US stock futures ease as investors watch war in Ukraine and await key data on private sector payrolls

U.S. stock futures pointed to early losses on Wall Street on Wednesday as investors reassessed potential progress between Russian and Ukrainian dealmakers and eagerly awaited private sector payroll data due later.

How are stock index futures traded?
  • S&P 500 ES00 futures contracts,
    -0.24%
    fell 0.4% to 4,606

  • Futures contracts Dow Jones Industrial Average YM00,
    -0.22%
    fell 122 points, or 0.3%, to 35,068

  • Nasdaq-100 NQ00 futures,
    -0.36%
    lost 0.5% to 15,158

On Tuesday, the Dow Jones Industrial Average DJIA,
+0.97%
rose 338.30 points, or 1%, to close at 35,294.19, up for a fourth straight day. The S&P 500 SPX,
+1.23%
gained 1.2% to end at 4,631.60, breaking out of correction territory and marking its fourth consecutive gain, according to Dow Jones Market Data. The Nasdaq Composite COMP,
+1.84%
climbed 1.8% to end at 14,619.64, its second consecutive day of gains.

Read: S&P 500 Exit Correction: Here’s What History Says Next to the U.S. Stock Market Benchmark

What drives the markets?

Futures fell amid skepticism over reports of progress on Tuesday between negotiators on both sides of Ukraine’s brutal war. Russia’s promise to “fundamentally” scale back operations near the Ukrainian capital and a northern town sent stocks higher and commodity prices lower a day earlier.

Among the cautious voices heard, Ukrainian President Volodymyr Zelensky delivered a cautious address to the nation on Tuesday. “We can call these signals that we are hearing during the negotiations positive,” he said. “But these signals do not silence the explosions of Russian shells.”

Pentagon spokesman John Kirby said the United States had detected a small number of Russian ground forces moving away from kyiv, but rather than a “true withdrawal” it looked like the forces had just moved in. be repositioned. And the airstrikes against Kyiv continued, he noted.

War in Ukraine: Skepticism grows over Russia’s promise to cut some operations

“Although the markets seem to believe that peace is breaking out, the damage cannot be undone in a single day that has not yet resulted in an agreement or even a ceasefire,” said Michael O’Rourke , chief market strategist at JonesTrading, to clients in a Note.

“Even when this ceasefire emerges, after the death and destruction [Russian President Vladimir] Putin kept his promises, it would be naive to think that sanctions will be immediately lifted and economic relations will pick up where they left off,” O’Rourke said. He added that the war did little to dampen US stocks, with the S&P 500 9.6% higher than its close the day before the invasion.

Elsewhere, Germany has raised an early warning about its natural gas supplies, asking businesses and consumers to start cutting back as Russia demanded rubles as payment for the product. European benchmark gas prices jumped 13%.

Economic data will be in focus and will set the tone for Friday’s larger jobs report, investors will get the ADP jobs in March at 8:15 a.m. EST. This will be followed by a revision to the fourth quarter gross domestic product.

Economists polled by Dow Jones Newswires and the Wall Street Journal forecast a gain of 450,000 jobs in the private sector.

“A strong reading is likely to trigger higher risk for US equities as investors feel more comfortable with the Fed tightening monetary policy. If the figure beats the forecast and shows weakness, speculators are likely to punish the markets because they think the Fed is making another policy mistake,” Naeem Aslam, chief market analyst at AvaTrade, said in a statement. note to customers.

Along with the data, markets will hear from Richmond Fed President Tom Barkin at 9:15 a.m. ET and Kansas City Fed President Esther George at 1 p.m. ET. ‘Is.

Investors are also watching the bond market after the performance of the TMUBMUSD02Y 2-year Treasury note,
2.322%
briefly traded above the yield of the 10-year note TMUBMUSD10Y,
2.419%
Tuesday afternoon, temporarily inverting the yield curve.

The phenomenon is widely seen as an early warning signal of a potential economic downturn, although some analysts warn it is a poor market timing tool. Yields fell across the board for Wednesday.

CL00 crude price,
+2.60%
rose 1.9% to $106.26 a barrel, recouping Tuesday’s losses when the commodity briefly dipped below $100 for the first time since mid-month.