U.S. stock futures rose in pre-market trading on Tuesday after hawkish remarks by Federal Reserve Chairman Jerome Powell ended last week’s winning streak on Wall Street during the session. former.
Contracts linked to the S&P 500 rose 0.3% to 4,467.25 at 7:15 a.m. ET, and futures on the Dow Jones Industrial Average gained 160 points, or about 1.5%, to 34,602 .00. Nasdaq Composite futures rose 0.3% to 14,412.00. The moves follow a choppy session on Monday that saw all three indexes close lower to start the week after Powell signaled the central bank was ready to act more aggressively to contain inflation.
The Fed leader reiterated in comments to the National Association for Business Economics on Monday that policymakers would look to higher short-term interest rates “if needed” to mitigate rapidly rising price levels. , with the aim of bringing inflation back to an annual rate. around 2% while maintaining a low unemployment rate.
“The instability is directly related to commentary,” Robert Schein, chief investment officer at Blanke Schein Wealth Management, told Yahoo Finance Live on Monday. “As soon as Federal Reserve Chairman Jerome Powell said that exact comment today, markets sold off.”
The Fed “is going to tighten until something breaks,” he added. “It’s either break the back of inflation or growth will slow.”
Powell’s comments come just a week after investors met the central bank’s long-awaited decision to raise its benchmark federal funds rate by 0.25% (to a target range of 0.25% to 0). .50%) with temporary relief after the rise came in at par with what market participants expected.
While they provided some clarity for traders who for months waited for the Fed to take action to tighten monetary conditions, geopolitical unrest in Eastern Europe and their economic record continue to cloud the way forward. bank in the fight against inflation. The Fed is also tasked with starting quantitative tightening or removing assets from its balance sheet of nearly $9 trillion.
The CPI print is “not going to look nice,” Johan Grahn, head of ETFs at Allianz Investment Management, told Yahoo Finance Live. “That will be the indicator the Fed is going to hang its hat on.”
Russia’s war in Ukraine also continued to be the focus of investors’ concerns. On Monday, Ukraine refused to hand over its heavily attacked port city of Mariupol to Russian forces as the civilian death toll rose. Energy and commodity prices have soared amid the latest developments in Russia’s war in Ukraine.
US crude oil prices climbed more than 6% to session highs to $112 a barrel, and Brent crude, the international standard, rose above $116 a barrel. Elsewhere in the commodity markets, prices for aluminum, palladium and wheat also rose on Monday.
Officials from both countries have sporadically signaled a possible negotiation, but attempts at talks have so far proved fruitless. Ukrainian President Volodymyr Zelenskyy recently warned that if talks with Vladimir Putin failed, it could mean the start of a third world war.
7:23 a.m. ET: Bitcoin hits $42,000 as hedge fund Bridgewater plans crypto foray
Bitcoin (BTC-USD) surged above the $42,000 mark following news that Ray Dalio’s Bridgewater Associates, the world’s largest hedge fund, is set to invest in the digital asset.
The price of the coin jumped 3.7% to $42,888.33 on Tuesday morning at 7:20 a.m. ET.
Ethereum (ETH-USD) also gained on the news, rising 3.7% to $3,022.01 early Tuesday. The cryptocurrency rose 16.5% in one week to $3,020 after its co-founder Vitalik Buterin appeared on the cover of Time magazine.
Bridgewater’s plan to invest in bitcoin underscores the confidence that institutional finance has in a long-term upward trajectory for the cryptocurrency. The hedge fund is one of many professional investment management firms that are adding bitcoin to their investment portfolios.
7:00 a.m. ET: Contracts on the S&P 500, Dow and Nasdaq rise after Powell remarks
Here are the main moves in the markets ahead of Tuesday’s open:
S&P 500 Futures Contracts (ES=F): +16.00 points (+0.36%) to 4,468.25
Dow futures (JM=F): +169.00 points (+0.49%) to 34,605.00
Nasdaq futures contracts (NQ=F): +46.25 points (+0.32%) to 14,416.75
Raw (CL=F): -0.62$ (-0.55%) at 111.50$ per barrel
Gold (CG=F): -$1.90 (-10.00%) to $1,927.60 per ounce
10-year cash flow (^TNX): +0.00 bps for a yield of 2.315%
6:00 p.m. ET Monday: Stock futures rise slightly after indices snap winning streak
Here’s where the markets were trading ahead of Monday’s overnight session:
S&P 500 Futures Contracts (ES=F): +4.00 points (+0.09%) to 4,456.25
Dow futures (JM=F): +47.00 points (+0.14%) to 34,483.00
Nasdaq futures contracts (NQ=F): +16.75 points (+0.12%) to 14,387.25
Raw (CL=F): +$0.78 (+0.70%) at $112.90 per barrel
Gold (CG=F): +$6.80 (+0.35%) at $1,936.30 per ounce
10-year cash flow (^TNX): +4.3 bps for a yield of 2.191%
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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