By Peter Nurse
Investing.com -- U.S. stocks are seen opening sharply lower Monday, with surging oil prices on the back of the Ukraine/Russia conflict prompting fears of global stagflation..
At 7 AM ET (1200 GMT), the Dow Futures contract was down 400 points, or 1.2%, S&P 500 Futures traded 50 points, or 1.2%, lower and Nasdaq 100 Futures dropped 190 points, or 1.4%.
Russia’s invasion of Ukraine heads toward the two-week mark and shows no signs of easing, with the key southeastern port city of Mariupol under bombardment.
Ukrainian President Volodymyr Zelenskiy asked the international community earlier Monday to provide Ukraine with military aircraft and to boycott Russian oil, oil products, and other exports.
He’s unlikely to get aircraft, but U.S. Secretary of State Antony Blinken stated that the United States and European allies are exploring banning imports of Russian oil.
This resulted in crude prices surging to levels not seen since 2008, while the national gasoline average topped $4 a gallon, according to AAA.
At 7 AM ET, U.S. crude futures traded 7.1% higher at $123.86 a barrel, while the Brent contract rose 6.8% to $126.16.
Soaring commodity prices have raised fears of even greater inflation, with data due on Thursday expected to show U.S.CPI climbed to 7.9% year-on-year in February, after January's four-decade high of 7.5%.
With Friday’s monthly labor market report showing the U.S. economy is in rude health, such elevated inflation could prompt the Federal Reserve to hike interest rates in a more forceful manner than the market is currently pricing in.
Fed Chairman Jerome Powell said last week he would support a 25 basis point interest rate increase at the central bank's upcoming meeting next week but added that he would be "prepared to move more aggressively" later if inflation does not subside as quickly as expected.
In corporate news, Bed Bath & Beyond (NASDAQ:BBBY) is likely to be in the spotlight following a report in The Wall Street Journal that Chewy (NYSE:CHWY) Co-Founder Ryan Cohen has built a large stake in the retailer and is pushing for changes.
Additionally, the stocks of Whiting Petroleum (NYSE:WLL) Corporation and Oasis Petroleum (NASDAQ:OAS) soared in premarket trading on reports of a merger between the two. As of close Friday, Whiting had a market cap of about $3.3 billion while Oasis was valued at $2.8 billion.
Apple (NASDAQ:AAPL) could also be in focus with the tech giant expected to announce a new low-cost version of its iPhone SE with 5G capabilities at a launch event on Tuesday.
Elsewhere, gold futures rose 1.5% to $1,995.65/oz, while EUR/USD traded 0.6% lower at 1.0860.