US pre-open: Futures in the red following bond market's recession warning

Wall Street futures had stocks opening in the red ahead of the bell on Tuesday as market participants continue to digest a recession warning from the bond market and the latest headlines in the Ukraine-Russia war.

As of 1225 BST, Dow Jones futures were down 0.28%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.27% and 0.28% lower, respectively.

The Dow closed 103.61 points higher on Monday as Treasury yields remained inverted.

Treasury yields were in focus again prior to the open on Tuesday, with rates on some shorter-term bonds continuing to trade above their longer-dated counterparts despite yields rising broadly. The five-year yield climbed to 2.6%, while the 30-year rate traded around 5.51%. However, the key part of the yield curve uninverted, with the two-year yield trading marginally below its 10-year counterpart.

Traders also kept a keen eye on developments in Eastern Europe, with the war between Ukraine and Russia carrying on and Ukraine president Volodymyr Zelenskyy vowing to pursue allegations of war crimes against Moscow, stating that over 300 civilians were killed and tortured in a suburb near the nation's capital of Kyiv.

Oil prices were up again early on Tuesday, with West Texas Intermediate futures up 1.33% at $104.65 per barrel and Brent crude gaining 1.18% to $108.80.

The EU revealed it was planning a mandatory phase-out of coal imports from Russia in response to reports about Russian atrocities in Ukraine, according to Bloomberg. The action would be added to measures already ready for debate by EU ambassadors. Details of the plan were under discussion, according people familiar with the proposals told Bloomberg, but the European commission was also expected to propose a ban on most Russian trucks and ships from entering the EU, the report said. Russia supplies about half of Europe's thermal coal used for power stations to generate electricity.

AvaTrade's Naeem Aslam said: "Geopolitical tensions don't seem to be going away anytime soon. Recently, the US has warned that it is likely that Russia will intensify its military operation in Ukraine. Remember, Putin reduced the Russian military operation in Kyiv, but then Russia attacked other parts of Ukraine. What we have is confusion once again because, on the one hand, it does seem like Russia is scaling down its military presence. Still, on the other hand, the US maintains that Moscow is only revising its goal after failing to capture Kyiv.

"In addition to this, as Russia's military is accused of committing war crimes in Ukraine, the US Treasury has blocked dollar debt payments from Russian government accounts at US financial institutions. The Treasury Department's Office of Foreign Assets Control will no longer allow dollar payments from Russian government accounts at US banking institutions."

On the macro front, February trade balance figures will be published at 1330 BST, while S&P's global composite PMI for March and last month's ISM non-manufacturing PMI will follow at 1445 BST and 1500 BST, respectively.

No major corporate earnings were slated for release on Tuesday.