By Geoffrey Smith
Investing.com -- U.S. stock futures were mixed in early trading in New York on Tuesday, with the market holding up relatively well to continued downward pressure from large-cap Chinese ADRs.
By 7 AM ET (1100 GMT), Dow futures were edging higher, reversing overnight losses, as the market was cheered by the unwinding of price spikes in oil and other industrial and agricultural commodities. The abrupt rises in commodity prices in the immediate aftermath of Russia's invasion had stoked fears of inflation and of a broad economic slowdown.
Dow futures were up 25 points, or 0.1%, while S&P 500 futures were up 0.2% and Nasdaq 100 futures were up 0.3%.
The Nasdaq had underperformed on Monday due to intense selling pressure in Chinese ADRs, amid fears of a Covid-induced economic slowdown and the risk that U.S. authorities may forcibly delist them from U.S. exchanges. That threat is long-standing but has acquired extra urgency since U.S. officials warned China that it would face consequences if it chose to help Russia get around Western sanctions. Seven hours of 'intense' talks between National Security Advisor Jake Sullivan and China's top diplomat Yang Jiechi failed to clarify which way China will ultimately jump.
The market is turning its attention to the Federal Reserve's two-day policy meeting which starts later Tuesday and is expected to end with a 25 basis point rise in the fed funds target rate on Wednesday. The Fed is meeting at a time when consumer inflation is running at a 40-year high, while producer price data due at 8:30 AM ET should confirm that U.S. companies are continuing to raise prices at an alarming rate. The annual PPI is expected to have hit 10% in February. The Empire State Manufacturing Index is also due for release at the same time.
One company likely to be in the spotlight for its pricing will be Tesla (NASDAQ:TSLA), which earlier announced its second price hike in a week in the U.S.
On the plus side, there are signs that commodity markets may be returning to normal after a wild surge in volatility since the invasion of Ukraine. U.S. crude futures were down 7.1% at $95.64 a barrel, while Brent was down 7.2% at $99.17 a barrel
Crude oil was trading back below $100 a barrel for the first time in two weeks after Russia's Foreign Ministry talked up the possibility of a breakthrough on lifting sanctions on Iran. The talks had broken down last week after Russia insisted that its trade with Iran not be included under the sanctions imposed by the West on Moscow for its invasion of Ukraine.
Elsewhere, gold futures also retreated to a two-week low of $1,927.10 an ounce, a drop of 1.7%, while the euro rose 0.5% against the dollar to $1.0994.