Home > Blog > Markets commentary > US stocks turn higher as investors await Fed rate decision on Wednesday

The war in Ukraine has tended to increase uncertainty regarding inflation and growth prospects. When and with what consequences this war will end is pure speculation, but capital markets are expected to build a certain immunity to the headline risks in the coming weeks. The medium- to long-term consequences, on the other hand, could be significant. It is possible that we are at the beginning of a new bloc formation or a new Cold War. This would put a significant damper on globalization and further fuel higher structural inflation. 

US stock futures edged higher on Tuesday as Wall Street found some footing ahead of a key Federal Reserve policy meeting, where it is expected to announce another outsized rate hike to curb elevated inflationary pressures. Futures contracts tied to the three major indexes were all in positive territory. In regular trading on Monday, the Dow rose 0.64%, the S&P 500 gained 0.69% and the tech-heavy Nasdaq Composite jumped 0.76%, with all three benchmarks breaking multi-day losing streaks after last week’s selloff. Investors remained cautious amid speculations that the US Federal Reserve could deliver a bigger full percentage point rate increase, while global growth concerns kept sentiment in check. 2-Year Bond Yields Surge 

Summary

  • Asian stocks rose on Tuesday after coming under pressure in recent sessions, tracking Wall Street higher as markets stabilized ahead of an expected interest rate hike from central banks across the globe this week. 
  • Nine out of eleven S&P sectors advanced, led by materials, consumer discretionary and industrials. 
  • Treasury Two-Year Yields Climb Relentlessly Toward 4% Before Fed. Yield is heading for its steepest annual increase since 1994. 
  • A top-performing high-yield investor in China’s onshore bond market says a long-awaited turning point has arrived for the nation’s embattled property sector and it’s time to buy the dip. 
  • WTI crude futures steadied around $85.5 per barrel in subdued trade on Tuesday, as investors moved to the sidelines ahead of an expected interest rate hike from central banks across the globe this week. 
  • Ford tumbled more than 4% in extended trading after announcing that supply chain issues would cost the automaker an extra $1 billion in the third quarter. 
  • Wednesday this week a key Fed Rate Decision.  

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