Stock futures were little changed early Wednesday morning as oil prices continued to surge amid the ongoing conflict between Russia and Ukraine.
Futures tied to the Dow Jones Industrial Average shed 20 points, or 0.06%. S&P 500 and Nasdaq 100 futures also dipped 0.12% and 0.11%, respectively. All three futures contracts had earlier traded in positive territory.
The moves downward in futures came as oil prices continued to trek upward. Both U.S. crude and international benchmark Brent crude futures rose more than 7% each.
Earnings boosted several stocks in extended trading. Nordstrom spiked by nearly 35% on strong earnings while SoFi surged around 18%.
In regular trading, the Dow fell 597 points, or 1.76%. The S&P 500 lost 1.55% and the Nasdaq Composite slid 1.59%.
“This dramatic dislocation is due to a flight to safety where U.S. production is viewed as more reliable than other global sources,” Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, said of the spike in WTI. “However, it is unlikely to persist after the Ukraine situation stabilizes.”
Investors are keeping a close eye on oil prices, which could drive inflation, choke the economy and create challenges for the Federal Reserve when shaping policy.
Energy stocks were a bright spot in the market Tuesday, while bank stocks took a hit, dragged down by a sharp decline in Treasury yields, representing a rush into safe-haven bonds amid the stock market turmoil.
The benchmark 10-year note dropped below 1.7% at several points during Tuesday’s session.
Fed Chair Jerome Powell will testify before Congress on Wednesday to give his semiannual monetary policy update. With fears over the Russian invasion of Ukraine causing turmoil in the financial world, Wall Street has quietly dialed down its expectations for Fed action.
Powell is now tasked with telling Congress this week that the central bank will be doing more to control inflation at a time when markets expect it will be doing less.
Investors are also looking forward to employment data from ADP due out Wednesday, as well as mortgage application numbers.
President Joe Biden will deliver his first State of the Union address on Tuesday evening. Investors may be listening for updates on his economic agenda, though the global response to the conflict in Ukraine is likely to dominate instead.
Earnings season continues with several tech companies set to report on Wednesday. Okta, Pure Storage and C3 AI will report after the market closes. ChargePoint is also scheduled to report after the bell.