Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, March 11, 2022.
Brendan McDermid | Reuters
Futures rose in overnight trading on Sunday ahead of a key week as the Russia-Ukraine war continues to escalate and the Federal Reserve is likely to raise interest rates for the first time since 2018.
Dow Jones Industrial Average futures are up 150 points. S&P 500 futures were up 0.5% and Nasdaq 100 futures were up 0.6%.
Fighting has increased around the Ukrainian capital Kyiv, while Russian forces bombard cities across the country, killing civilians could not escape. The financial impact of tough Russian sanctions will become more concentrated in the coming days ahead of scheduled sovereign bond payments.
Meanwhile, the Fed is expected to increase its target provided funds rate by a quarter of a percentage point from zero at the end of the two-day meeting on Wednesday. Investors are also looking to the central bank for fresh forecasts on exchange rates, inflation and the economy, amid uncertainty from escalating geopolitical tensions.
“For now, the Fed is expected to be cautious when it comes to rate policy in 2022, given the conflict in Ukraine,” said Lindsey Bell, director of markets and currency strategist at Ally. “The conflict is complicating the Fed’s already hard work. The central bank will likely remain data-dependent as it makes rate decisions throughout the year.”
The Dow fell 2% last week, suffering its fifth straight weekly decline. The S&P 500 and Nasdaq Composite fell 2.9% and 3.5% respectively last week, both recording their biggest weekly declines since Jan. 21.
The major averages have all sunk into correction territory as geopolitical risks and inflation fears drive asset prices lower. The blue-chip Dow is down nearly 11% from its all-time high, while the S&P 500 is down nearly 13% from its all-time high. The tech-heavy Nasdaq has borne the brunt of the sell-off, down more than 20% from its record high in November.
Adam Crisafulli, founder of Critical Knowledge.
