Stock Market Today – 3/18: Stocks Set for Lower Open Amid Ukraine Escalation Fears

Stocks are set to open lower Friday as Russia’s war against Ukraine entered its fourth week, with increased tensions on both sides of the conflict stoking concerns of an escalation that could lead to additional disruptions in commodity supplies.

Futures contracts linked to the Dow Jones Industrial Average are indicating a 195-point opening bell dip, while those linked to the S&P 500 are priced for a 23.75-point move to the downside.

The tech-focused Nasdaq Composite pointed to an 83-point fall as benchmark as benchmark 10-year Treasury note yields, which spiked to 2.215% in the wake of Wednesday’s Federal Reserve rate hike, eased to 2.157% in overnight trading.

Stocks are still on track to end the week higher, however, with the S&P 500 at one- month highs and the Nasdaq at its highest level since March 12.

A missile strike on the outskirts of Lviv, the western city near the Polish border that has been a haven for people fleeing embattled cities elsewhere in Ukraine, offset optimism of progess in peace talks earlier in the week.

In the Ukraine capital of Kyiv, air raids sounded as city officials reported that a residential area had been shelled. Explosions were also heard in the strategically important southern city of Odessa, nestled on the Black Sea, according to reports.

With the war entering its fourth week, Russia is keeping up its siege campaign, even as American and British intelligence officials say its overall offensive has slowed amid heavy losses, logistical problems and an intense Ukrainian resistance.

Stocks are still on track to end the week higher, however, with the S&P 500 at one- month highs and the Nasdaq at its highest level since March 12, though volatility is expected to loom large amid so-called triple-witching, the third Friday of every March, June, September and December when three key events — the expiration of single-stock options, stock-index futures, and options on stock indexes — all happen at once.  

Still, oil prices resumed their advance, with Brent crude futures gaining 82 cents, or 0.8%, to $107.46 a barrel after surging nearly 9% on Thursday in the largest percentage gain since mid-2020. WTI futures for April delivery rose $1.14, or 1.1%, to $104.12 a barrel, adding to an 8% jump on Thursday.

Despite the rebound, both benchmark contracts were set to end the week down more than 4%, after having traded in a $16 range. Prices have dropped from 14-year highs hit nearly two weeks ago.

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Benchmark 10-year Treasury note yields, which spiked to 2.215% in the wake of Wednesday’s Federal Reserve rate hike, eased to 2.157% in overnight trading.

Investors will also be keeping an ear out for comments from Fed speakers on Friday, with Neel Kashkari, Thomas Barkin and Michelle Bowman all due to speak from noon onwards. On the data, front U.S. February Existing Home Sales and Leading Index numbers are on tap, as well as the latest Baker Hughes U.S. Rig Count.

Among individual stocks, shares of FedEx  (FDX) – Get FedEx Corporation Report were down more than 3% in premarket trading after the U.S. delivery firm posted a lower-than-expected quarterly profit amid labor shortages, while the pandemic also hurt its holiday revenue growth.

GameStop  (GME) – Get GameStop Corp. Class A Report shares, meantime, were down about 7% in premarket trading after the video game retailer reported an unexpected loss during the holiday quarter. The company said it will launch a new marketplace for non-fungible tokens, or NFTs, by the end of April.

Moderna  (MRNA) – Get Moderna, Inc. Report stock was up nearly 2% in premarket trading after the drugmaker asked the Food and Drug Administration on Thursday to authorize a fourth shot of its Covid-19 vaccine as a booster dose for all adults.

The request is broader than rival pharmaceutical company Pfizer’s  (PFE) – Get Pfizer Inc. Report request earlier this week for the regulator to approve a booster shot for all seniors.

Overseas, the pan-continental Stoxx Europe 600 ticked down 0.2%. The Russian stock market remained closed and the central bank hasn’t yet said if it will open next week. The central bank kept its key policy rate steady at 20%, though warned of “considerable uncertainty” ahead.

The ruble appreciated 3% against the dollar, trading at around 103 rubles to $1, after the country avoided default by making coupon payments on dollar-denominated sovereign bonds on Thursday.

Britain’s FTSE 100, meanwhile, was set to end what was otherwise a strong week on a flat note after the index slipped 13.22 points to 7372.12. The Bank of England earlier this week raised its base lending rate by 0.25% to 0.75%.

Overnight In Asia, Chinese stocks were mixed, with the Shanghai Composite Index rising for the third consecutive trading session. Hong Kong’s Hang Seng Index slid 0.4% on Friday but still closed more than 4% higher for the week. The Nikkei 225 in Tokyo closed 0.65% in the green at a two-week high of 26,827.43. 

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