Stock futures opened lower on Thursday evening after swinging big in positive territory during the normal trading day.
Contracts in the S&P 500 are down. The index is up 1.5% during Thursday’s session, erasing 2.6% losses at session lows. The Dow Jones Industrial Average gained after losing more than 800 points at its worst level today. The Nasdaq Composite Index rose 3.3% in its best session since Jan. 31.
Stocks made up for their losses, rising for the first time in five sessions, even on the back of the Russian invasion of Ukraine. Although stocks fell and energy commodity prices rose in recent sessions as investors considered the financial market effects of the conflict, markets were at least temporarily flat on Thursday before more evidence emerged of any fallout.
“The market is going to overreact to good and bad news. The news this morning was sell, sell, sell,” Alan Bomer, chief investment officer at Momentum Advisors, told Yahoo Finance Live on Thursday. “And now we have analyzed the news … I think what the market has decided is this Ukraine and Russia [situation] It’s a tragedy [but] It doesn’t have to be a global event that will send us into a deep recession.”
“I think the biggest factor right now is the Federal Reserve,” he added. “And if anything, this Russian event could make the Fed a little less hawkish.”
Indeed, market participants have done so Now pricing is far less likely that Fed officials will load their rate-raising cycle It raised interest rates by 50 basis points at the end of their March meeting. The last time the Fed raised rates by more than 25 basis points in a single meeting was in 2000. While such a move would be a powerful turnaround for the Fed to begin effectively curbing inflation, it could also lead to further turmoil. Financial markets that have endured increased volatility this year are now also spooked by the specter of another international conflict.
Seema Shah, Senior Principal Strategist at Sharing Global Investors, wrote in an article: email. The equity plunge began in January and was driven, at least initially, by inflation fears and expectations of sharper central bank tightening.
“Energy prices have been steadily rising throughout the pandemic recovery and in response to lower-than-expected OPEC+ production. Concerns about the Fed’s balance sheet cut triggered the credit gap in early January,” she added. “The situation between Russia and Ukraine is certainly significant – but it has simply exacerbated already difficult market conditions.”
Other strategists have also suggested that US stock trading depends mainly on monetary policy and earnings impacts from any effects of recent geopolitical tensions.
“The exposure of the US economy is very low directly to Ukraine and the situation with Russia. However, the important thing here is, how does it affect inflation expectations? And that’s really what we’re watching,” Anna S. Hahn, an equity expert at Wells Fargo Securities, told Yahoo Finance Live on Thursday. “As inflation becomes variable for businesses, the potential for earnings erosion, or the potential for it to direct the Fed to speed up or slow down the rate-raising cycle — that’s what we’re looking for.”
6:01pm ET Thursday: Stock futures open lower after rally
Here are the main moves in the markets on Tuesday evening:
S&P 500 futures contractsES = F.): -21.5 points (-0.5%) to 4,262.50 points
Dow futures contractsYM = F.): -145 points (-0.44%) to 33,011.00
Nasdaq futures contractsNQ = F.): -13879.75 points (-0.62%) to 13879.75 points
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter
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