(Bloomberg) — US equity futures fluctuated with stocks Wednesday amid rising concern that Europe will lose access to Russian gas, sending the region into a recession that could have global repercussions.
Contracts on the Nasdaq 100 and the S&P 500 erased early gains to trade slightly lower, along with the Stoxx 600 Index. In the premarket, Netflix rose 7.5% after it reported better-than-feared earnings late on Tuesday and said it expects to return to subscriber growth before the end of the year.
Treasuries rose with the dollar, pushing the 10-year yield below 3%. The euro held its ground near a two-week high against the dollar on the possibility of a bigger-than-expected European Central Bank interest-rate hike Thursday.
Speculation that company earnings will hold up and that the Federal Reserve will avoid very aggressive monetary tightening is giving investors some hope.
Yet the risk of a global downturn and Europe’s energy crisis is keeping investors on edge.
The European Union is preparing for a scenario in which Russia halts gas exports to retaliate against sanctions over its invasion of Ukraine. The EU proposed that the bloc cut its natural gas consumption by 15% over the next eight months to ensure that any full Russian cutoff of natural gas supplies won’t disrupt industries over the winter.
Read more: EU Proposes 15% Cut in Gas Consumption on Russian Supply Concern
Pessimism is hard for investors to shake after they endured the worst combined first-half losses on stocks and bonds around the world on record, with $8 trillion wiped off the S&P 500 alone.
West Texas Intermediate crude oil slipped below $103 a barrel. Bitcoin hovered above $23,000 after climbing out of a one-month-old trading range.
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Key events to watch this week:
- Earnings this week include Tesla
- Bank of Japan, European Central Bank rate decisions. Thursday
- Nord Stream 1 pipeline scheduled to reopen following maintenance. Thursday
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