(Reuters) – U.S. stock index futures slipped on Wednesday, as optimism around Ukraine-Russia peace talks waned and focus shifted to the prospect of rapid increases in interest rates weighing on economic growth.
The Kremlin on Wednesday said there was no sign of a breakthrough yet, even as it welcomed the fact that Kyiv has set out its demands to end the conflict in written form.
Russia on Tuesday pledged to cut down on military operations around Kyiv and in northern Ukraine, while Ukraine proposed adopting a neutral status.
Worries about the fallout from the war and rising rates hammered markets in the first quarter, putting the main Wall Street indexes on course for their worst quarterly showing since the height of the pandemic selloff in 2020.
Still, the indexes are set to end March higher, with the S&P 500 erasing more than half its quarterly losses in the last few days, powered by upbeat economic data and gains in megacaps.
Apple notched its 11th consecutive session of gains on Tuesday but inched 0.5% lower in premarket trading.
Other megacap companies like Tesla Inc, Meta Platforms Inc, Amazon.com Inc, Alphabet Inc and Microsoft Corp slipped between 0.1% and 0.5%. The NYSE FANG+TM index is up 8.8% so far this month.
However, investors are questioning how long the surge can continue in the face of a hawkish Federal Reserve, warnings of recession from the bond market and geopolitical uncertainty.
The widely tracked U.S. 2-year/10-year Treasury yield curve briefly inverted on Tuesday for the first time since September 2019, as bond investors bet that aggressive tightening by the Fed could hurt the U.S. economy over the longer term. [US/]
The ADP National Employment Report, due at 08:15 a.m. ET, is expected to show that private payrolls increased by 450,000 jobs in March, compared to a rise of 475,000 jobs in February.
Oil majors Exxon Mobil Corp and Chevron Corp recovered about 0.6% each as crude prices clawed back some of this week’s heavy losses. [O/R]
At 07:18 a.m. ET, Dow e-minis were down 85 points, or 0.24%, S&P 500 e-minis were down 11.75 points, or 0.25%, and Nasdaq 100 e-minis were down 56 points, or 0.37%.
Micron Technology rose 4.3% after the chipmaker forecast third-quarter revenue above Wall Street estimates.
Lululemon Athletica Inc jumped 7.6% after forecasting full-year profit and revenue above estimates as demand for athletic wear remains strong even as people return to offices.
(This story refiles to correct typos in paragraphs 1 and 2.)
(Reporting by Bansari Mayur Kamdar and Amruta Khandekar in Bengaluru; Editing by Sriraj Kalluvila)
