Ukraine row: US stock futures pare losses, oil prices steady

Bloomberg

US equity futures dropped as the Ukraine conflict and Western sanctions on Russia muddied the outlook for markets and the global economic recovery. Crude prices steadied after briefly halting a rally.
Contacts on the S&P 500 were down about 0.3% after paring earlier declines of more than 1%. Oil fluctuated, with benchmark West Texas Intermediate flipping to a gain while Brent crude fluctuated just under $100.
President Joe Biden imposed stiffer sanctions on Russia, promising to inflict a “severe cost on the Russian economy” after Moscow-led forces attacked military and civilian targets in Ukraine, triggering the worst security crisis in Europe since World War II. China urged Russia and Ukraine to negotiate to address problems, according to Chinese state TV.
Treasuries fell with the dollar, while gold was steady.
A prolonged conflict could deliver a major blow to global markets and slowing the normalisation of central bank policy that is expected this year.
Wall Street strategists cut their forecasts on European equities on concern that the war in Ukraine will hurt economic growth, with Goldman Sachs Group Inc expecting virtually no full-year returns.
A the same time, disruptions of raw materials and food could stoke already-high prices and heap pressure on central banks to act faster to curb inflation. Russia remains a commodity powerhouse and Ukraine is a major grain exporter.
“This conflict implies a further deterioration of the already tricky growth-inflation trade-offs central banks have been facing, making the upcoming decisions particularly hard,” Silvia Dall’Angelo, senior economist at the international business of Federated Hermes, wrote in a note to clients. “Downside growth risks from the geopolitical backdrop mean that they are likely to proceed gradually and cautiously.”
Penalties by the US and its allies spared Russia’s oil exports and avoided blocking access
to the Swift global payment
network. With flows of natural gas returning to Europe, prices reversed a record-breaking rally with the benchmark contract down as much as 28%.
Futures on the S&P 500 fell 0.3% in New York. Futures on the Nasdaq 100 fell 0.3%.
Futures on the Dow Jones
Industrial Average fell 0.4%. The Stoxx Europe 600 rose 2.1%. The MSCI World index rose 0.7%.
The Bloomberg Dollar Spot Index fell 0.2%. The euro rose 0.2% to $1.1212. The British pound rose 0.1% to $1.3394. The Japanese yen was little changed at 115.49 per dollar. The yield on 10-year Treasuries advanced three basis points to 1.99%. Germany’s 10-year yield advanced four basis points to 0.21%. Britain’s 10-year yield was little changed
at 1.45%.
West Texas Intermediate crude rose 0.7% to $93.50 a barrel. Gold futures fell 1.2% to $1,903.70 an ounce.