US stock futures steady early Monday as traders weigh prospect of more sanctions on Russia

US stock index futures were little changed early Monday as traders weighed the prospect of further sanctions on Russia over the war in Ukraine.

After the S&P 500 index posted a third straight week of gains on Friday, evidence of potential war crimes by Russia over the weekend prompted the EU and US to push for new penalties after reports that Russian troops executed unarmed civilians in Ukrainian towns.

How did stock index futures perform?
  • The Dow Jones Industrial Average futures YM00,
    + 0.12%
    were up 8 points, or 0.02%, at 34,726.

The S&P 500 index futures ES00,
+ 0.18%
were up 2.50 points or 0.06% at 4,541

The Nasdaq-100 index futures NQ00,
+ 0.13%
were off 6.25 points or 0.04% at 14,857

On Friday, the Dow Jones Industrial Average gained 39.92 points, or 0.4%, to close at 34,818.27. The S&P 500 index SPX,
+ 0.34%
added 15.45 points, or 0.3%, to finish at 4,545.86. The Nasdaq Composite COMP,
+ 0.29%
The Nasdaq Composite COMP,
+ 0.29%
rose 40.98 points, or 0.3%, to end at 14,261.50.

What’s driving the market?

Investors were monitoring the latest developments in Ukraine. German Chancellor Olaf Scholz said Sunday that Western nations will impose additional sanctions on Russia in the coming days.

Oil prices CL00,
+ 0.97%
slipped further early Monday, extending a drop sparked by a U.S. announcement last Thursday of an unprecedented release of strategic reserves to fight rising energy costs.

A worsening Covid outbreak and lockdowns in China also pose a threat to oil demand. Chinese markets were closed Monday for a holiday, while most of Shanghai’s 25 million residents are under some form of Covid lockdown.

Treasury yields TMUBMUSD10Y,
edged higher early Monday after data Friday suggested the US labor market remains healthy, while the Federal Reserve has begun raising interest rates to tame inflation stoked in part by elevated commodity prices.

The US economy created a healthy 431,000 jobs in March and the unemployment rate fell to 3.6% from 3.8%.

“Even as U.S. labor force participation increases, that incremental labor supply is still insufficient to satisfy demand and wage pressures remain,” Nicholas Colas of DataTrek Research wrote in a note Sunday.

See also: The US jobs market is scorching hot. Here’s where the flames are highest

On Saturday, New York Federal Reserve President John Williams said that in addition to raising interest rates again at its May meeting, the Fed may begin reducing its balance sheet to address the level of US inflation that has become “particularly acute.”

“50 basis point FOMC meetings may not end in Q2,” DataTrek’s Colas said. “As it stands right now, there are 50 percent odds baked into Fed Funds Futures that there will be a 50 basis point increase at some point between the July and December meetings.”

On Wednesday the Federal Open Market Committee will publish the minutes from the central bank’s March meeting, giving investors a glimpse of how the Fed viewed market conditions.


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