In a mirror image of yesterday’s overnight bounce, S&P futures and European markets have slumped to session lows as a risk off mood prevailed as US traders got to their desks having hit overnight highs of 4,399 just before the European open, as mood soured after the conflict in Ukraine intensified amid mounting penalties against Russia, and as participants look to a heavy data-docket ahead and Fed speak including Powell later in the week.
Any residual optimism was shattered after Ukrainian President Zelensky said that negotiations with the Russian side have not achieved required results while Russian Defense Minister Shoygu says Russia will continue operations in Ukraine until it achieves its goals. As a result, Nasdaq 100 contracts were down 0.9% as of 7 a.m. in New York after the cash index closed yesterday’s session with its second straight monthly decline, a trend not seen since October 2020. S&P 500 futures declined 0.7% or 30 points to 4,337 while Dow futures fell 0.7% or 230 points, reversing much of yesterday’s last hour ramp. Stocks trading in Moscow remained halted for a second day, and the VanEck Russia ETF plunged another 12%. Treasury yields fell for a second day to the lowest since January, and the dollar was steady. Brent crude jumped more than 5% as traders balanced the possible release of emergency stockpiles against fears of disruption to Russian energy exports.
Hopes of an early negotiated settlement over Ukraine faded after Russia vowed to continue its attack until its goals are met
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