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U.S. stock index futures traded sharply higher Tuesday morning after a Russian news agency reported that some troops were returning to base in a sign of decreasing tensions with Ukraine.
What are benchmarks doing?
-
Futures on the Dow Jones Industrial Average
YM00,
+1.21%
gained 390 points, or 1.1%, to 34,863. -
Futures on the S&P 500
ES00,
+1.54%
rose 1.5%, or 64 points, to 4,458. -
Futures on the Nasdaq-100
NQ00,
+2.08%
gained 2%, or 287 points, to about 14,542.
On Monday, the Dow
DJIA,
fell 172 points, or 0.5%, to 34566, the S&P 500
SPX,
dropped 17 points, or 0.4%, to 4402 and the Nasdaq Composite
COMP,
fell fractionally to end at 13791.
What’s driving markets?
Interfax reported the Russian Defense Ministry as saying that units of the southern and western districts are returning to base after completing their mission.
The troop withdrawal was reported to be roughly 10,000 of the 130,000 massed on Ukraine’s border, with German Chancellor Olaf Scholz arriving in Russia on Tuesday for talks with Russian President Vladimir Putin.
However, markets are still digesting the likelihood of a series of interest rates rises by the Federal Reserve starting in March to combat inflation which has risen to a 40 year high.
The “re-pricing of central bank expectations is the key driver of a good deal of the recent volatility,” said Michael Strobaek, global chief investment officer of Credit Suisse. “The geopolitical tensions, however, namely the escalation of tensions between NATO and Ukraine on the one side and Russia on the other, are less predictable, complicated and more difficult to price for markets.”
An armed conflict could lead global stock markets to drop more than 10%, he said.
Besides headlines involving Russia and Ukraine, there’s also data due Tuesday on U.S. producer prices, as well as the Empire State manufacturing index.
Which companies are in focus?
-
Shares of Marriott International Inc.
MAR,
+0.85%
rallied 3.4% into record territory in premarket trading Tuesday, after the hotel operator reported fourth-quarter adjusted profit and revenue that more than doubled to beat expectations, as revenue per available room (RevPAR) continued to improve as COVID-19 conditions eased. -
Intel Corp.
INTC,
-0.10%
on Tuesday struck a $5.4 billion deal to buy Tower Semiconductor, as it seeks to bolster its manufacturing capabilities. - Virgin Galactic shares SPCE jumped in premarket trade Tuesday, after the company said it is opening a limited opportunity for people to buy future spaceflight reservations on Feb. 16, for a total price of $450,000.
- Animal health company Zoetis Inc.’s shares ZTS jumped premarket Tuesday, after it beat estimates for the fourth quarter and offered upbeat revenue guidance for 2022.
How are other assets faring?
- Treasury yields continued to bounce Tuesday, with the yield on the 10-year Treasury note BX:TMUBMUSD10Y above 2%. Yields and debt prices move opposite each other.
- The ICE U.S. Dollar Index DXY, which tracks the currency against a basket of six major rivals, declined 0.3%.
-
West Texas Intermediate crude for March delivery CLH22 retreated 3.5% to around at $92.17 a barrel on the New York Mercantile Exchange. That was the highest front-month contract finish since Sept. 3, 2014. The April gold
GC00,
-0.92%
contract shed 1.1% to around $1,850.10 an ounce. - The Stoxx Europe 600 SXXP trade 1.3% lower, while London’s FTSE 100 UKX traded 0.7% higher.
- The Shanghai Composite SHCOMP ended 0.5% higher on Tuesday, while the Hang Seng Index HSI fell 0.8% in Hong Kong and Japan’s Nikkei 225 NIK declined 0.8%.
