(Bloomberg) — European stocks and U.S. equity futures were steady on Tuesday, while crude oil climbed as investors evaluated the prospect of tougher sanctions against Russia for alleged atrocities during the war in Ukraine.
The Stoxx Europe 600 index edged opened higher but quickly erased the advance, though energy stocks outperformed. The European Union said work is under way on tightening sanctions, while the U.S. said it may impose further penalties this week. The U.S. Treasury also ratcheted up pressure on President Vladimir Putin by halting dollar debt payments via American banks. Russia rejected allegations of war crimes, but its increasing isolation is sowing more concerns about disruptions to commodity supplies.
Contracts on the S&P 500 and Nasdaq 100 were little changed. Treasury yields rose, with the spotlight remaining on inverted yield curves. The latter point to an economic downturn should the Federal Reserve deliver a series of aggressive interest-rate hikes to quell high inflation. The dollar slipped against a basket of peers. Bond yields across Europe climbed.
Market moves are continuing to be shaped by the ramifications of the conflict and tightening monetary policy as raw-material costs stoke inflation. The Fed minutes later this week will guide expectations for how rapidly the U.S. central bank will increase rates and reduce its bond holdings. The Covid-19 resurgence in Europe and Asia and renewed lockdowns in China are also clouding the outlook for global growth.
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