Before the U.S. stock market on February 23, U.S. stock index futures rose one after another, with Dow futures up 0.72%, Nasdaq futures up 1.06%, and S&P 500 futures up 0.73%.
The Ukraine crisis has pushed the S&P 500 into correction range as investors are watching the latest developments in the Ukraine crisis, with U.S. stock index futures and Treasury yields rising.
After Russia deployed troops in The Donbass region of Ukraine, the S&P 500 fell for several consecutive days, more than 10 percent from the all-time high set on Jan. 3.
The West imposed sanctions on Russia
According to the Russian media quoted by the Global Network, on Tuesday, local time, the Russian Federation Committee, that is, the upper house of the Russian Parliament, voted to approve Russian President Putin's request for the use of Russian armed forces abroad.
The Biden administration will also ban U.S. financial institutions from handling transactions with Russian banking giant VEB and its military banks, which have more than $80 billion in assets. This sanction against VEB amounts to cutting off the bank's dollar trading activities.
Biden said sanctions on Russian sovereign debt would cut off the Russian government's financing to the West. In addition, the European Union, the United Kingdom, Canada, Australia and Japan have also imposed or proposed restrictions on Russian companies, individuals and financial markets.
Investors say the impact on stock and bond markets is particularly difficult to predict, depending on the rapidly evolving diplomatic and military landscape, and rising energy prices could also have spillover effects on inflation in Western economies.
After two years of accommodative monetary policy, traders are already grappling with the Imminent Fed rate hike.
The Fed's dovish officials have called for a "substantial" policy shift while downplaying the need for aggressive policy tightening. Another official opposed a 50 basis point rate hike next month.
In their speeches on Friday, Chicago Fed President Evans and New York Fed President Williams implicitly reinforced signals that the Fed would raise rates by 25 basis points at its March meeting, even as core officials remained open about how many basis points would eventually need to be raised.
According to the Wall Street Journal, Brian O'Reilly, head of market strategy at Mediolanum Asset Management, said:
We may not see the expected reaction until the market sees the actual situation.
We are now in a wait-and-see state to see how things will develop.
O'Reilly added that data that shows strong economic growth is helping equities cope with the crisis to a large extent. Data from IHS Markit on Tuesday showed that the U.S. Composite Purchasing Managers' Index (PMI) rose to a two-month high in February, suggesting the economy is gradually gaining momentum.
U.S. Treasury yields rose Oil prices fell slightly
In the bond market, the yield on the 10-year Treasury rose to 1.979% from 1.947% on Tuesday, and the yield on the 2-year Treasury rose to 1.612%.
According to EPFR Global as of Wednesday, U.S. sovereign debt attracted $7.4 billion inflows, the highest level since the outbreak began.
In commodity markets, oil prices fluctuated little, with only a slight decline. As of now, global oil benchmark Brent crude futures fell 0.11% to $93.75/b, and WTI crude fell 0.1% to $91.82/b.
Earlier, Germany said it would stop approving the Nord Stream 2 gas pipeline from Russia. Natural gas futures in Europe extended their gains.
Overseas stocks rose. Europe's STOXX 600 rose 0.81%, the Stoxx 50 rose 1.17%, and automotive and chemical stocks led the gains.
Among European stocks, shares of Dutch beverage company JDE Peet's rose 7.7 percent. The company previously said its profits doubled last year due to the removal of coronavirus restrictions. Barclays said its shares rose 3.5 percent after rising net profit in the fourth quarter.
German energy company Uniper fell 3 percent after losing money in 2021, largely due to losses in hedging positions due to sharp fluctuations in the natural gas, electricity and carbon markets.
The Shanghai Composite Index rose 0.9 percent and Hong Kong's Hang Seng Index rose 0.6 percent. The Japanese market is closed due to holidays.
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