Oil loses steam, markets wrap

US and European equity futures rose on Wednesday as traders assessed the risks posed by a surge in commodity prices after Russia launched a special operation in Ukraine. A pullback in China impacted Asian equities.

European contracts added around 2%, while S&P 500 and Nasdaq 100 futures made more modest gains. The MSCI Inc. Asia-Pacific index was weighed down by both China and Hong Kong.

Since the start of the year the S&P 500 has lost 70,000 points, the Nasdaq 100 has shed almost all of last year's gains, losing around 37,000 points at the moment:

Crude oil surged after the US banned imports of Russian fossil fuels. The UK will ban Russian oil but save natural gas and coal. West Texas Intermediate crude added $6 and is trading well above the tops of 2011 and 2013:

Commodity volatility continues due to conflict and sanctions on resource-rich Russia that cut it off from the global economy. Supply disruptions and the subsequent inflationary shock could halt global growth.

Australian and New Zealand bonds fell and Treasuries suffered losses. The yield on 10-year US bonds was 1.85%. The dollar is strengthening. Gold is testing the top of last year. The rouble is down around 8% as trading resumes in Moscow.

Commodity costs underline the inflation challenge for the Fed, which is expected to hike interest rates next week. In Australia, central bank Governor Philip Lowe said a rate increase later this year is "plausible" as Russia's invasion creates a new supply shock.

"The duration of this incursion is really going to weigh on the economics of both Europe and the US," Victoria Fernandez, Crossmark Global Investments chief market strategist, said.

The Fed is widely expected to hike rates by 25 basis points. The breakeven rate on 30-year inflation-linked Treasuries, an indication of what the market sees the annual pace of consumer-price gains averaging over the next three decades, climbed to its highest level since 2013.

Here are some key events this week: