S&P 500 futures fall on geopolitical fears, focus on Fed and China speeches

• S&P 500 futures pull back from 11-week highs, snapping a two-day winning streak.
• US 10-year and 2-year Treasury yields continue to fall after the first daily loss in four days.
• Fears of a Taiwan invasion, the Fed’s hawkish tone and concerns about the US debt ceiling weigh on sentiment.
• The Fed’s Beige Book will be the key to the day.

Market sentiment remains unstable after the mixed close on Wall Street, amid the geopolitical fears coming from China and Russia. Rumors about the US debt ceiling and hawkish expectations around the Federal Reserve (Fed) bolster caution.

By portraying the feeling, S&P 500 futures retrace from highest levels since early Februarymarked the day before, and are trading with slight losses around 4,140 points during the early hours of the European session on Wednesday. It should be noted that the futures of the S&P 500 breaks a streak of two days of gains.

Elsewhere, 10-year and 2-year US Treasury yields fell for the first time in four days late Tuesday, weakening around 3.59% and 4.21% at time of writing.

Recent talk surrounding the US House of Representatives Chinese Committee debate on the scenario of an invasion of Taiwan and a likely drag on the US debt ceiling decision. appear to exert downward pressure on the risk profile. The recently bearish US data could be placed along the same lines and hawkish expectations for the Fed. Note that mixed earnings reports have also put pressure on stock buyers of late.

Recently, Netflix it tumbled after the market closed on Tuesday as its earnings missed expectations.

On the other hand, on Tuesday, the figures for housing starts and construction permits in the US altered the environment with bearish data for March. Home starts fell to 1.42 million, from 1.43 million previously and 1.40 million expected by the market, while building permits fell to 1.413 million, from 1.55 million previously and 2.2 million expected by analysts.

Separately, the president of the St. Louis Federal Reserve Bank, James Bullard, stated in an interview with Reuters on Tuesday that ” interest rates will have to continue rising in the absence of clear progress on inflation“. On Monday, Richmond Fed President Thomas Barkin stated that wants to see more evidence that inflation settles back on target. Recently, Atlanta Fed President Raphael W. Bostic mentioned that the economy continues to gain momentum, but that inflation is too high.

On the other hand, Bloomberg published news suggesting that China’s role in the war between Russia and Ukraine joins the US president’s resistance Joe Biden in the debt limit negotiation to also weigh in the feeling.

Besides, the monthly publication of the Fed’s Beige Book could entertain traders, while the final week of comments from Federal Reserve (Fed) officials before the quiet period, which begins this Saturday, as well as talks with China, will be key to building fresh momentum.