Wall Street poised to start the week in red
U.S. stock futures plummeted early Monday morning, implying stocks would open the week with sharp losses, after the Biden administration and Western nations announced new round of sanctions to further punish Russia for Ukraine invasion.
The U.S., European Commission, U.K., Germany, France, Canada, and Italy jointly agreed to freeze the assets of Russian central bank and cut off some Russian banks from the SWIFT interbank messaging system.
As of 5 a.m. ET, futures tied to the blue-chip Dow sank 470 points, or 1.38% to 33,524.
S&P 500 futures dipped 79 points, or 1.8% to 4,301 while the tech-heavy Nasdaq 100 futures gave away 226.25 points, or 1.6% to 13,954.25.
Moscow hikes key interest rate as Rumble drops nearly 30%
Meanwhile, Russia’s central bank has increased its benchmark interest rate from 9.5% to 20% as its currency, the ruble, plunged to a record low early Monday after Moscow was booted from the global bank payments system due to its invasion of Ukraine.
The central bank said the rate hike is meant to “offset increased risk of ruble depreciation and inflation.”
It has also temporarily barred brokers from selling securities held by non-residents starting Monday on the Moscow Exchange.
Restrictions announced by the U.S. and its allies block Russian central bank from accessing its $640 billion hard currency coffers the Kremlin has at its disposal. They cripple the central bank’s ability to support the currency as it loses its value.
The ruble fell to a record low 105.27 per dollar on Monday, from about 84 per dollar late Friday.
Crude futures soar on Russia-Ukraine war
In energy markets, crude futures staged a strong rally as the disruption of oil due to Russia’s invasion of Ukraine remained a key concern for traders.
Russia troops continued to battle Ukrainian troops and citizen soldiers for control of Kyiv and other cities over the weekend.
Ukraine and Russia have agreed to meet for peace talks in the coming hours on the Ukrainian-Belarusian border.
Still, Russian President Vladimir Putin ordered his country’s nuclear deterrence forces be placed “into a special mode of combat service,” unnerving traders concerned that the war could spread to other nations outside of Ukraine.
As of 5 a.m. ET, U.S. West Texas Intermediate (WTI) crude futures advanced $4.35, or 4.75% to $95.94 a barrel. Global Brent crude futures climbed $4.30, or 4.75% to $98.42 a barrel.