By Peter Nurse
Investing.com -- U.S. stocks are seen opening higher Wednesday, rebounding after recent losses amid the first signs of compromise from the Russian and Ukrainian governments while investors digest volatile oil prices.
The main Wall Street indices all closed lower Tuesday, with the blue chip Dow Jones Industrial Average falling 185 points, or 0.6%, moving deeper into correction territory after giving up gains of almost 600 points. The broad-based S&P 500 dropped 0.7%, also into correction territory, while the tech-heavy Nasdaq Composite fell 0.3%, after moving into a bear market on Monday.
There were tentative signs of a diplomatic shift in the conflict after Russia’s Foreign Ministry spokeswoman Maria Zakharova said Russia has no intention of occupying Ukraine or overthrowing its government.
These comments came a day after Ukraine President Volodymyr Zelenskyy said he had “cooled” on the idea of joining NATO, the prospect of which was a prime factor behind Russia’s invasion.
The war in Ukraine and the associated Western sanctions on Russia have sent commodity prices, and the crude market, in particular, soaring to multi-year records.
This has prompted concerns that this will force the Federal Reserve, already concerned about surging inflation, to hike interest rates more aggressively than initially expected.
The Biden administration added to the volatility late Tuesday by announcing the United States would ban Russian oil imports. However, the International Energy Agency said Wednesday it could release more oil from stocks and will draw up an action plan to swiftly reduce oil usage.
Oil prices weakened Wednesday, also weighed by the news that U.S. crude stocks rose by 2.8 million barrels for the week ended March 4, according to data from the American Petroleum Institute Tuesday, against forecasts of a drop.
If confirmed by the official Energy Information Administration numbers later Wednesday, this would suggest consumers are reacting to the surging prices at the pump by pulling back on travel.
By 7 AM ET, U.S. crude futures traded 3% lower at $119.99 a barrel, while the Brent contract fell 2.8% to $124.35. Both benchmarks hit their highest levels since July 2008 on Monday, with Brent hitting $139.13 a barrel and WTI $130.50.
In corporate news, Bumble (NASDAQ: BMBL ) will be in the spotlight after the dating app offered up an optimistic forecast for 2022, expecting revenue to rise by more than 23%, even following its decision to leave the Russian market.
Macy's (NYSE: M ) will also be in focus after the retailer chose to repay some debt and refinance existing notes at cheaper interest rates.
Apple (NASDAQ: AAPL ) announced its newest version of the iPhone SE with its latest mobile processor and 5G capability on Tuesday and people will likely still be talking about it this week.
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