Stock futures were flat in overnight trading Thursday following the Dow Jones Industrial Average’s worst day of 2022 as investors dumped risk assets amid geopolitical concerns.
Futures on the blue-chip Dow were up by 30 point. S&P 500 futures and Nasdaq 100 futures both edged 0.1% higher.
Wall Street suffered a steep sell-off on Wednesday with the Dow falling more than 600 points for its biggest daily drop since end of November. The S&P 500 dropped more than 2% to break a two-day winning streak, while the Nasdaq Composite declined 2.9%.
Investors continued to be on edge about the ongoing tensions between Russia and Ukraine. Ukraine accused pro-Russian separatists of attacking a village near the border. In the U.S., meanwhile, Secretary of State Antony Blinken was headed to the United Nations to make an urgent appeal against an invasion.
“A further escalation of tensions in the near term could roil markets due to the potential impact on a tenuous global supply chain, particularly as the Fed prepares for its first-rate hike in years,” said Peter Essele, head of portfolio management at Commonwealth Financial Network. “A perfect storm may be on the horizon if calmer heads don’t prevail.”
Investors have been grappling with the outlook for Federal Reserve policy. St. Louis Fe President James Bullard, who had just called for aggressive action, warned that inflation could get out of control without rate hikes.
Major averages are on pace for their second negative week in a row. The Dow is down 1.2% week to date, while the S&P 500 and the Nasdaq have fallen 0.9% and 0.5% this week, respectively.
“Wall Street is feeling very jittery as it looks to the left and sees intensifying geopolitical risks with the Ukraine situation and then it looks to the right and sees the potential for aggressive Fed tightening,” Edward Moya, senior market analyst at Oanda, said in a note.