The U.S. stock futures are finding an ambiguous direction from early Tuesday morning. Investors are awaiting a clear policy decision by the Fed while observing the Russia-Ukraine conflict closely. S&P 500 futures climbed 0.15%, while Dow Jones futures were flat. Nasdaq 100 futures climbed 0.34% on Friday. In the past eight, both finished their seventh negative session as S&P 500 and Nasdaq composite nosedived 0.7% and 2% respectively on Monday during regular trading. The Dow Jones Industrial Average climbed 450 points that day.
Russia and Ukraine started the next round of ceasefire talks on Monday, and investors were eyeing this situation. And among all this chaos, Russia is on the brink of paying its 117 million dollar debt.
On Monday, the United States and China officials conducted a meeting. They both have a bilateral relationship and discuss the challenges, especially the Russia-Ukraine war.
Central Investment Management’s Chief Investment Officer, Gene Goldman, said apprehensively about the market. There is substantial concern about the invasion, inflation and the Federal Reserve policies making the investors fidgety. Mr Goldman does not think that a bear market is in the cards, and likely, there will be no recession shortly. As per the fundamental data, there will be a solid economic base, he said further.
There are signals of tight monetary policies, as the central bank commences a two-day session on Tuesday. Investors are foreseeing a significant rate hike from the Fed. The increase in rate from zero to a quarter percentage point is expected from the central bank.
After a sudden surge in coronavirus cases in China, a lockdown has been announced. The production has been suspended in certain cities like Shenzhen (a core manufacturing city), which could affect the supply chain issues. Already the prices of commodities have escalated amid the Russia-Ukraine conflict. The Fed meeting will have to put up with all the inflationary concerns.
President of Wave Financial Group and a managing partner, Mr Benjamin Tsai, explained that to counter the accelerating inflation, there is no other choice left for the government but to increase rates.
There will be discussions on the reduction of Fed bond portfolio holdings.