U.S. stock index futures eased yesterday with retail sales data and minutes of the Federal Reserve’s last meeting on investors’ radar, while Western skepticism over Russian claims of a pullback of some troops near Ukraine kept caution in the air.
While Russia said more of its forces surrounding Ukraine were withdrawing on Wednesday, NATO said it was yet to be convinced. Kyiv, meanwhile, hinted at Russian involvement in a cyber-attack on Ukraine’s defense ministry website.
News of the pullback had seen the NASDAQ surge 2.5% on Tuesday, while the S&P 500 and the Dow Jones each ended more than 1% higher. Shares of big banks edged lower, while those of major growth names Apple Inc., Google-owner Alphabet Inc., Amazon.com Inc., Microsoft Corp, Meta Platforms Inc. and Tesla Inc. were mixed after rallying strongly in the previous session.
Meanwhile, drugmaker Moderna’s chief executive Stephane Bancel said in a CNBC interview that it is “reasonable” to assume that the final stages of the pandemic may be near.
Dow Jones Industrial Average
The Dow Jones Industrial Average lost 0.16%. The best performers of the session on the Dow Jones Industrial Average were Walt Disney Company, which rose 1.05% or 1.63 points to trade at 156.35 at the close. Meanwhile, Procter & Gamble Company added 0.76% or 1.19 points to end at 158.01 and Nike Inc. was up 0.63% or 0.91 points to 146.49 in late trade. The worst performers of the session were Salesforce.com Inc., which fell 1.17% or 2.51 points to trade at 211.74 at the close. 3M Company declined 1.09% or 1.71 points to end at 155.63 and Goldman Sachs Group Inc. was down 1.07% or 3.89 points to 360.05.
NASDAQ 100
The NASDAQ index lost 0.11%. The top performers on the NASDAQ Composite were Hookipa Pharma Inc. which rose 54.48% to 2.070, Upstart Holdings Inc. which was up 35.65% to settle at 148.01 and Satellogic V Inc. which gained 27.51% to close at 7.230. The worst performers were Avenue Therapeutics Inc. which was down 48.69% to 0.313 in late trade, Masimo Corporation which lost 36.99% to settle at 144.20 and Baudax Bio Inc. which was down 26.78% to 4.6000 at the close.
Oil
Oil prices fell today as talks to resurrect a nuclear deal with Iran entered their final stages, but losses were capped by heightened tensions between top energy exporter Russia and the West over Ukraine. U.S West Texas Intermediate (WTI) crude was down $1.34, or 1.4%, at $92.32.
The oil market is locked in a tug of war between Iranian sanctions relief and Russian-Ukraine tensions. The United States is in "the midst of the very final stages" of indirect talks with Iran, aimed at salvaging a 2015 deal limiting Tehran's nuclear activities, State Department spokesperson Ned Price said on Wednesday.
A decision on salvaging the nuclear deal was said by France to be only days away on Wednesday and that it was up to Tehran to make the political choice, though Tehran called on Western powers to be "realistic" However, continuing tensions over a possible Russian invasion of Ukraine continues to support oil markets because of the potential disruption to energy supplies.
Precious and Base Metals
Gold prices gained today after a steady start on a Russian news report of mortar fire in eastern Ukraine that sent investors scurrying to safe-haven assets. Spot gold rose 0.3% to $1,874.55 per ounce, hovering near a June high of $1,879.48 hit on Tuesday, and having risen as much as 0.5% intraday. U.S gold futures gained 0.3% to $1,877.60.
Russian-backed separatists in eastern Ukraine accused government forces today of opening fire on their territory and said they were trying to establish if anyone had been hurt or killed. Ukraine denied these accusations. The report comes as Russia has amassed more than 100,000 troops close to Ukraine's borders, raising fears of an invasion.
Classic risk-off moves ensued late in the Asian session with equity index futures lower, gold and the yen higher. Traders are now waiting for any follow-through to see how this escalates. If Russia invades, then gold is likely to be catapulted higher, but to see a sharp reversal that sends gold markedly lower would likely require Russian troops to actually be seen leaving the border.
The U.S. dollar clawed background after reports of the attack and limited the gains for greenback-priced gold. Gold was also supported after minutes of the latest policy meeting signaled a less hawkish-than-feared Federal Reserve. Gold has been range-bound between $1,845 and $1,880 and should remain here until either geopolitical tensions have eased a little, or the Fed commits to showing that they are really still looking to remove liquidity and raise interest rates faster.
Higher interest rates tend to increase the opportunity cost of holding non-interest-paying gold, but a fall in U.S. Treasury yields supports the bullion. Spot silver fell 0.1% to $23.52 per ounce, platinum firmed 0.9% to $1,072.36, a three-month high, while palladium rose 1% to $2,303.36. Copper prices fell today as investors took a cautious stance amid growing Russia-Ukraine tension, while the dollar firmed, making greenback-denominated metals more expensive.
Traditional Agricultures
Soybean futures rallied yesterday, rising 2.3 percent to halt a two-day fall with the market underpinned by concerns that forecast rain may be insufficient to avert further drought damage to crops in Argentina and southern Brazil.
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