On a Monday morning in mid-March 2022, American stock futures lifted as Russian and Ukrainian negotiators met again, offering a fragile hope that the war might pause. Yet the relief sits atop a long and tiring slide, with markets already in correction and inflation at a forty-year peak that forces the central bank toward its first rate increase since 2018. The economy is being pulled between a distant battlefield, a Chinese city shut behind pandemic walls, and the rising cost of oil and grain. Investors, having learned how quickly hope can reverse, are holding their breath until the Federal Re
Dow Futures Rise as Ukraine Talks Resume and Investors Weigh the Fed's First Rate Hike Since 2018
The bounce followed a bad stretch: five straight losing weeks for the Dow
Mark
Futures are up more than a percent. Is that the story?
Mimi
It's the headline, but the mood underneath is wary. The Dow has lost five weeks running and the indices are in correction territory, so this is a bounce off a low.
Mark
What's driving it?
Mimi
The fourth round of Russia-Ukraine talks, plus Wendy Sherman saying Russia seemed willing to engage seriously. Oil also fell, which eased some pressure.
Luke
Careful, though. The hope is described as tentative, and nothing in the reporting says a ceasefire is close. A futures gain before the open isn't a settled market move either.
Mark
And the Fed?
Mimi
A 25 basis point hike is widely expected Wednesday, the first since 2018, with inflation at 7.9%. Powell's comments afterward may matter as much as the decision.
Luke
Worth noting that 'widely expected' and 'likely the start of a series' are expectations, not decisions. Goldman's cut to 4,700 is one bank's forecast too.
Mark
What else is weighing?
Mimi
China. Shenzhen is locked down, Tencent may face a record fine per the Wall Street Journal, and Chinese tech stocks fell on delisting fears.
Luke
That fine is a report, not a confirmed penalty. And the claim that Moscow asked Beijing for military equipment comes from U.S. officials, not independent confirmation.
Le Pouls
- Futures jumped more than one percent on the news of a fourth round of Russia-Ukraine talks, but traders refused to trust the rally.
- Five straight losing weeks have pushed the major indexes into correction, and every bounce now meets a wall of doubt.
- The Federal Reserve is poised to raise rates for the first time since 2018, with inflation stubbornly at 7.9 percent.
- Oil prices are retreating from their highs, yet Shenzhen's lockdown and a looming Tencent fine keep the outlook fragile.
- The market is waiting on Wednesday's Fed decision and Jerome Powell's words, which will decide whether this calm holds.
On a Monday morning in mid-March 2022, American stock futures lifted as Russian and Ukrainian negotiators met again, offering a fragile hope that the war might pause. Yet the relief sits atop a long and tiring slide, with markets already in correction and inflation at a forty-year peak that forces the central bank toward its first rate increase since 2018. The economy is being pulled between a distant battlefield, a Chinese city shut behind pandemic walls, and the rising cost of oil and grain. Investors, having learned how quickly hope can reverse, are holding their breath until the Federal Reserve speaks on Wednesday.
At seven on Monday morning, March 14, 2022, Dow futures were climbing, up roughly 345 points, as Russian and Ukrainian negotiators sat down for a fourth round of talks. Hopes for a ceasefire had risen, though only tentatively, and U.S. officials said Moscow appeared somewhat more willing to engage seriously. The rally was a welcome change after a punishing week. The Dow had fallen for a fifth consecutive week, and the major indexes had slipped into correction, more than ten percent below their highs.
The mood remained wary. Goldman Sachs trimmed its year-end S&P 500 target to 4,700, pointing to the surge in commodity prices caused by the war. Attention was fixed on Wednesday's Federal Reserve meeting, where a first rate hike since 2018 was widely expected, with inflation at a forty-year high of 7.9 percent. Investors would also watch Chairman Powell closely, since the war was worsening global supply disruptions and clouding the outlook.
Elsewhere, pressure was building. Washington and Beijing were preparing their first high-level in-person talks since the invasion, after reports that Moscow had sought Chinese military equipment. In China, Covid cases hit a two-year high, and Shenzhen, the country's main tech hub, was locked down. Tencent also faced a potential record fine over WeChat Pay, and Chinese tech shares fell sharply. Oil eased on diplomatic hopes and the lockdown, though it remained far above recent levels. Gold slipped, and the day's outcome depended on what the Fed and the talks would bring.
At 7 AM Eastern on Monday, March 14, 2022, Dow Jones futures were up 345 points, or 1.1%, pointing to a higher open on Wall Street. The other two major index futures were also in the green, one up 38 points (0.9%) and another up 80 points (0.6%). The source text does not name those contracts, so the figures are reported here as given.
The lift came from diplomacy. Russia and Ukraine were holding a fourth round of talks that day, and hopes of progress toward a ceasefire had risen, though only tentatively. On Sunday, U.S. Deputy Secretary of State Wendy R. Sherman said Russia was showing signs it might be willing to engage seriously.
The bounce followed a bad stretch. The Dow fell 2% last week, its fifth losing week in a row. The other two benchmarks dropped 2.9% and 3.5%. All of these indices have slipped into correction territory, more than 10% below their all-time highs.
Goldman Sachs offered a sober view in a note. It now expects the S&P 500 to end 2022 about 1% lower and cut its year-end target to 4,700 from 4,900, citing the surge in commodity prices driven by the conflict in Ukraine.
Beyond Eastern Europe, the week's central event is Wednesday's Federal Reserve policy meeting. The central bank is widely expected to raise rates by 25 basis points, its first increase since 2018, and that is likely to begin a series of hikes. Inflation rose last week to 7.9%, a 40-year high and far above the Fed's 2% target. Investors will also listen closely to Chairman Jerome Powell after the decision, since the economic outlook is clouded by the way the Ukraine-Russia conflict is worsening global supply disruptions.
Other threads added caution. Later Monday, the U.S. and China were set to hold their first high-level, in-person talks since Russia's invasion. That came after U.S. officials said over the weekend that Moscow had asked Beijing for military equipment in the early stages of the war. In China, a surge in Covid cases brought the highest daily figure on the mainland in two years on Sunday, and the city of Shenzhen, the country's main tech hub, was locked down.
In corporate news, attention turned to Tencent Holdings after the Wall Street Journal reported that the Chinese tech giant faces a potential record fine for violations of central bank regulations by its WeChat Pay mobile network. Chinese tech stocks as a group traded sharply lower on fears that a number of companies could be delisted from New York for failing to meet auditing requirements.
Oil moved the other way. Prices weakened for a second stretch, extending last week's decline on hopes for diplomatic progress and on the Chinese lockdown. By 7 AM ET, one futures contract was down 4.9% at $104.03 a barrel and the other had fallen 3.9% to $108.28. Gold fell 1% to $1,965.30 an ounce, and one currency pair traded 0.5% higher at 1.0964.
The next fixed point is Wednesday's Fed decision and Powell's remarks, with the Ukraine talks, China's outbreak and the Tencent fine all still unresolved.
Citations marquantes
Russia was showing signs it might be willing to seriously engage in talks.— U.S. Deputy Secretary of State Wendy R. Sherman (paraphrased)
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War & Conflict