiking $4.50 to $113.20 a barrel after plunging by more than 12 percent on Wednesday.

Meanwhile, shares of Amazon (AMZN) are likely to be in focus after the online retail giant announced a 20-for-1 stock split and a $10 billion stock buyback.

On the U.S. economic front, the Labor Department released a report showing consumer prices increased in line with economist estimates in the month of February.

After closing lower for four consecutive sessions, stocks showed a substantial move back to the upside during trading on Wednesday. The major averages all moved sharply higher on the day, with the tech-heavy Nasdaq posting a standout gain.

The major averages pulled back off their highs going into the close but remained firmly positive. The Dow jumped 653.61 points or 2 percent to 33,286.25, the Nasdaq spiked 459.99 points or 3.6 percent to 13,255.55 and the S&P 500 surged 107.18 points or 2.6 percent to 4,277.88.

A pullback by commodities prices contributed to the rebound on Wall Street, as the recent surge in prices had led to worries about even higher inflation.

Crude oil for April delivery plummeted $15 to $108.70 a barrel, while gold for April delivery plunged $55.10 to $1,988.20 an ounce.

The price of crude oil gave back ground as the U.S. has announced a ban on Russian energy imports but European allies declined to follow suit.

The U.K. and European Union have announced plans to reduce their dependence on Russian energy, although the moves are expected to be far less disruptive to global markets.

The markets also benefited from bargain hunting, as traders looked to pick up stocks at reduced levels following the recent weakness.

The tech-heavy Nasdaq ended Tuesday’s trading at its lowest closing level in a year, while the Dow fell to an eleven-month closing low and the S&P 500 dropped to its lowest closing level since last June.

Airline stocks extended the rebound seen in the previous session, driving the NYSE Arca Airline Index up by 6.8 percent. The index continued to recover after ending Monday’s trading at its lowest closing level in well over a year.

A continued jump in treasury yields also contributed to substantial strength among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index surging by 4.2 percent and 4.4 percent, respectively.

Chemical stocks also moved sharply higher over the course of the session, resulting in a 4 percent spike by the S&P Chemical Sector Index. The index rebounded after ending the previous session at a one-year closing low.

Semiconductor, housing and biotechnology stocks also saw considerable strength on the day, while energy and gold stocks pulled back along with commodities prices.

Commodity, Currency Markets

Crude oil futures are spiking $4.50 to $113.20 a barrel after plummeting $15 to $108.70 a barrel on Wednesday. Meanwhile, after plunging $55.10 to $1,988.20 an ounce in the previous session, gold futures are jumping $20.10 to $2,008.30 an ounce.

On the currency front, the U.S. dollar is trading at 116.02 yen versus the 115.83 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1070 compared to yesterday’s $1.1076.

Asia

Asian stocks rallied on Thursday after oil prices tumbled by the most in nearly two years and Ukraine’s president said one of Russia’s negotiating demands could be met.

Oil prices regained some footing in Asian trading after having fallen more than 12 percent in the previous session as two members of the OPEC oil cartel said they would support increasing production.

Chinese markets followed Wall Street higher after Ukraine said it is ready to make reasonable concessions to end the war. The benchmark Shanghai Composite Index jumped 39.70 points, or 1.2 percent, to 3,296.09, while Hong Kong’s Hang Seng Index ended up 262.55 points, or 1.3 percent, at 20,890.26.

Japanese shares surged the most in 21 months as the resumption of diplomatic talks between Russia and Ukraine boosted investor sentiment. The Nikkei 225 Index soared 972.87 points, or 3.9 percent, to 25,690.40, with 222 of its 225 component stocks advancing. The broader Topix closed 4 percent higher at 1,830.03.

Chemical company Showa Denko topped the gainers list to close 10.4 percent higher, while automakers such as Honda, Nissan, Toyota and Suzuki rallied 4-9 percent. Chipmakers Advantest, Renesas, Tokyo Electron climbed 4-5 percent.

Australian markets logged their best single-day gain in a month, with financials and tech stocks outperforming on hopes of some headway in Russia-Ukraine diplomatic talks.

The benchmark S&P/ASX 200 Index advanced 77.80 points, or 1.1 percent, to 7,130.80, marking its best session since February 9. The broader All Ordinaries Index ended up 79.10 points, or 1.1 percent, at 7,410.90.

The big four banks gained between 2.4 percent and 3.5 percent, a day after RBA Governor Philip Lowe said that it was “plausible” the central bank could hike interest rates in 2022.

Block Inc. shares surged 7.1 percent in the technology sector, while mining and energy stocks suffered heavy losses after a pullback in commodity prices.

Seoul stocks jumped as trading resumed after a day off for the country’s presidential election. The Kospi rallied 57.92 points, or 2.2 percent, to 2,680.32, snapping a three-day losing streak.

Market bellwether Samsung Electronics advanced 2.5 percent and No. 2 chipmaker SK Hynix added 1.7 percent. Internet portal operator Naver and Kakao both surged around 8.5 percent.

Europe

European stocks have pulled back sharply on Thursday after having seen strong gains in the previous session on hopes of some headway in Russia-Ukraine diplomatic talks.

While the U.K.’s FTSE 100 Index has slumped by 1.3 percent, the French CAC 40 Index is down by 2.6 percent and the German DAX Index is down by 3 percent.

Brewer Carlsberg has shown a substantial move to the downside on the day after suspending its 2022 financial guidance.

Rio Tinto has also moved notably lower after the miner said it was cutting all ties with Russian businesses. Evraz has also slumped after the steelmaker decided to cancel an interim dividend payment, citing the conflict in Ukraine.

German luxury fashion brand Hugo Boss AG has also come under pressure. The company reported that its fourth quarter net income attributable to shareholders surged to 70 million euros from last year’s 20 million euros.

On the other hand, shares of Capita have moved sharply higher after the outsourcer reported a swing to a pretax profit in 2021.

Hill & Smith Holdings has also jumped after the engineering services company reported a significant increase in pretax profit for 2021.

U.S. Economic Reports

Consumer prices in the U.S. increased in line with economist estimates in the month of February, the Labor Department revealed in a report released on Thursday.

The Labor Department said its consumer price index climbed by 0.8 percent in February after rising by 0.6 percent in January. The increase in prices matched economist estimates.

Excluding food and energy prices, core consumer prices rose by 0.5 percent in February following a 0.6 percent advance in January. The core price growth also met expectations.

The report also showed the annual rate of consumer price growth accelerated to 7.9 percent in February from 7.5 percent in January, reaching the highest rate since January 1982.

The annual rate of core consumer price growth also accelerated to 6.4 percent in February from 6.0 percent in January, showing the fastest growth since August 1982.

A separate report from the Labor Department showed a modest increase in initial jobless claims in the week ended March 5th.

The report showed initial jobless claims crept up to 227,000, an increase of 11,000 from the previous week’s revised level of 216,000.

Economists had expected jobless claims to tick up to 216,000 from the 215,000 originally reported for the previous week.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $20 billion worth of thirty-year bonds.

Stocks In Focus

Shares of Asana (ASAN) are moving sharply lower in pre-market trading after the collaboration software company reported better than expected fiscal fourth quarter results but provided disappointing guidance.

Chinese e-commerce giant JD.com (JD) may also move to the downside after swinging to a net loss in the fourth quarter amid slowing revenue growth.

On the other hand, shares of CrowdStrike (CRWD) are likely to see initial strength after the cybersecurity company reported fiscal fourth quarter results that beat estimates and offered a strong outlook.