NEW YORK –
U.S. markets headed for a sharply higher open Tuesday after Russia said that some troops would be returning to military bases, though it didn’t specifically say the troops pulling back were part of those amassed on Ukraine’s border.
Investors viewed Russia’s muddled announcement as a positive step toward potentially defusing a standoff that began late last year though Ukrainian leaders expressed skepticism about the pullback. Hours before the Russian Defense Ministry statement about its troops, a U.S. defense official said Russian units were moving closer to the Ukrainian border — not away from it — and could attack at any time.
On Wall Street, futures for the S&P 500 jumped 1.5% while the same for the Dow Jones Industrials rose 1.2%. Markets in Europe were also significantly higher, following mostly declines in Asia.
Benchmark U.S. crude, up almost 15% since satellite imagery in November showed a significant build-up of Russian troops along the Ukraine border, lost $3.02 to $92.44 a barrel on the New York Mercantile Exchange. Crude climbed 2.5% on Monday and natural gas prices jumped 6.4%. Russia is a major energy producer and military action that disrupts supplies could jolt markets and global industries. Brent crude, the international pricing standard, fell $2.77 to $93.71 a barrel.
Russia has denied it plans to invade but has massed more than 130,000 troops on Ukraine’s borders.
Moscow wants guarantees that NATO will not allow Ukraine and other former Soviet countries to join as members. It also wants the alliance to halt weapons deployments to Ukraine and roll back its forces from Eastern Europe.
Markets were spooked Monday after the U.S. said it was closing its embassy in Ukraine and moving all remaining staffers there to a city near the Polish border.
Overnight, Asian markets mostly followed Monday’s U.S. declines, with Japan’s benchmark Nikkei 225 shedding 0.8% to finish at 26,865.19. Australia’s S&P/ASX 200 sank 0.5% to 7,206.90. South Korea’s Kospi lost 1.0% to 22,676.54. Hong Kong’s Hang Seng declined 0.8% to 24,355.71, while the Shanghai Composite rose 0.5% to 3,446.09.
Investors also have been trying to gauge how stocks and the broader economy will be affected the Federal Reserve’s move to raise interest rates to quell surging inflation.
The central bank is expected to start raising its benchmark interest rate in March and Wall Street expects as many as seven rate hikes this year after last week’s report that inflation jumped 7.5% in January from a year ago, the fastest increase in four decades.
Investors also have their eye on the latest round of corporate earnings, including Airbnb on Tuesday, DoorDash on Wednesday and Walmart on Thursday.
This week also brings updates on inflation and how that might be impacting consumer spending. The U.S. Labor Department will release its January report for prices at the wholesale level on Tuesday and the Commerce Department will release its January retail sales report on Wednesday.
In currency trading, the U.S. dollar rose to 115.62 Japanese yen from 115.55 yen. The euro cost $1.1348, up from $1.1306.
