Contracts for the S&P 500 fell, increasing losses after the blue-chip index ended Tuesday’s session lower by 1.3%. Contracts for each of the Dow and Nasdaq also extended the fall. In the bond market, the yield on the 10-year benchmark bond rose to 2.6%, marking its highest level since May 2019. Developments on Russia’s war in Ukraine and the Western response remained in the spotlight on Wednesday as the United States, the European Union and the Group of Seven prepared a new round of sanctions in the Kremlin. The United States is expected to impose sanctions on more Russian government officials and members of their families, as well as on Russian-owned companies and financial institutions. Meanwhile, aggressive comments from Federal Reserve officials also pushed US stocks higher than their last course and boosted bond yields. In particular, Federal Reserve Governor Lael Brainard said on Tuesday that the Federal Open Market Committee (FOMC) is “ready to take stronger action” if already rising inflation rates and expectations justify such moves. Speaking on the Internet, Brainard suggested that this could include aggressive interest rate hikes and a much faster withdrawal of the Federal Reserve’s balance sheet – which has so far reached almost $ 9 trillion – compared to previous periods. “Given that the recovery was much stronger and faster than in the previous cycle, I expect the balance sheet to shrink significantly faster than in the previous recovery, with significantly higher ceilings and a much shorter phase time to peaks. ceilings compared to 2017–19 “, said Brainard. He noted that the process of reducing the Fed’s balance sheet or starting a quantitative easing could only begin at the next Fed meeting in May. The story goes on Other members of the Fed also suggested that they agree to tighter policies in the short term. San Francisco Fed Chairman Mary Daley told the Financial Times on Tuesday that the case for raising interest rates by 50 basis points – or doubling the size of a typical central bank increase per session – has “increased.” “The fact is that the Fed has made it very clear; it’s crucial that they chase inflation and do whatever it takes to stop inflation,” Quincy Krosby, LPL’s chief stock strategist, told Yahoo Finance Live. Financial. “They will do it and I think the market has the feeling that this will be an unstable path.” “The Fed can go a long way, but it’s clear that this is its mission and they are going to do it in full swing – more than 2017, more than 2018,” he said, referring to the latter when the Federal Reserve suffered quantitative tightening several years ago. With US inflation still high at around 40 and forcing the Fed to tighten its grip on financial conditions, some on Wall Street have downgraded their expectations for US and global economic growth. Deutsche Bank economists said on Tuesday that they expect the US to lead to a recession by the end of next year as the Fed raises interest rates quickly to keep prices high. “We expect the US economy to be in full recession by the end of next year and the [Euro area] “In a growth recession in 2024 with unemployment rising,” said Deutsche Bank economists David Volkerts-Landau and Peter Hooper. “Our basic view is that these developments will boost growth in much of the rest of the world. Time helps to bring inflation back to mandatory levels, reducing the risk of further disruptions.” However, economists note that their call for a recession next year “is currently a way out of the consensus” – and indeed, many on Wall Street continue to see a slowdown, but not necessarily a period of negative short-term growth at home. “We do not believe the Fed will push the economy into recession,” Veronica Willis, an investment strategy analyst at Wells Fargo Investment Institute, told Yahoo Finance Live on Tuesday. “I do not think most people expect this. But we are expecting a slight slowdown in economic growth than we expected before, but again around average economic growth here in the US.” –
7:16 a.m. ET: Fall of futures contracts
This is where the markets traded on Wednesday morning:
S&P 500 Futures (ES = F): -38 points (-0.84%) at 4,482.25 Dow futures (YM = F): -214 points (-0.62%) at 34,336.00 Nasdaq Futures (NQ = F): -203 points (-1.37%) at 14,625.00 Crude (CL = F): + $ 1.42 (+ 1.39%) at $ 103.38 a barrel Gold (GC = F): + $ 4.70 (-0.24%) at $ 1,922.80 per ounce 10-year Treasury (^ TNX): +8.3 bps for a yield of 2.637%
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6:10 p.m. ET Tuesday: Share futures are up
This is where the markets traded on Tuesday afternoon as the overnight session began:
Futures contracts S&P 500 (ES = F): +5.25 points (+ 0.12%) at 4,525.50 Dow futures (YM = F): +34 points (+ 0.1%) at 34,584.00 Nasdaq Futures (NQ = F): +25.75 points (+ 0.17%) at 14,853.75
NEW YORK, NY – MARCH 30: Traders work on the floor of the New York Stock Exchange on March 30, 2022 in New York City. US stocks opened lower after the rally for the start of the week. (Photo by Michael M. Santiago / Getty Images) – Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter. Read the latest financial and business news from Yahoo Finance Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard and LinkedIn
