Here are the most important news, trends and analysis that investors need to start their trading day:
- Wall Street set to bounce higher after Tuesday's decline
- U.S. oil surges past $112 per barrel on supply fears
- Fed chief goes before Congress after jobs data
- Biden's speech focused on foreign, domestic challenges
- Ford will split EVs, legacy autos into separate units
1. Wall Street set to bounce higher after Tuesday's decline
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U.S. stock futures rose Wednesday as energy names, including Dow component Chevron, followed surging oil prices higher as the intensifying Russia-Ukraine conflict raised concerns about crude supply. Bond yields, a day after slumping, moved higher Wednesday to around 1.77% on the 10-year Treasury.
- Wrestling with the war's potential impact on the economy against even more inflation from higher oil, Federal Reserve Chairman Jerome Powell is set to deliver his semiannual assessment of the economy before a House panel Wednesday and a Senate panel Thursday.
- Dow stock Salesforce jumped roughly 4% and Nordstrom surged nearly 30% in premarket trading, the morning after each company issued better-than-expected quarterly earnings and revenue and upbeat guidance.
- Tuesday's major sell-off saw the Dow Jones Industrial Average, the S&P 500 and the Nasdaq drop more than 1.5% each.
2. U.S. oil surges past $112 per barrel on supply fears
U.S. oil skyrocketed Wednesday despite member states of the International Energy Agency announcing plans the day before to release 60 million barrels of oil reserves, half of that total from the U.S., in an effort to curb price increases.
- West Texas Intermediate crude, the American benchmark, topped $112 per barrel, its highest since May 2011.
- Global benchmark Brent crude reached $113 per barrel, its highest since summer 2014.
- The price moves come as OPEC and its oil-producing allies, which includes Russia, met Wednesday and decided not to add to April's output.
- Exxon Mobil said Tuesday it would exit Russia oil and gas operations and halt new investment there. Exxon shares rose 1.5% in the premarket.
3. Fed chief goes before Congress after jobs data
With Russia advancing toward Kyiv and oil prices soaring, the market has pulled back expectations for the number Fed interest rate hikes this year to around four or five, starting later this month. Lawmakers will grill Powell this week over how he's going to balance Russia and ever rising inflation. In prepared testimony, Powell said he still sees rate hikes ahead though he noted the "implications for the U.S. economy are highly uncertain" from the Ukraine war.
- U.S. companies added 475,000 jobs in February, better than estimates of 400,000, ADP reported Wednesday. January's count was dramatically revised from a loss of 301,000 to a gain of 509,000. During the Covid pandemic, ADP's numbers have not been the best indictor of the government's monthly employment report, set for release Friday.
4. Biden's speech focused on foreign, domestic challenges
President Joe Biden on Tuesday sought to accomplish two difficult tasks in his State of the Union address: rally public support for Ukraine and articulate a fresh domestic policy agenda vision.
- Alongside the rhetoric, Biden announced that the U.S. will ban Russian aircraft from flying through American airspace and that more sanctions against Russia's richest oligarchs are in process.
- Biden said the U.S. stands ready to rapidly deploy new vaccines in the event of another Covid variant, and Americans who test positive for Covid can get antiviral pills for free under a new program that launches this month.
- The president touted electric vehicle efforts by General Motors and Ford but not Tesla. In an email to CNBC, Tesla CEO Elon Musk wrote, "Nobody is watching the State of the Union." He later tweeted Tesla is investing more than double GM and Ford combined in EVs.
5. Ford will split EVs, legacy autos into separate units
Ford said Wednesday it will reorganize operations to separate its electric and internal combustion engine businesses into distinct units within the automaker. It's a similar strategy to how Ford is operating its Ford Pro commercial vehicle business under CEO Jim Farley's "Ford+" turnaround plan.
- Separating the operations but keeping them in-house goes halfway to appeasing some on Wall Street who have been pressuring legacy automakers to spin off their electric vehicle operations to capture value that investors have been awarding some EV start-ups. Shares of Ford rose 4% on the news in premarket trading.