Stock Futures Fell After Russia Recognized DPR and LPR

Stock futures declined on Tuesday morning as traders continue to analyze Vladimir Putin’s decision. One day earlier, Russia made an important decision. The country decided to recognize the independence of the so-called Donetsk People’s Republic and Luhansk People’s Republic. 

The country’s leader ordered troops into two breakaway regions of eastern Ukraine after announcing that he would recognize their independence. 

On Monday, the country’s longtime leader aired historical grievances against NATO, and the U.S. Putin accused Western governments of hostile activities that threaten Russian security. He also made a case for involvement in the region to the Russian people. 

Ahead of Vladimir Putin’s address, the Kremlin said he discussed his decision with French President Emmanuel Macron and German Chancellor Olaf Scholz. Macron and Scholz expressed their disappointment with his decision. Nevertheless, Scholz and Macron indicated their readiness to continue diplomatic talks according to the Kremlin.

Stock futures on Tuesday

As stated above, stock futures fell on Tuesday morning as traders digested Putin’s decision to recognize the DPR and LPR. 

Futures tied to the Dow Jones Industrial Average dropped 493 points or 1.39%. Meanwhile, S&P 500 futures declined 1.74%, and Nasdaq Composite fell 2.6%. The U.S. stock market was closed on Monday due to the President’s Day holiday. 

Oil prices jumped, with West Texas Intermediate (WTI) futures jumping 3.95% to $94.67 per barrel. 

Tensions over Ukraine created pressure on market sentiment recently, with the major averages posting back-to-back weekly losses. Last week, the Dow Jones Industrial Average dropped 1.9%. The S&P 500 fell 1.6%, and the Nasdaq Composite declined 1.8% during the same period of time. 

Traders are also monitoring the Federal Reserve and its actions. The central bank is expected to raise interest rates several times.