U.S. stock futures dove in the early hours of Monday after oil prices touched the highest level in 14 years amid continued fighting between Russia and Ukraine. Futures contracts tied to the Dow Jones Industrial Average lost 1.38%, while the S&P 500 futures and Nasdaq 100 futures slipped 1.40% and 1.53%, respectively.
The U.S. oil benchmark, the West Texas Intermediate crude futures, fell back to $123.09 per barrel after momentarily hitting $130 per barrel earlier. Moreover, the international benchmark, Brent crude, also hit its highest price in 14 years briefly before pulling back slightly.
The movements come after it was announced on Sunday that U.S. and its European allies are in talks to ban Russian oil and natural gas imports, in another attempt to cripple the Russian economy after the first phase of punitive sanctions last week. This was in response to Russia’s breach of a temporary cease-fire agreement in the cities of Mariupol and Volnovakha on Saturday, halting the evacuations planned for the cities’ residents.
On Friday’s closing bell, the Dow (DJIA) dropped 0.53%, the S&P 500 (SPX) shed 0.79%, and the Nasdaq 100 (NDX) declined 1.6%; as economic slowdown concerns from investors outweighed the positive February jobs report announced the same day. The report, released by the Bureau of Labor Statistics, said that there was an addition of 678,000 jobs to the U.S. job market in February, exceeding the Dow Jones’ expectations of 440,000. Meanwhile, the unemployment rate fell to 3.8%.
In a macroeconomic sense, economic forecasters are predicting slower growth across the U.S. economy characterized by higher inflation, as a result of the Russia-Ukraine war. Europe’s economy, on the other hand, is likely to hover near recession and Russia’s GDP is expected to nosedive by double-digit percents.
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