Stock futures fall slightly as oil prices jump
U.S. stock market index futures dipped in early morning trading on Wednesday as oil prices gained and bond yields touched a fresh multi-year high. Dow Jones Industrial Average futures were down about 140 points, or 0.4%. S&P 500 futures declined 0.5%, and Nasdaq 100 futures slipped 0.8%. The benchmark 10-year U.S. Treasury yield topped 2.41% at its session high Wednesday, the highest since May 2019. Famed activist investor Carl Icahn said Tuesday an economic downturn could be coming. “I think there could very well could be a recession or even worse,” Icahn, founder and chairman of Icahn Enterprises, said on CNBC’s “Closing Bell Overtime” to Scott Wapner. Still, the S&P 500 is only 5% off its record and all three averages are on track to close the month higher. Wall Street is coming off a strong session Tuesday in which the Dow jumped more than 250 points and the S&P 500 climbed 1.1%. The Fed last week raised interest rates for the first time since 2018 and forecast a plan to hike rates by a quarter-point at each of the remaining six meetings of 2022. Powell appeared to up the rhetoric even more on Monday, when he promised to take tough action on inflation. “The labor market is very strong, and inflation is much too high,” the central bank chief told the National Association for Business Economics on Monday. “If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so.” Meanwhile, traders digested the latest news on the Ukraine-Russia war. Ukrainian President Volodymyr Zelenskyy called for more pressure on Russia from other countries as the conflict appears to be entering a stalemate. Shares in Japan led gains among major Asia-Pacific markets on Wednesday, as investors monitored oil prices and continued to assess the outlook for U.S. Federal Reserve monetary policy. Japan’s Nikkei 225 rose 3%, closing at 28,040.16 as shares of SoftBank Group jumped 7.22%, while Fast Retailing climbed 5.21%. The Topix index advanced 2.33% to 1,978.70. In Hong Kong, the Hang Seng index jumped 1.21% to close at 22,154.08. The Hang Seng Tech index gained 2.05% to 4,749.12. Mainland Chinese stocks closed higher, with the Shanghai composite advancing 0.34% to 3,271.03 and the Shenzhen component rising 0.73% to 12,408.65. South Korea’s Kospi gained 0.92% on the day to 2,735.05. Oil prices rose on Wednesday as a reported drop in U.S. crude inventories increased concerns about tight global supplies amid the hit to Russian exports from economic sanctions. Brent crude futures climbed $3.17, or 2.75%, to $118.69 per barrel, after falling 14 cents in the previous session. U.S. West Texas Intermediate (WTI) crude futures stood $2.73 higher at $112 a barrel, after losing 36 cents on Tuesday. Gold prices gained on Wednesday as investors looked to shield against soaring inflation and uncertainty caused by events in Ukraine, with a pullback in U.S. bond yields also offering support. Spot gold rose 0.6% to $1,932.28 per ounce by 6:58 a.m. ET. U.S. gold futures climbed 0.6% to $1,932.90.