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Traders globally were treading with caution after an aborted revolt by Russian mercenaries raised concerns over the stability of President Vladimir Putin and a potential disruption to Russian oil supply.
Shares of U.S. defense companies including Raytheon Technologies (NYSE:RTX) and Lockheed Martin Corp (NYSE:LMT) slipped about 1% each in thin premarket trading.
Oil stocks like Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) dipped as crude prices reversed early gains spurred by the revolt. [O/R]
“Geopolitical events have caused markets to take a ‘tread carefully’ approach to start the week,” Tim Waterer, chief market analyst at KCM Trade said in a note to clients.
“And while events in Russia over the weekend seem to have calmed down again for the time being, it has had the effect of putting safe-haven assets back on the radar.”
A recent rally in U.S. stocks sputtered last week after Fed Chair Jerome Powell’s testimony in which he signaled more interest rate hikes ahead but vowed the central bank would proceed with caution.
Most policymakers see at least two more quarter-point rate increases by the end of this year, while traders expect one more rate hike in July and see the Fed holding rates steady through the end of 2023, according to CMEGroup’s Fedwatch tool.
The tech-heavy Nasdaq snapped its eight-week winning streak on Friday, its longest since March 2019, while the benchmark S&P 500 broke its five-week rally, its longest since November 2021.
A slew of economic data including a key inflation gauge, durable goods and University of Michigan’s consumer sentiment index will be released this week. Powell is also set to speak again later this week.
At 5:39 a.m. ET, Dow e-minis were down 9 points, or 0.03%, S&P 500 e-minis were down 4.5 points, or 0.1%, and Nasdaq 100 e-minis were down 29.5 points, or 0.2%.
Alphabet (NASDAQ:GOOGL) Inc slipped 1.6% premarket after UBS downgraded the stock to “neutral” from “buy”, while Tesla (NASDAQ:TSLA) Inc fell 2.1% after Goldman Sachs (NYSE:GS) cut the electric car maker’s rating to “neutral”.
Moderna (NASDAQ:MRNA) Inc rose 3.1% after UBS upgraded the vaccine maker’s stock to “buy”.
