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Market Snapshot: U.S. stock futures rise in volatile trade on hopes for fresh Ukraine talks, while oil moves past $108

Stock-index futures turned lower in choppy trading early Wednesday, following a crucial State of the Union address by President Joe Biden, with investors rattled by surging oil prices as war raged between Russia and Ukraine.

What are stock-index futures doing?

Futures for the Dow Jones Industrial Average
YM00,
+0.66%

YMH22,
+0.66%

fell 19 points, or less than 0.1%, to 33,206.

S&P 500 index futures
ES00,
+0.67%

ESH22,
+0.67%

fell 12 points, or 0.3%, at 4,291.

Nasdaq-100 futures
NQ00,
+0.71%

NQH22,
+0.71%

fell 56 points, or 0.4%, to 13,946.

The 10-year Treasury yields
TMUBMUSD10Y,
1.751%

rose 1 basis point to 1.72%.

What’s driving the market?

In regular trade Tuesday, the Dow
DJIA,
-1.76%

fell 597.65 points, or 1.8%, to close at 33,294.95; the S&P 500
SPX,
-1.55%

 slid 67.68 points, or 16%, to finish at 4,306.26; and the Nasdaq Composite
COMP,
-1.59%

dropped 218.94 points, or 1.6%, to end at 13,532.46, snapping a three-day win streak.

Surging energy prices remained in focus for Wednesday, with April West Texas Intermediate crude
CLJ22,
+5.08%

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Oil prices continued to climb despite Tuesday’s decision by International Energy Agency member countries to release 60 million barrels of oil from their emergency reserves, to help with any supply shortfall caused by Russia’s invasion of Ukraine, now entering its seventh day.

Read: Emergency plan to ease global oil-shortage fears amid the Ukraine-Russia crisis has seemingly backfired—here’s why

Wednesday’s monthly meeting of OPEC+ will be under intense scrutiny, though few expect the oil cartel to veer from a planned 400,000 barrel-per-day increase, given already tight supplies.

“So far, the cartel confirmed that they remain committed to the OPEC+ deal with Russia, and they are not expected to change their production boost plans despite the Ukrainian war,” said Ipek Ozkardeskaya, senior analyst at Swissquote, in a note to clients.

“If that’s the case, we shall see the positive pressure on oil prices intensify above the $100 per barrel level, and we could see the barrel of US crude advance toward the $125/150 range,” said the analyst.

Elsewhere, Biden delivered an optimistic speech on Tuesday, saying that America is “stronger today than we were a year ago,” even as war rages on in Eastern Europe and concerns about inflation linger domestically.

Biden offered a plan to drive down inflation by boosting domestic manufacturing and highlighted treatments and vaccines against the coronavirus, despite fears of new variants.

The speech came the U.S. announced that it was closing off American airspace to all Russian flights, a point that Biden mentioned in his speech, “further isolating Russia and adding an additional squeeze on their economy.”

The president also said Russia President Vladimir Putin’s unprovoked attack against Ukraine “will have left Russia weaker and the rest of the world stronger.” Russian troops were encircling key cities in Ukraine early Wednesday, with an escalation of attacks on urban areas and fears of much bloodshed to come this week.

See: Zelensky says Putin is now resorting to the tactics of a terrorist in Ukraine offensive

This year has been uniquely challenging for investors, with the S&P 500 down 10% to date in 2022, as investors prepare for the Federal Reserve to raise interest rates in response to high inflation and enter a new phase of the COVID-19 pandemic.

Fed fund futures are pricing in a near zero chance the Federal Reserve will hike interest rates by a half-point in March, a dramatic shift. 

“This heightened uncertainty means that all eyes will be on Fed Chair Powell today, who’s testifying before the House Financial Services Committee, and his appearances today and tomorrow will be some of the last Fedspeak we get before the FOMC enters their pre-meeting blackout period this Saturday,” said a team of Deutsche Bank strategists led by Jim Reid, in a note to clients.

Speeches from Chicago Fed President Charles Evans and St. Louis Fed President James Bullard are expected after the market opens. Ahead of that, the ADP private-sector payrolls report for February is due 8:15 a.m.

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