Stock futures rise as oil surges past $110 a barrel; Jerome Powell heads to the Capitol; SoFi stock jumps one earnings beat; and Major League Baseball is canceled, for now.
Here are five things you must know for Tuesday, March 2:
1. — Russia Intensifies Attacks Against Ukraine
U.S. equity futures moved higher on Wednesday following Tuesday’s steep declines while oil prices surged past $110 a barrel as fighting between Russia and Ukraine entered its seventh day and President Joe Biden stressed unity in the west’s response against Moscow.
Russian forces resumed airstrikes on central Kharkiv, Ukraine’s second-largest city and continued pounding other cities as they sought to break the will of Ukraine’s resistance on the seventh day of the war unleashed by President Vladimir Putin.
President Biden used his State of the Union address to warn his Russian counterpart that “he has no idea what is coming,” suggesting the U.S. could back further sanctions. Biden also said that Russian President Vladimir Putin was “isolated from the world more than he has ever been” as well as announcing that American airspace would be closed off to Russian flights.
“He thought he could divide us at home in this chamber and this nation. He thought he could divide us in Europe as well,” Biden said. “But Putin was wrong. We are ready. We are united.”
On Wall Street, futures linked to the Dow Jones Industrial Average are priced for a 172-point opening bell gain following Tuesday’s more than 600-point drop, while those linked to the S&P 500 are priced for a 20.25-point gain.
Nasdaq Composite futures are indicating a 69.5-point gain for the tech-focused benchmark as 10-year Treasury note yields held at 1.746% in overnight trading.
2. — Oil Prices Surge, Stoking Inflation Fears
The cost of a barrel of oil pushed higher on Wednesday, with Brent crude — the global benchmark for oil prices — hitting $112 a barrel, its highest level since in a decade, even after the International Energy Agency (IEA) released supply from its reserves in an effort to keep a lid on prices.
Brent crude jumped 7.1% to settle at $104.97. Members of the International Energy Agency agreed Tuesday to release 60 million barrels from oil reserves in an attempt to tackle surging oil prices.
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Brent crude climbed $7 a barrel, or 7.1%, to $104.97. Benchmark European natural-gas prices jumped over 24%. Members of the International Energy Agency agreed Tuesday to release supplies from oil reserves in an effort to keep a lid on rising crude prices.
Energy companies’ stocks gained alongside oil prices, with Occidental Petroleum (OXY) – Get Occidental Petroleum Corporation Report rising $3.06, or 7%, to $46.79 and Chevron (CVX) – Get Chevron Corporation Report adding $5.72, or 4%, to $149.72. Refiners balked at buying Russian oil, while banks are refusing to finance shipments of Russian commodities, according to oil executives, bankers and traders.
Russia is the single biggest gas exporter and a major supplier of crude oil.
3. — Powell Preps to Give Update to Congress
Federal Reserve Chair Jerome Powell is scheduled to deliver a monetary policy update before the U.S. House Financial Services Committee on Wednesday and appear in front of Senate Banking Committee members Thursday in meetings that could offer hints on the Fed’s position ahead of its March 16 policy setting meeting.
Powell is due to deliver his semiannual monetary policy testimony to the House at 10 a.m. ET on Wednesday, and then to the Senate at the same time on Thursday. The Russia-Ukraine crisis has prompted Wall Street to dial down its expectations for Fed action.
Powell is now tasked with telling Congress that the central bank will be doing more to control inflation at a time when markets expect it will be doing less.
Investors will also be looking at employment data from ADP due out Wednesday, as well as mortgage application numbers.
4. — SoFi Stock Soars on Earnings Beat and Outlook
Shares of SoFi Technologies (SOFI) – Get SoFi Technologies Inc Report jumped in premarket trading Wednesday after the financial-technology company reported earnings that exceeded expectations and provided a strong forward outlook.
SoFi posted a fourth-quarter net loss of $111 million, or 15 cents a share, wider than the net loss of $82.6 million, or $1.85 a share, it posted in the year-earlier quarter but better the 16-cent loss expected by analysts polled by FactSet.
Revenue rose to $285.6 million from $171.5 million, above the $279 million expected by FactSet analyst estimates. The company said it added a “record” of 523,000 new members during the fourth quarter.
SoFi recently won approval for a national banking charter, and the company expects that incremental net interest income from its SoFi Bank will “only contribute nominally” to its results for the first quarter.
For the first quarter, SoFi anticipates $280 million to $285 million in adjusted net revenue, which is a non-GAAP metric. The company also offered a range for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of breakeven to $5 million.
5. — Baseball Is Canceled, for Now
Major League Baseball canceled the first two series of the 2022 regular season on Tuesday after the league and the players’ union failed to reach a new collective bargaining agreement.
After nearly a year of negotiating, including nine straight days of talks between the league and the union in Florida starting Feb. 21, the sides could not come to a new pact by M.L.B.’s self-imposed deadline of 5 p.m. Tuesday in order to begin the 162-game season on March 31 as scheduled.
M.L.B. Commissioner Rob Manfred announced the cancellations in a news conference on Tuesday at Roger Dean Stadium, where the Cardinals and Marlins would usually be having spring training but instead hosted the talks.
“I had hoped against hope I wouldn’t have to have this press conference where I am going to cancel some regular season games,” Manfred said. “I want to assure our fans that our failure to reach an agreement was not due to a lack of effort by either party.”
The 2022 spring games are the first to be canceled or postponed because of a work stoppage since the 1994-’95 players’ strike, which resulted in the loss of more than 900 games, including the 1994 World Series.
