Investors were thinking that the Federal Reserve could take a more aggressive approach to controlling inflation, so stock futures fell slightly after rising on Tuesday evening during normal trading days.
S & P 500 contracts have fallen. After sliding on Monday, the index rose by more than 1% during a regular session on Tuesday. Technology stocks outperformed and the Nasdaq Composite rose nearly 2%.
US stocks rose for the fifth time in six sessions on Tuesday as investors shook off volatility following FRB Chairman Jerome Powell’s hawkish remarks earlier this week. At a US corporate economist meeting on Monday, Powell said the central bank “will take the necessary steps to ensure a return to price stability” and said it intends to raise benchmark rates by more than 25 basis points. .. The next meeting if you think it is necessary to curb soaring prices.
Less than a week after Powell’s last public statement at the end of the Fed’s last policy-making meeting last Wednesday, these statements were considered a surprisingly rapid change in tone. It highlighted the urgency that major policy makers saw in dealing with inflation.
“My belief goes in front [Monday] The Federal Reserve has sincerely believed that inflation was temporary in nature. ” .. “From the perspective of Jerome Powell [Monday] It means that his self-confidence is shaking. “
“If we have another high inflation rate, the market could raise rates by 50 basis points, and even between meetings, and the Fed is really afraid that inflation will go away. I think we have to start pricing. Control, “he added.
Last week, the Fed raised interest rates for the first time since 2018, raising benchmark interest rates by 25 basis points from near zero levels. The Federal Open Market Committee (FOMC) also telegraphed as of last Wednesday that its median members expect another six quarters of rate hikes this year.
The story continues
Towards this, stocks were traded with high volatility throughout 2022 as investors priced at higher interest rates or otherwise tighter financial conditions could put pressure on stock valuations. Uncertainty about the progress of Russia’s invasion of Ukraine continues to be a concern. Still, some strategists pointed out that investors need less to worry about the impact of the Fed’s start of the hiking cycle, at least in the short term.
Deutsche Bank strategists, including Jim Reed, head of credit strategy and thematic research, said: “Equities tend to continue to rise for nine months after the Fed began tightening.” It will be volatile and more likely to experience drawdowns. 10-year Treasury yields will begin to rise and prices will fall, but will eventually level off as the market increases the likelihood of the next recession. And it will fall. You should not worry about the short-term impact. “
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6:10 pm ET Tuesday: Stock futures fall
Here are the locations where major stock index futures opened on Tuesday evening:
S & P 500 Futures (ES = F).: -2.25 points (-0.05%) to 4,402.75
Dow Futures (YM = F).: -10 points (-0.03%) to 34,699.00
NASDAQ futures (NQ = F): -12 points (-0.08%) to 14,642.00
New York, New York-March 16: Traders will work on the floor of the New York Stock Exchange (NYSE) in New York City on March 16, 2022. Dow extended yesterday’s rally and started the day in a positive territory. (Photo by Spencer Pratt / Getty Images)
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Emily McCormick is a Yahoo Finance reporter. Follow her on Twitter
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