U.S. equity futures surged higher Tuesday, while oil prices tumbled and the dollar eased, as investors reacted to reports that Russia has pulled some of its troops from the Ukraine border amid what appears to be a de-escalation of tensions between the adjacent eastern European nations.
“This gives the grounds for cautious optimism, but so far we have not seen any sign of de escalation on the ground,” said NATO Secretary-General Jens Stoltenberg. “So far we have not seen any signs of reduced Russian military presence on the borders of Ukraine, but we will continue to monitor.”
Concerns over an imminent attack by Russia troops, and the impact of sanctions on the global economy if they were to commence, hit markets hard on Monday, pulling both the Dow and the S&P 500 into negative territory for the session, lifting gold prices to the highest levels in eight months and sparking an oil price rally that took U.S. crude past $95 for the first time since 2014.
Tuesday’s reports, as well as a planned visit between Germany’s Chancellor Olaf Scholz and Russian President Vladimir Putin, has markets back on course Tuesday, although the underlying pace of gains in Treasury bond yields, linked to bets on aggressive action from the Federal Reserve at next month’s policy meeting, continue to influence stock performance.
U.S. crude futures were marked $3.50 lower from Monday’s closing price to change hands at $91.96 per barrel while the U.S. dollar index, which tracks the greenback against a basket of six global currency peers, fell 0.3% to 96.07.
The CME Group’s FedWatch tool suggests a 61.8% chance of a 50 basis point rate hike at next month’s policy meeting, with a 38.2% chance of a quarter point move.
Russia Pullback, Intel, Peloton, Elon Musk and Warren Buffett – Five Things You Must Know
On Wall Street, futures tied to the Dow Jones Industrial Average are indicating a 450 point opening bell gain while those linked to the S&P 500, which is down 7.65% for the year, are priced for a 72 point advance.
Nasdaq Composite futures are indicating a 315 point gain for the tech-focused benchmark even as 10-year Treasury note yields hold at 2.033% in overnight trading, the highest levels since November of 2019.
Semiconductor-related shares are powering some of the Nasdaq’s pre-market gains, in fact, after Intel (INTC) – Get Intel Corporation Report agreed to buy foundry chip manufacturer Tower Semiconductor (TSEM) – Get Tower Semiconductor Ltd Report for around $5.4 billion.
Tesla (TSLA) – Get Tesla Inc Report shares are also on the move, and extending recent gains, after the release of Securities and Exchange Commission filings that show founder and CEO Elon Musk has increased his stake in the world’s most-valuable carmaker to around 21.2%.
Peloton Interactive (PTON) – Get Peloton Interactive, Inc. Class A Report shares moved higher, as well, following reports of a shake-up in senior management and the purchase of new stakes in the fitness equipment maker by major private equity investors.
In overseas trading, Europe’s Stoxx 600 was marked 1.3% higher by mid-day trading in Frankfurt while the region-wide MSCI ex-Japan benchmark edged 0.1% higher, ending its session prior to news of the Russian pullback.
Japan’s Nikkei 225 ended the session 0.79% lower at 26,865.19 points.
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