May 25, 2022

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Stock futures rose slightly as Wall Street weighed on tensions between Russia and Ukraine, and the prospect of higher Fed rates.

Stock futures rose slightly as Wall Street weighed on tensions between Russia and Ukraine, and the prospect of higher Fed rates.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, January 18, 2022.

Brendan McDermid | Reuters

Stock futures rose slightly on Sunday evening as investors continued to monitor the rising tension between Ukraine and Russia and the possibility of a Federal Reserve interest rate hike.

Futures related to the Dow Jones Industrial Average rose 83 points, or 0.2%. S&P 500 futures rose 0.1% and Nasdaq 100 increased 0.05%.

The moves come on the heels of a difficult week for stocks that have been pressured by a Hot Inflation Report and fears of Russian attack on Ukraine. The Dow and S&P 500 indices are down 1% and 1.8%, respectively, for the week. The high-tech Nasdaq Composite is down more than 2%.

On Friday, the Dow was down 503.53 points, or 1.43%. The S&P 500 fell 1.9% and the Nasdaq Composite fell 2.8%. The declines came as the White House warned that war in Ukraine could start “any day now” and urged Americans there to leave “immediately”. Oil prices jumped on Friday, along with traditional safe havens like Treasurys.

“The real fear is that China is supporting Russia and that the relationship between China and the United States continues to deteriorate,” said Robert Cantwell, chief investment officer at Upholdings. “How it changes the relations of the United States with other great economic powers – this is really scary and will affect economic outcomes.”

Phone call over the weekend between the US President Joe Biden The Russian President Russian President Vladimir PutinBiden tried to dissuade Putin from attacking Ukraine, Failed to make a breakthrough.

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Some airlines also have Flights to Ukraine suspended or rerouted amid brewing crisiswhile the Pentagon ordered The departure of US forces in Ukraine.

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Traders are also weighing the potential impact of higher inflation on the US economy, as well as possible actions the Federal Reserve may take to cool the rise in prices.

The Labor Department reported last week that inflation in January rose 7.5%, its biggest gain since 1982. Interest rate-sensitive technology stocks were hit hard by the report, which briefly sent the 10-year Treasury yield above 2% — the first time Since 2019. The 10 years that have been trading above this level.

After the report was released, St. Louis Fed President James Bullard said he was open to a 50 basis point rate hike next month, adding that he wanted to see a full percentage of hikes by July. Sure enough, San Francisco Fed President Mary Daly said Sunday that the central bank should take a “calculated” approach when raising interest rates.

“Last week, the main story has been about inflation,” Cantwell said. “Every time the inflation number comes out, it continues to exceed expectations and while the Fed has indicated that it will raise interest rates, it hasn’t actually raised them. And the longer they wait, the faster they have to do it. Raise them.”

Economists at Goldman Sachs, too Fed expectations raised to seven hikes for 2022, and she said she expects the 10-year increase to reach 2.25% this year.

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company It also lowered the S&P 500 Index for 2022 Target price to 4900 from 5100. That would represent a return of just 2.8% from where the benchmark finished in 2021. Higher rates would lead to lower valuations, Goldman said.

Earnings are expected to rise again this week, with Nvidia, Walmart, Shopify, AMC, and more.