Stock futures were little changed on Tuesday morning following the S&P 500’s worst day since October 2020, as investors remained on edge about surging oil prices and slowing economic growth amid Russia’s invasion of Ukraine.
Futures on the Dow Jones Industrial Average climbed just 30 points, or 0.1%. S&P 500 futures traded 0.1% higher and Nasdaq 100 futures dipped 0.1%.
The premarket action came after a steep sell-off on Wall Street where the S&P 500 dropped nearly 3% for its biggest one-day decline in more than a year. The blue-chip Dow tumbled almost 800 points for its fifth negative session in six, while the Nasdaq Composite, which contains many of the market’s biggest tech names, slid 3.6%, falling into bear market territory, down 20% from its record high from November.
“Sentiment is palpably negative,” Adam Crisafulli, founder of Vital Knowledge, said in a note. “Any hope/optimism that may have exited seems to have completely evaporated from the market and there’s NO interest to buy dips.”
Rising commodity costs in oil, regular gas, and precious metals like nicks and palladium is fueling concerns about a slowdown in global growth. Paired with soaring inflation, investors could be facing a risk off period.
Oil prices spiked to start the week with U.S. crude hitting a 13-year high of $130. WTI futures eventually settled Monday’s session up 3.2% at $119.40, the highest settle since September 2008. The price rose another 3.1% Tuesday morning to $123.15.
The international benchmark, Brent crude, reached a high of $139.13 at one point overnight before settling at $123.21 per barrel, its highest since July 2008. Brent most recently was up 3.4% to $127.36.
The national average for a gallon of regular gas rose to $4.173 on Tuesday, according to AAA. The prior record was $4.114 from July 2008, not adjusted for inflation.
Shares of Chevron and Exxon each rose about 1% in premarket trading. Plus, solar and other clean energy stocks moved higher in premarket trading as the continued rise in oil prices shifted focus toward alternative energy sources. Enphase Energy and SunPower each rose more than 3% in premarket trading.
Other commodity prices also resumed their push higher. Nickel prices on Tuesday briefly touched a new record above $100,000 a metric ton.
Futures for palladium, a key metal in the manufacture of electronics, jumped another 5% to $3.04 an ounce, while platinum futures rose nearly 3% to $1,149.70 an ounce.
Treasury yields also were sharply higher, with the benchmark 10-year note up close to 10 basis points to 1.85% as investors shed bonds as inflation fears escalate. Yields move opposite price.
Investors continued to monitor developments of escalated geopolitical tensions. Ukraine said Moscow is seeking to manipulate its cease-fire arrangement by only allowing Ukrainian civilians to evacuate to Russia and Belarus.
Shell apologized for buying cheap Russian oil and said it was divesting itself of all hydrocarbon holdings in the country. Russia itself warned that crude prices could hit $300 a barrel should Western countries enact a ban on exports. Shell shares rose 2% before the market open.
“There seems to be no evidence of improvements in Ukraine and the rhetoric out of DC continues to get more hawkish,” said Cliff Hodge, chief investment officer at Cornerstone Wealth. “While it’s impossible to know where the ultimate bottom may be, from a risk-reward standpoint, the market looks very reasonable.”
