US stock futures have fallen again after staging a remarkable comeback following the ongoing showdown between Russia and Ukraine.
US stock futures fell during the pre-trading session on Friday, February 25th, after initially staging a remarkable comeback. The recent slump came about as investors continue to assess the military strife between Russia and Ukraine.
Speaking on Russia’s invasion into Ukraine and the resulting financial ramifications, LPL Financial Chief Market Strategist Ryan Detrick said:
“Russia invading Ukraine has added to an already tense year, with investors selling first and asking questions later. But it is important to know that past major geopolitical events were usually short-term market issues, especially if the economy was on solid footing.”
Run-through of Stock Futures’ Performances
The ongoing tension between the two Eastern European countries has impacted the securities and products markets, sending stocks crashing and oil prices soaring. For instance, the Dow Jones Industrial Average futures declined by 211 points, while the S&P 500 futures dropped 0.65%. In addition, futures tied to the NASDAQ 100 dipped by 0.83%.
However, even though the S&P initially dipped to 2.6% during the session, it ended up closing 1.5% higher amid the Eastern European melee. In addition, the DJIA also ended the day about 90 points higher after. The increase happened despite initially succumbing to a session low of 859 points. Also, the tech-heavy NASDAQ Composite initially gave up 3.5% at its session’s lowest before reclaiming some ground to finish at 3.3%.
Besides US Stock Futures, Oil Prices Also Impacted
Despite initially spiking across the board, oil prices pared down, and eventually settled well as equities recovered. For example, Brent crude initially surged to a $100 price level for the first time since 2014. However, the global oil benchmark settled at a hair over $99 per barrel, which represents a 2.3% gain. In addition, the WTI oil benchmark ended the day at almost $93 per barrel. The close is a 0.77% increase, or 71 cents.
Cliff Hodge, CIO at Cornerstone Wealth, also weighed in on how the aftermath of the Eastern European skirmish impacts the markets. According to him:
“While there may be some additional volatility in the short term, these dislocation events historically present opportunities, as long as recession doesn’t follow. Higher energy prices will also support sticky inflation which may keep pressure on the Fed to stay on course.”
Russian Invasion of Ukraine
Early Thursday morning, Russian forces invaded Ukraine using a combination of airstrikes and shelling. According to Ukraine intelligence reports, the Russian military had the Chernobyl nuclear power plant site in their sights and eventually seized control.
Following the Russian incursion, US President Joe Biden convened a virtual meeting with other G-7 leaders. Biden has been vocal about his disagreement with Putin’s moves and has announced more sanctions against Russia. These sanctions specifically target the Russian financial system and may alienate the Eastern European superpower from the global economy. In addition, to strengthen its NATO allies’ ranks, the US government looks to deploy additional troops to Germany.