Global stocks fell on Monday as tensions remained high over the Russian military buildup on Ukraine’s border, with officials in the West continuing to fear an imminent war in Eastern Europe.
U.S. stock and bond markets are closed Monday in observance of Presidents Day, but U.S. stock market futures continue to trade. Futures for the Dow Jones Industrial Average were 60 points or 0.2% lower; the index tumbled 232 points Friday to close at 34,079. S&P 500 futures were 0.2% into the red and futures for the Nasdaq were 0.5% lower.
Attention remains squarely focused on the prospect of Russia invading Ukraine. Russian troops have massed at the country’s borders in recent weeks amid Moscow’s objections to Ukraine’s possible membership in Nato, the Western defensive alliance.
“With markets already on edge at the end of last week, the increase in tensions over the weekend has merely served to put further downward pressure on markets, as violence in the eastern part of Ukraine ratchets up a notch,” said Michael Hewson, an analyst at broker CMC Markets .
Sentiment is being driven largely by headlines. U.S. officials said Sunday that they believed Russia had decided to invade Ukraine, which helped push stock market futures lower. An announcement of plans in principle for President Joe Biden and Russian counterpart Vladimir Putin to meet and seek a diplomatic resolution delivered some optimism, lifting U.S. futures early Monday. But gains were undone after a Kremlin spokesperson said it was “premature” to talk about specific summit plans.
From an investor perspective, one of the most important implications of the Ukraine crisis is how it would impact the supply of oil. Global crude supply is already tight and demand fundamentals are strong; prices were trading around seven-year highs before Russia ratcheted up the pressure on Ukraine.
Russia is one of the world’s largest producers of oil, so sanctions or any other restrictions on its supply from war has the potential to cause the price of the commodity to surge even further.
Oil prices were volatile Monday. After tumbling from around $93 to $90 on Sunday as fears of imminent war eased, futures for U.S. benchmark West Texas Intermediate Crude rebounded slightly, up 0.5% on the day to $91.50.
“In recent days and weeks, oil prices have bubbled higher in anticipation of the supply disruption that a Ukrainian conflict would bring,” said Russ Mould, an analyst at broker AJ Bell . “Further volatility looks almost a given at this stage.
The leading digital asset was up more than 2% over the past 24 hours and holding below $38,000, according to data from CoinDesk. The crypto slumped below the key $40,000 mark on Friday and went as low as around $38,100 over the weekend.
“Bitcoin is an unwilling participant in the volatility that is hitting all risky assets from Russia-Ukraine tensions,” said Edward Moya, an analyst at broker Oanda. “Bitcoin’s rollercoaster ride won’t end anytime soon, but it could get ugly if Wall Street sees a major selloff if investors begin to expect a prolonged military conflict.”
Here are three stocks on the move Monday:
Credit Suisse (ticker: CSGN.Switzerland) fell 2.5% in Zurich trading. The Swiss bank said it “strongly rejects” allegations of wrongdoing after media organizations reported a data leak revealing that the group had managed accounts for clients linked to crime and corruption. The group’s U.S.-listed stock was not trading Monday due to the Presidents Day holiday.
The Hong Kong-listed shares of Chinese tech giants Alibaba (9988.H.K.) and Tencent (0700.H.K.) fell 3.9% and 5.2%, respectively. Last Friday, China’s banking regulator scrutinized investment schemes related to the metaverse—an emerging tech space that both companies are pushing into.
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