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Dow futures fall more than 300 points as oil prices spike to 13-year high on Russia-Ukraine war

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Trader working at the New York Stock Exchange, U.S.A, March 2, 2022. REUTERS/Brendan McDermid

Brendan McDermid | Reuters

U.S. equity contracts fell Monday evening after the U.S. Oil price surged to its highest level since 2008, amid ongoing Russian-Ukraine war.

Dow futures lost 331 points, or 0.9%, while S&P 500 futures and Nasdaq 100 futures slid 1.3% and 1.8%, respectively.

West Texas Intermediate crude futuresThe U.S. benchmark for oil traded at 10%. It reached $127.66 a barrel one point, before easing back. International benchmark brent crudeThe price of, was 9% higher at $128.60. This is also the highest recorded prices since 2008.

Antony Blinken Secretary of State said Sunday that USA and its allies may ban Russian oil and natural-gas imports to counter Ukraine’s aggression. Gas prices surged to their highest levelAAA states that since 2008 the average nationwide price of a gallon has exceeded $4.

Planned evacuations from the cities of Mariupol and Volnovakha Saturday were canceled after Russia violated a cease-fire agreementThe fighting continued within and around the two cities. Mariupol City Council stated Sunday that Russia had again violated a second attemptAt a temporary cease fire that would allow its civilians leave.

Friday’s Dow plunged 179 points or 0.5% to its fourth consecutive loss week. The S&P 500 lost 0.7% and closed more than 10% from its record close, a technical correction. Nasdaq Composite fell 1.6%.

Investors continued to watch developments in Ukraine’s war with Russia, which had a significant impact on sentiment despite some positive U.S. economic data.

“Investors aren’t really just jumping out and exiting, what they’re doing is rotating from Europe to the U.S., from cyclicals to big cap defensive type names,” Lindsay Bell, Ally’s chief markets and money strategist, told CNBC’s “Closing Bell.” This is a good sign, but we need to watch for re-rotation into riskier and more growing areas in order to confirm that the risk-on mechanism is still active.

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As oil prices rose, energy stocks were the bright spot on the market. Occidental Petroleum was up 17%. Meanwhile, bank stocks – which benefit from higher interest rates – were lower as the benchmark 10-year Treasury fell to around 1.73%.

European stocks were down sharply and finished the week 7% lower, marking their worst stretch since March 2020. VanEck Russia ETF is one of few Russia-linked funds that still trades. fell 2% to finish the week down more than 60%.

Investors shouldn’t be surprised by the positive data provided by the U.S. Labor Department. Friday was a good day for the economy, according to the Bureau of Labor Statistics. added 678,000 jobs in February. According to Dow Jones, economists had expected a monthly job gain of 440,000. However, the unemployment rate fell to 3.8%.

For the week, the Dow and S&P 500 slid about 1.3%. The Nasdaq Composite suffered a loss of 2.8%.

“This is an example of people wanting to be defensive over the weekend, and not wanting to own risk as we’re seeing the situation unfold, so the bond market completely ignored the jobs report,” Jeff Sherman, DoubleLine Capital deputy chief investment officer, said on “Closing Bell” Friday. The Treasury market isn’t focusing on backward-looking data right now, but it is examining the Ukraine crisis.

Several economic data reports are scheduled to be released throughout the coming week, including the Consumer Price Index for February, due Tuesday. This indicator will show that inflation is continuing to rise rapidly. could keep the stock market volatile in the week ahead.

Wednesday is the expected date for JOLTS’ February Job Openings Survey and Labor Turnover Survey.

Earnings are expected to be quieter this week. DocuSign and CrowdStrike are some of the major tech companies that will report. Rivian Automotive and Ulta Beauty, as well as Bumble, will be reporting.

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