U.S. stock futures pointed to losses at Wall Street’s start on Wednesday, as investors reassessed potential progress between Russia and Ukraine negotiators, and looked ahead to private-sector payrolls data due later.
How are stock-index futures trading?
S&P 500 futures
fell 0.4% to 4,606
Dow Jones Industrial Average futures
dropped 122 points, or 0.3%, to 35,068
lost 0.5% to 15,158
On Tuesday, the Dow Jones Industrial Average
rose 338.30 points, or 1%, to close at 35,294.19, rising for a fourth straight day. The S&P 500
gained 1.2% to finish at 4,631.60, exiting correction territory and marking its fourth straight gain, according to Dow Jones Market Data. The Nasdaq Composite
climbed 1.8% to end at 14,619.64, its second consecutive day of gains.
What’s driving markets?
Futures fell amid skepticism over reports of progress Tuesday between negotiators on both sides of the brutal war in Ukraine. Russia’s promise to “fundamentally” cut back operations near Ukraine’s capital and a northern city lifted equities, and took some steam out of commodity prices a day earlier.
Among the cautious voices heard, Ukrainian President Volodymyr Zelensky gave a wary nightly address to the nation on Tuesday. “We can call those signals that we hear at the negotiations positive,” he said. “But those signals don’t silence the explosions of Russian shells.”
Pentagon spokesman John Kirby said the U.S. had detected a small number of Russian ground forces backing away from Kyiv, but rather than a “real withdrawal” it looked like forces were just being repositioned. And airstrikes against Kyiv continued, he noted.
“Although markets appeared to believe peace is breaking out, the damage cannot be undone in a single day that has yet to yield a deal or even a cease-fire,” Michael O’Rourke, chief market strategist at JonesTrading, told clients in a note.
“Even when that cease-fire emerges, following the death and destruction [Russian President Vladimir] Putin has delivered, it would be naive to think sanctions will be immediately lifted and economic relations will pick up where they left off,” said O’Rourke. He added that the war has neither really held back U.S. stocks, with the S&P 500 9.6% higher than its close on the day before the invasion.
Elsewhere, Germany triggered an early warning over its natural gas supplies, asking business and consumers to start cutting back, as Russia has been demanding rubles in payment for that commodity. European benchmark gas prices surged 13%.
Economic data will swing into focus, and setting the tone for Friday’s bigger jobs report, investors will get March ADP employment at 8:15 a.m. Eastern Time. That will be followed by a revision to fourth-quarter gross domestic product.
Economists surveyed by Dow Jones Newswires and The Wall Street Journal are forecasting a private-sector payrolls gain of 450,000.
“A strong reading is likely to trigger a risk-on rally for the US equities as investors will feel more comfortable with the Fed’s tightening of monetary policy. If the number misses the forecast and shows weakness, speculators are likely to punish the markets because they believe that the Fed is making another policy mistake,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.
In addition to data, markets will hear from Richmond Fed President Tom Barkin at 9:15 a.m. Eastern and Kansas City Fed President Esther George at 1 p.m. Eastern.
Investors are also keeping watch on the bond market after the yield on the 2-year Treasury note
traded briefly above the yield on the 10-year note
Tuesday afternoon, temporarily inverting the yield curve.
The phenomenon is widely viewed as an early warning signal of a potential economic downturn, though some analysts caution that it serves as a poor market timing tool. Yields were easing across the board for Wednesday.