US stock futures slide after Putin orders Russian troops into Ukraine, while oil and gold rise

• Dow futures lost nearly 500 points early Tuesday after Vladimir Putin ordered Russian troops into Ukraine, but are recovering ground.
• Putin's recognition of two breakaway regions in Ukraine as independent states has jolted financial markets.

US stock futures were recovering somewhat from a sharp sell-off early Tuesday, which came after Russian President Vladimir Putin's order to send troops into Ukraine put investors on edge about the higher risk of military conflict and international sanctions.

Oil futures jumped on fears that US sanctions could squeeze Russian supply, while gold rose as investors sought out less risky assets.

Futures on the Dow Jones tumbled as much as 493 points at one point early Tuesday, but were down 0.1%, or 45 points, as of last check at 6:00 a.m. ET. Those on the S&P 500 were about flat, recovering from a earlier 1.1% drop, while Nasdaq futures were down 0.45%, retracing from a 1.9% loss.

The moves point to a lower open for US stocks Tuesday, when investors get their first chance to react to recent Russia-Ukraine developments given markets were closed Monday for the Presidents Day holiday.

Putin on Monday signed a decree recognizing two breakaway regions of southeastern Ukraine as independent states, and ordering the Russian army into the territories, a move that Moscow described as a "peacekeeping operation."

The US, UK and EU immediately condemned the move, and promised sanctions. Russia's recognition of the separatist republics is likely to complicate diplomatic talks with Western nations.

"It remains to be seen if the recognition is a stepping stone toward a major invasion of Ukraine by Russian forces, as warned against by Western leaders over recent weeks, or if a new but fragile stalemate emerges," UBS strategists said in a note.

Putin's decree dramatically escalated an already highly tense situation and gave weight to the threat of war, triggering risk aversion across global markets.

"We're seeing clients aggressively short-selling global equity indices this morning, targeting declines of 5-10% over the coming days, amid concerns of a deteriorating situation in Ukraine," Marc Kimsey, equity trader at Frederick & Oliver, said in a note.

The MSCI World Index tumbled for the fourth straight session Tuesday, falling 4% at one point to touch its lowest level since January 28.

In London, the FTSE 100 was up 0.35%, reversing an earlier 0.5% fall. The pan-European Euro Stoxx 600 was about flat, making a comeback from a 0.6% move lower, and Frankfurt's DAX shed 0.17%, compared with a 1.1% loss earlier.

In Asia, Hong Kong's Hang Seng fell 2.6%, and the Shanghai Composite closed 0.9% lower. Tokyo's Nikkei fell 1.7%.

In response to Putin's troop order, the US told the UN Tuesday that it's set to unveil new sanctions against Russia. Biden had already signed an order Monday to prohibit trade and investment in the two separatist regions.

The UK and Europe are expected to follow with their own sanctions, which typically have an impact on specific companies or sectors of equity markets.

Sanctions against Russia, a major oil producer, could disrupt supplies of crude as well as of gas, analysts warned. Putin could also decide to turn off the taps in response to sanctions.

Brent crude futures rose 3.4% to $96.25 a barrel, and West Texas Intermediate gained 4% to $94.70 a barrel.

"Rising oil prices reflect a risk premium for possible future supply disruption," Paul Donovan, chief economist at UBS Global Wealth Management, said in a note.

"While an oil-price spike may cause a temporary blip in inflation, economic disruption is more likely from oil prices that are higher for longer."

The prospect of Russian troops crossing into Ukraine seems to have ruled out any Ukraine summit between Putin and US President Joe Biden, as proposed at the weekend, according to Donovan.

These concerns drove the 10-year Treasury yield nearly 4 basis points lower to 1.894%, from 1.930% on Friday.

Gold rose slightly to $1,901 an ounce, while fellow safe-haven the Swiss franc added 0.2% against the dollar at $0.918.

In addition to geopolitical developments, investors will be watching for Atlanta Fed President Raphael Bostic's comments later in the day.

Read More: UBS lays out the most likely scenario for how the Ukraine-Russia crisis will play out and reveals the 3 key things investors should do to protect their portfolio and deal with the turmoil