NEW YORK (Washington Insider Magazine) -After the S&P 500 ended in correction territory following growing tensions between Ukraine and Russia, U.S. stock market prices were up in early morning trade Wednesday.
The Dow Jones Industrial Standard futures contract gained 242 points. The S&P 500 futures increased by 0.87 percent, while the Nasdaq 100 futures increased by 1.16 percent.
The Dow Jones Industrial Average lost 483 points, or 1.42 percent, in normal trade Tuesday, marking the fourth consecutive down session. The 30-stock index had dropped over 700 points at one time. The S&P 500 index fell 1.01 percent and is currently 10.25 percent below its record closing on January 3, placing it in correction territory. For the 4th consecutive session, the Nasdaq Composite fell 1.23 percent.
President Joe Biden unveiled the first round of sanctions on Russia Tuesday afternoon. According to CNBC, the sanctions are aimed at Russian banks, the country’s sovereign debt, and 3 elite individuals.
On Tuesday, all 11 S&P 500 sectors dropped, with consumer discretionary shares leading the way with a 3% drop. Despite an increase in oil prices, energy shares fell. Brent crude rose as high as $99.50 a barrel on the international market. The US oil benchmark, West Texas Intermediate crude futures, reached a session peak of $96, the highest level since August 2014.
According to Oanda’s Ed Moya, the contagion threat would entirely flow into rising inflation as energy costs increase, derailing huge sections of the improving economy emerging from Covid.
He said that geopolitical uncertainties may lead to a delayed growth cycle, which would exclude the possibility of a half-point federal funds rate rise at the March 16th FOMC meeting.
According to the CME Group’s FedWatch program, Wall Street believes there is a 100 percent possibility of a rate rise at the Federal Reserve’s March meeting. With prices on the rise, arguments for a 50-basis-point boost at the March session were growing louder.
As conflicts among Russia and Ukraine escalate, rates have fallen, with the standard 10-year Treasury yield dropping below 2% as traders seek safe-haven assets.
According to statistics from FactSet, 78 percent of S&P 500 businesses that have reported have above profits predictions, while 78 percent have surpassed sales expectations as of Friday.
