Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, March 11, 2022.
Brendan McDermid | Reuters
Stock futures rose in overnight trading on Sunday ahead of an important week as the war between Russia and Ukraine continues to escalate and the Federal Reserve may raise interest rates for the first time since 2018.
Futures on the Dow Jones Industrial Average gained 150 points. S&P 500 futures rose 0.5% and Nasdaq 100 futures rose 0.6%.
Fighting raged around the Ukrainian capital Kyiv while Russian forces bomb cities Across the country, killing civilians who can not escape. The financial ramifications of severe Russian sanctions will become an even more acute focus in the coming days before the scheduled sovereign bond payments are made.
Meanwhile, the Fed is expected to do so Raise the target federal funds rate by a quarter of a percentage point from zero at the end of its two-day meeting on Wednesday. Investors are also looking to the central bank on its new forecasts for rates, inflation and the economy, given the uncertainty of escalating geopolitical tensions.
“For now, the Fed is expected to be cautious when it comes to interest rate policy in 2022, given the conflict in Ukraine,” said Lindsey Bell, chief markets and financial analyst at Ally. “The conflict adds complexity to the Fed’s already difficult task. The central bank is likely to remain data-driven as it makes interest rate decisions throughout the year.”
The Dow was down 2% last week, suffering its fifth consecutive negative week. The S&P 500 and Nasdaq Composite indices fell 2.9% and 3.5% last week, respectively, both posting their biggest weekly losses since Jan. 21.
All major averages retreated into correction territory as geopolitical risks and inflation fears dragged down asset prices. The Dow Jones excellent is down nearly 11% from its record high, while the S&P 500 is down nearly 13% from its all-time high. The tech-heavy Nasdaq bore the brunt of the selling, dropping more than 20% from its November high.
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