U.S. stock markets will be closed for Presidents Day
European stock indexes wavered as investors watched for signs of escalation between Moscow and the West, alongside the potential for a diplomatic solution.
U.S. stock markets will be closed Monday for Presidents Day, having posted losses last week as the threat of an invasion of Ukraine and the uncertain path of monetary policy weighed on market sentiment. Futures for the S&P 500 rose 0.1% Monday, while contracts for the tech-focused Nasdaq-100 fell 0.2% and futures for the Dow Jones Industrial Average added 0.2%.
The pan-continental Stoxx Europe 600 fell 0.3%. In Asia, China’s Shanghai Composite and South Korea’s Kospi closed flat. Hong Kong’s Hang Seng declined almost 0.7%, and Japan’s Nikkei 225 retreated 0.8%.
Russia’s deployment of more than 100,000 troops along the country’s border with Ukraine has led to the biggest standoff between Moscow and the West in years, with the U.S. warning of an imminent Russian invasion of its neighbor. On Sunday, President Biden agreed to meet Russia’s President Vladimir Putin, if Moscow pulled back from the potential attack.
“Markets find it fiendishly difficult to price in geopolitical risk,” said Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald.“Over the weekend, we’ve had a worsening and then an improvement of sentiment. It does seem that we’ll have another week of uncertainty.”
The MOEX, Russia’s benchmark stock index, fell 2.8%. Ukraine’s hryvnia fell against the dollar, while the Russian ruble strengthened against it. Some economists think Russia may be tapping into its vast foreign-currency reserves to help steady its currency.
Investors worry that a war between Ukraine and Russia could prolong elevated inflation in developed economies by disrupting supplies of important commodities. Russia is among the world’s largest suppliers of oil, as well as the biggest exporter of wheat, and a major metals producer. Ukraine is also a major world supplier of corn and wheat.
Brent crude, the international oil benchmark, ticked up 0.3% to $93.83 per barrel. Gold prices, which have gained recently as investors sought safe assets, edged down. Most actively traded gold futures edged 0.1% lower Monday to $1,898.20 a troy ounce.
Investors continue to try to assess by how much and how quickly the Federal Reserve will raise interest rates to tame inflation. Fed officials have pushed back against expectations that they will begin raising interest rates in March with a half-percentage-point increase in their benchmark rate.