Stocks Slip After-Hours As US Intel Chief Warns Of Russian ‘Nuclear Threats’

After a strong day in stocks – which followed two days of big gains – US futures are fading after hours following the release of a report from US Defense Intelligence Agency claiming that Putin can be expected to brandish threats to use nuclear weapons against the West if stiff Ukrainian resistance to Russia’s invasion continues

“Protracted occupation of parts of Ukrainian territory threatens to sap Russian military manpower and reduce their modernized weapons arsenal, while consequent economic sanctions will probably throw Russia into prolonged economic depression and diplomatic isolation,” Lieutenant General Scott Berrier, director of the Defense Intelligence Agency, said in its new 67-page summary of worldwide threats.

The combination of Ukraine’s defiance and economic sanctions will threaten Russia’s “ability to produce modern precision-guided munitions,” Berrier said in a statement prepared for the House Armed Services Committee.

“As this war and its consequences slowly weaken Russian conventional strength,” Berrier added, “Russia likely will increasingly rely on its nuclear deterrent to signal the West and project strength to its internal and external audiences.”

The reaction – after ignoring hawlish comments from Blinken earlier in the day – is clear as US equity futures give back half of their gains for the day…

Bear in mind, this latest report follows Putin’s decision to put his nuclear deterrence forces “on alert,“ and echoes comments from the heads of the CIA, FBI, NSA, Defense Intelligence Agency and the Director of National Intelligence who all spoke at a House Select Committee on Intelligence hearing warning that Putin is ‘desperate’ to end the conflict over Ukraine, with some privately suggesting he could set off a tactical nuclear weapon in a Ukrainian city to get the job done. And then there was United Nations Secretary-General Antonio Guterres on Monday soundiong the alarm over Russia raising the alert level for its nuclear forces, describing it a ‘bone-chilling development’ and added that the prospect of nuclear conflict was back within realm of possibility,” according to Reuters.