Stock Market Today-3/4: Stocks Fall As Russia Attacks Nuclear Plant
U.S. equity futures slumped lower Friday, while Treasury bond yields retreated sharply and oil extended gains to the highest levels in ten years, as Russian forces deepened their advance into Ukraine and seized the country’s largest nuclear reactor.
A fire was reported at the Zaporizhzhia compound, in eastern Ukraine, but with the plant now under control of Russian troops, indications of radiation leakage or any damage to the region’s largest reactor remain unreliable, adding new level of concern to the escalating conflict that has spiked commodity price increases in markets around the world.
President Joe Biden spoke with Ukrainian President Volodymyr Zelenskiy directly prior to the attack, the White House said in a statement, while US Energy Secretary Jennifer Granholm said there were no indications of elevated radiation readings, adding the reactors were “protected by robust containment structures and being safely shut down”.
OPEC’s decision earlier this week to stick to its previous plans to boost output by a mere 400,000 barrels per month in April has added to that concern, as has the prospect of a weekend inspection by International Atomic Energy Agency head Rafael Grossi to Tehran, where the nuclear watchdog has said stockpiles of of enriched uranium have exceeded terms of the country’s 2015 deal world leaders, threatening the revival of a pact with the U.S. government
WTI futures for April delivery were marked $2.48 higher at $110.15 per barrel while Brent contracts for the same month surged $2.12 to $112.62 per barrel, the highest in more than a decade.
Broader commodity prices, in fact, are seeing their largest year-to-date surge since in more than a century, according to Bank of America’s weekly ‘Flow Show’ report, with wheat prices at the highest since 2008 and record high levels for coal and aluminum.
European stocks are in the throes of their worst week in nearly two years, with the region-wide Stoxx 600 down 2.8% on the session to the lowest level of 2022. Japan’s Nikkei 225 closed 2.23% lower at 25,985.47 points, just 15 points ahead of its 2022 low.
On Wall Street, with investors focused on today’s February jobs report and its implications for next month’s Federal Reserve rate decision, stock futures were trading notably lower, but not at the overnight lows of the session. An elevated reading of the CBOE’s VIX volatility gauge, however, likely sets up a wild Friday session, with both the headline jobs report risk and further developments from the Russia/Ukraine war.
The February employment report is expected to show a net addition of 425,000 new jobs, a move that could put some downward pressure on wage growth but will likely peg the nation’s headline unemployment rate at around 3.9%, according to median forecasts.
Still, with average hourly earnings likely to have risen 0.5% from January, and 5.5% on the year, the Fed is still likely to see worrying wage increases that could extend or imbed the fastest rate of consumer price inflation in forty years deeper into the world’s biggest economy.
Futures contracts linked to the Dow Jones Industrial Average are priced for a 335 point opening bell decline, a move that would take the average to its lowest levels in around 8 months, while those linked to the S&P 500 are priced for a 42 point retreat.
Nasdaq Composite futures are indicating a 125 point slump for the tech-focused benchmark as 10-year Treasury note yields fell to 1.792% in overnight trading.
Costco Wholesale (COST) – Get Costco Wholesale Corporation Report shares were active in pre-market trading, falling 1.8% after it posted stronger-than-expected second quarter earnings but noted that supply chain disruptions and increased shipping costs would continue to pressure profit margins for the bulk discount retailer.
Tesla (TSLA) – Get Tesla Inc Report shares moved lower, as well, following Elon Musk’s decision to allow the United Auto Workers’ Union to hold a vote on membership at its California gigafactory, and just hours ahead of key decision on the the start of a new facility in Germany.
Gap Inc (GPS) – Get Gap, Inc. Report shares, however, surged 7% after the iconic clothing retailer posted a narrower-than-expected fourth quarter loss while forecasting solid 2022 profits as Covid-era restrictions on shopping and socializing come to an end.
