U.S. stocks were poised for muted gains and oil prices fell as investors surveyed developments in Ukraine and awaited the next meeting of the Federal Reserve.
Futures for the S&P 500 rose 0.6% Monday. The benchmark stock index has fallen for five of the past weeks. Investors have been spooked by the war in Ukraine and a rally in commodity prices sparked by the conflict, on top of the prospect of rising interest rates. They have pushed into perceived havens such as gold, while selling stocks.
Gains for stock futures suggested indexes would claw back some ground Monday. Investors said positive comments from both Ukrainian and Russian officials about a scheduled round of talks have given markets a boost. Contracts for the technology-focused Nasdaq-100 edged up 0.2% and futures for the Dow Jones Industrial Average gained 0.7%.
VIX and VIXmain fell 0.42% and 3.87% separately.
Gold-main 2204 fell 1.04% to $1964.3.
“The predominant story today is the better mood music coming out of Ukrainian and Russian negotiators,” said Edward Park, chief investment officer at Brooks Macdonald. “Expectations were pretty low at the tail end of last week.”
“There’s certainly a risk of a short-term bout of volatility should negotiations either pause or look like they’re turning in the wrong direction,” he added.
Ahead of the bell, shares of Occidental Petroleum fell 4.5%. Warren Buffett’s Berkshire Hathaway bought shares in the oil-and-gas producer valued at $1.5 billion, according to a late-Friday filing.
In overseas markets, the Stoxx Europe 600 rose 1.4%, led by shares of auto makers and banks.
In Asia, China’s Shanghai Composite Index dropped 2.6% after the city of Shenzhen went into lockdown to contain an outbreak of coronavirus. The shutdown, which is set to last at least a week, has halted operations at a number of manufacturers, including Foxconn Technology Group, a major iPhone assembler.
The lockdown could knock oil demand, pulling crude prices down. Brent-crude futures, the international benchmark, slipped 2.8% to $109.51 a barrel. A week ago, Brent prices hit $139 a barrel, their highest level since 2008, as the war in Ukraine disrupted global commodity supply markets. Investors said the retreat in oil prices since then had eased inflation concerns somewhat and helped soothe stock markets.
Elsewhere in commodity markets, nickel trading remained suspended on the London Metal Exchange, which stopped the market last week to contain a huge run-up in prices.
Investors are turning their attention toward the Federal Reserve’s monetary-policy meeting, which wraps up Wednesday. The central bank is expected to raise its benchmark rate for the first time since 2018 as officials look to cool demand and control inflation.
The central bank is navigating an unusually complicated environment of a tight labor market, supply disruptions, spiraling inflation and now, Russia’s invasion of Ukraine.
The yield on 10-year Treasury notes rose to 2.056% Monday from 2.004% Friday ahead of the meeting. Yields and bond prices move in opposite directions.
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