U.S. stock index futures appear to be falling today after a remarkable session on Monday when the Nasdaq was able to turn around and rebound from a nearly 5 percent decline, ending the day on a positive note.
Such a volatile session on Wall Street as yesterday was last seen around March 2020 when the pandemic hit the financial markets. Nasdaq 100, reaching its minimum yesterday, was located at 13720 points, to later rise to the maximum in the area of 14530 points. However, the index still remains in the area of potential correction, as it is about 14 percent below its November peak.
Expectations of a rate hike and companies' results
The volatility on stock markets may be justified among others by the prospect of higher interest rates in the USA. The Federal Reserve will conclude its two-day meeting on Wednesday. And while it is not expected to raise rates this time, it is expected to maintain its path of policy tightening as it battles high inflation.
Markets also await more quarterly results from U.S. companies this week, with investors looking at earnings and forecasts for signs of a possible slowdown in economic growth beyond 2021.
Dollar gains ahead of Fed decision and amid tension
The dollar index oscillated near a 2-week high near 96 points today amid concerns about a faster pace of policy tightening by the Federal Reserve and rising tensions on Russia's border with Ukraine.
Money markets seem set for the Fed's first interest rate hike this March. This could be followed by three more quarter-point increases by the end of the year.
Rising geopolitical risks could also support the dollar. NATO announced it was putting forces on alert and reinforcing Eastern Europe with more ships and fighter jets, which Russia denounced as an escalation of tensions.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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