Cautious rise on Wall Street in anticipation of the Fed and geopolitical developments

The US market is moving slightly higher at the beginning of the trading week, as investors seem to be on hold in anticipation of the Fed meeting on Wednesday and developments on the Ukrainian front.

In particular, the industrial Dow Jones is moving with gains of 0.85% or 280 units to 33,252 units, the enlarged S&P 500 is strengthening by 0.6% to 4,228 units, as well as the technologically weighted Nasdaq which despite the negative start is now at + 0.35% at 12,908 points.

The attention of investors, not only in the US but also worldwide, continues to be focused on Ukraine, where Russian bombing and fighting continue unabated, although in recent days there have been signs of a diplomatic approach that restores cautious optimism in the markets.

In this climate, commodity prices, which have skyrocketed since the Russian invasion, are falling today, while gold prices are also declining, signaling a certain risk-taking mood by investors.

However, JPMorgan gave a “vote of confidence” in the stock market, as strategic analyst Mislav Matejka said in a note from the bank, “the recent movements in a number of commodities are extreme and if they last for a long time the financial loss will be significant. However, we still believe that the recession is not necessarily the main result and we do not see stock prices falling from current levels. ”

In any case, the focus in the coming days will be on the Fed, which meets on Wednesday and is expected to raise interest rates, trying to curb extremely high inflation.

In the shadow of the Russo-Ukrainian war, however, the Fed is no longer expected to make any aggressive moves that will further destabilize the climate.

According to Ally Lindsey Bell, “the conflict adds complexity to the Fed’s already difficult work, and the central bank is likely to remain data-dependent throughout the year as it makes interest rate decisions.”

It is recalled that the US market ended last week with significant losses, although far from the five-day low, which reached 2% for the Dow, which completed its fifth consecutive downtrend. At the same time, the S&P 500 and Nasdaq Composite fell 2.9% and 3.5% respectively, recording both their biggest weekly losses since January 21.

Thus, the key indicators have now entered a field of correction, with the Dow being almost 11% below its record, the S&P 500 13% below its own, and the technologically weighted Nasdaq, which carried the heaviest weight of the sell- off, in a bear market, now more than 20% away from the historical high of November.