The mood remained gloomy in global equity markets as Brent crude oil hit its highest level in nearly eight years and metal prices rallied after Western sanctions disrupted the transportation of commodities. export base by Russia.
Wall stock indices closed sharply lower on Tuesday, with financial stocks the hardest hit as investors weighed the impact of tough sanctions on Russia following its invasion of Ukraine.
Morgan Stanley rose 1.0% in premarket trading, leading the gains among the big banks after two days of steep declines. Shares of energy companies resumed their ascent, with oil prices surging above $110 a barrel. [O/R]
The S&P 500 banking index is down 7% since the start of the week as US Treasury yields fell amid a flight to safe havens, while expectations of an aggressive policy tightening Fed seem to be easing. [US/]
Mr Powell will testify at 10 a.m. ET (1500 GMT) before the US House of Representatives Financial Services Committee and his comments on the economy in nearly five weeks will come up against a situation that has become significantly more complex since January. .
“Legislators from both parties will ask him about soaring prices, the latest corporate surveys and energy prices suggest there’s more inflation in the pipeline, and yet markets are cutting bonds tightening,” wrote Marios Hadjikyriacos, senior investment analyst at online brokerage XM in a note.
“Someone must be wrong here. We will find out today what really scares the Fed – geopolitical uncertainty or spiraling inflation.”
Traders now see a 5% chance of a 50 basis point rate hike by the Fed at its March meeting. [IRPR]
Russia said its forces have taken control of the first major city, seizing Kherson in southern Ukraine, as fighting rages in the country. The Kremlin has declared that its delegations are ready to organize a second round of negotiations with Ukraine.
Companies around the world announced they were cutting ties with Russia – Boeing Co suspended maintenance and technical support to Russian airlines, Apple Inc stopped selling iPhones and other products and the big oil company Exxon Mobil said it would leave the country.
As of 6:20 a.m. ET, Dow e-minis were up 172 points, or 0.52%, S&P 500 e-minis were up 23.75 points, or 0.55%, and Nasdaq 100 minis were up 99 points, or 0.71%.
Among other stocks, Nordstrom Inc jumped 30.9% after the department store chain reported upbeat full-year revenue and earnings.
Hewlett Packard Enterprise gained 5.8% after the hardware company raised its profit forecast for FY22 on strong demand and profitability.