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Dow futures fall 400 points as oil prices hit 13-year high in Russian-Ukrainian war

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., March 2, 2022. REUTERS/Brendan McDermid

Brendan McDermid | Reuters

U.S. stock futures fell late on Sunday as the price of U.S. oil hit its highest level since 2008 amid the ongoing war between Russia and Ukraine.

Dow futures lost 400 points, or 1.19%, while S&P 500 and Nasdaq 100 futures slid 1.5% and 1.91%, respectively.

West Texas Intermediate crude futures, the U.S. oil benchmark, traded up 10%, hitting $130 a barrel at one point before falling slightly. The international benchmark, Brent, traded up 9% to $128.60, also the highest prices seen since 2008.

Secretary of State Antony Blinken said Sunday that the United States and its allies are considering banning imports of Russian oil and natural gas in response to the country’s attack on Ukraine. Gas prices hit their highest level since 2008, with the national average topping $4 a gallon, according to AAA.

Planned evacuations of the towns of Mariupol and Volnovakha on Saturday were called off after Russia breached a ceasefire agreement and fighting continued in or around the two towns. The Mariupol city council said on Sunday that Russia had again violated a second attempt at a temporary ceasefire that would allow its civilians to leave.

On Friday, the Dow Jones fell 179 points, or 0.5%, to notch its fourth consecutive week of losses. The S&P 500 has lost 0.7% and closed more than 10% since its record close, a technical correction. The Nasdaq Composite fell 1.6%.

The moves came as investors continued to monitor developments in the Russia-Ukraine war, which weighed heavily on sentiment despite positive US economic data released on Friday.

“Investors aren’t just jumping in and out, what they’re doing is moving from Europe to the US, from cyclicals to large-cap defensive-type names,” said Lindsay Bell, Ally’s Chief Markets Officer and Financial Strategist on CNBC’s “Closing Bell.” “It’s a positive sign, but what we’re going to have to see is this shift towards the more dynamic and riskier areas of the market to show that risk mode may be back.”

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Energy stocks were a bright spot in the market as oil prices rose. Occidental Petroleum gained a whopping 17%. At the same time, bank stocks – which benefit from higher interest rates – were down, with the benchmark 10-year Treasury falling to around 1.73%.

European stocks fell sharply and ended the week down 7%, marking their worst period since March 2020. ETF VanEck Russia, one of the few Russia-linked funds still trading, fell 2% to end the week down more than 60%.

The positive data from the US Department of Labor was not enough for investors to ignore concerns about the war between Russia and Ukraine. On Friday, the Bureau of Labor Statistics reported that the economy added 678,000 jobs in February. The monthly job gain exceeded economists’ expectations of 440,000, according to Dow Jones. The unemployment rate slipped to 3.8%.

For the week, the Dow Jones and S&P 500 slipped about 1.3%. The Nasdaq Composite lost around 2.8%.

“This is an example of people wanting to be defensive over the weekend and not wanting to take any risk as we see things unfold, so the bond market completely ignored the jobs report,” he said. said Jeff Sherman, deputy chief investment officer of DoubleLine Capital. , said on “Closing Bell” on Friday. “The Treasury market right now isn’t focusing on backward-looking economic data, it’s looking at the current crisis we’re facing, the situation in Ukraine.”

Several economic data reports are expected to be released over the coming week, including the Consumer Price Index for February, due Tuesday. The key indicator should show that inflation continues to rise sharply, which could keep the stock market volatile over the coming week.

The February Job Openings and Labor Turnover Survey, or JOLTS, is due Wednesday.

A calmer income week is on deck. Some big tech names like Oracle, CrowdStrike, and DocuSign should report. Rivian Automotive, Ulta Beauty and Bumble will also report.