US stocks open lower, cooling off a day after broad rally

NEW YORK — Stocks are opening lower on Wall Street, a day after a broad rally snapped a three-day losing streak. The S&P 500 fell 0.4% in the early going Wednesday. Technology companies did worse than the rest of the market, dragging the Nasdaq down 1.1%. Investors are keeping a close eye on the Russian troop buildup around Ukraine, and they’ve also got the Federal Reserve in focus. In the afternoon the Fed will release minutes from its latest policy meeting last month. Investors will be watching for clues about the next steps in raising interest rates to fight inflation. Crude oil prices rose 1.6%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

NEW YORK (AP) — U.S. markets drifted into negative territory in premarket trading Wednesday as officials from NATO and the West cast doubt on Russia’s claim to have removed some of its 150,000 troops amassed on the Ukraine border.

Future contracts for the Dow Jones Industrials and the S&P 500 each slipped 0.4% before markets opened.

Britain’s FTSE 100 fell 0.3% in early trading, while Germany’s DAX and France’s CAC were relatively flat.

Analysts warned the tensions on the Russia-Ukraine border were far from resolved, and the situation remains volatile.

“In short, provided we get a further pause in geopolitics, we might be able to focus on worrying data instead. But I would tread carefully on the assumption that we will be able to for long,” RaboResearch said in a report.

Markets got a brief boost when the government reported that Americans picked up the spending pace in January, with retail sales surging a 3.8% last month, topping most projections. Investors also await the Federal Reserve’s release of minutes from its January meeting when it signaled it would begin a series of interest-rate hikes in March. The Fed is poised to reverse pandemic-era policies that have fueled hiring and growth — but also stubbornly high inflation.

In Asia, Japan’s benchmark Nikkei 225 jumped 2.2% to finish at 27,460.40. Australia’s S&P/ASX 200 rose 1.1% to 7,284.90. South Korea’s Kospi surged 2.0% to 2,729.68. Hong Kong’s Hang Seng added 1.5% to 24,718.90, while the Shanghai Composite gained 0.6% to 3,465.83.

The Chinese government reported consumer prices rose 0.9% over a year earlier in January while prices of goods as they left the factory rose 9.1%.

China has been hit by the same supply disruptions that are pushing prices up in the United States and Europe, but the impact on Chinese consumers has been smaller. January inflation was down from December’s 1.5%. Forecasters expect it to decline further.

Russia announced that some units participating in military exercises around Ukraine would begin returning to their bases. Later in the day, Russian President Vladimir Putin said Moscow is ready for talks with the United States and NATO on military transparency and other security issues.

An official with NATO, the world’s biggest geopolitical security alliance, said the group did not see any sign that Moscow is decreasing its troop levels around Ukraine. President Joe Biden said Tuesday that the U.S. had not yet verified Russia’s claim of a troop drawdown.

Investors have been preparing for the U.S. Federal Reserve to start raising interest rates to fight inflation. The central bank is expected to start raising rates in March and traders see a 61% chance for a first hike of half a percentage point, double the traditional move.

Rising costs have been crimping operations for a wide range of businesses and prompting many to raise prices on finished goods from clothing to food. That has raised concerns that consumers could eventually pull back on spending, therefore hurting economic growth. Investors will get an update on retail sales on Wednesday when the Commerce Department releases its January report.

Investors also have their eye on the latest round of corporate earnings, including DoorDash on Wednesday and Walmart on Thursday.

In energy trading, U.S. benchmark crude surged $1.28 to $93.35 a barrel in electronic trading on the New York Mercantile Exchange. It slumped 3.6% Tuesday. Brent crude, the international standard, added $1.51 to $94.79 a barrel.

Oil prices have been volatile amid tensions over the Russia military buildup on the Ukraine border. Russia is a major energy producer and military action that disrupts supplies could jolt markets and global industries.

In currency trading, the U.S. dollar ticked up to 115.64 Japanese yen from 115.63 yen. The euro cost $1.1370, up from $1.1362.

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