Stocks Turn Lower on Doubts for U.S.-Russia Summit: Markets Wrap

European stocks turned lower with U.S. equity futures as traders questioned the prospects for a diplomatic meeting between President Joe Biden and his Russian counterpart Vladimir Putin.

The Stoxx Europe 600 index fell to its lowest level in a week, erasing a gain at the open, after the Kremlin said there are “no concrete plans” yet for a summit between the Russian and U.S leaders. The decline in Nasdaq 100 futures outpaced that of S&P 500 contracts.

Markets are being whipsawed by Russia’s troop buildup near Ukraine and efforts at diplomacy to bring both sides back from the brink of war. France said its proposal for a summit was accepted in principle by Biden and Putin. U.S. officials said the meeting would only occur if Russia doesn’t invade Ukraine, while Russia has said repeatedly it has no plans to do so.

Russia’s ruble fell almost 1% against the dollar to its lowest level in a week. Crude futures held a gain.

Earlier, the U.S. told allies that a Russian invasion of Ukraine could target multiple cities beyond the capital, Kyiv. Biden said Friday he’s convinced Putin has decided to move against Ukraine. U.S. Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov are due to meet this week.

The Ukraine standoff, along with the worry that tightening Federal Reserve monetary policy could choke growth in the world’s biggest economy, raise the likelihood of more swings in markets in an already volatile year.

“Global data and central banks’ stance on tightening are all taking a back seat to Ukraine, with markets nervously awaiting the next headline,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada. “Thinner liquidity because of the U.S. holiday adds to the anxiety.”

Fed Policy

Key Federal Reserve officials at the end of last week backed raising interest rates in March to curb the hottest inflation in 40 years.

The remarks on Friday by Governor Lael Brainard and New York Fed President John Williams, as well as Chicago Fed chief Charles Evans, showed officials eager to get tightening under way, without seeking a supersized interest-rate hike or a move before the next scheduled meeting.

Bets on an aggressive, 50 basis-points Fed liftoff next month have diminished. The Fed’s key inflation metric may have accelerated to a fresh four-decade high in January, data this week is expected to show.

Difuminar, Gráfico, Computadora, Datos

Here are some events to watch this week:

Russia’s Foreign Minister Sergei Lavrov has agreed to meet U.S. Secretary of State Antony Blinken this week in Europe
Fed Governor Michelle Bowman speaks Monday
China property prices, loan prime rates Monday
New Zealand rate decision Wednesday
BOE Governor Andrew Bailey appears before the Treasury Committee Wednesday
Bank of Korea policy decision Thursday
EIA crude oil inventory report Thursday
Fed officials Loretta Mester and Raphael Bostic speak Thursday
U.S. new home sales, GDP, initial jobless claims Thursday
U.S. consumer income, U.S. durable goods, PCE deflator, University of Michigan consumer sentiment Friday

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.6% as of 12:02 p.m. London time
Futures on the Nasdaq 100 fell 0.5%
Futures on the S&P 500 fell 0.3%
The MSCI Asia Pacific Index fell 0.5%
The MSCI Emerging Markets Index fell 0.9%

Currencies

The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.2% to $1.1349
The Japanese yen rose 0.1% to 114.87 per dollar
The offshore yuan was little changed at 6.3280 per dollar
The British pound rose 0.2% to $1.3619

Bonds

Germany’s 10-year yield was little changed at 0.20%
Britain’s 10-year yield advanced two basis points to 1.39%

Commodities

Brent crude rose 0.5% to $94.04 a barrel
Spot gold fell 0.2% to $1,894.01 an ounce