S&P 500 Futures fail to copy post-Fed Wall Street rally, yields stay pressured on mixed clues

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  • Market sentiment dwindles as traders rethink over post-Fed optimism.
  • China’s return, EU sanctions on Russia gain major attention.
  • Anxiety ahead of BOE, US NFP also tests buyers after a volatile day.

Global markets remain on tenterhooks during early Thursday, after witnessing a raft of positive vibes after the Fed’s action. The cautious sentiment could be linked to the pre-event anxiety, as well as multiple geopolitical and covid-linked fears that regained attention.

While portraying the mood, S&P 500 Futures fade three-day rebound from yearly lows, down 0.08% to 4,292 by the press time. It’s worth noting, however, that the US Treasury yields remain depressed after a two-day downtrend as holidays in Japan restrict bond moves in Asia.

The European Union’s (EU) sixth round of sanctions on Russia and China’s covid woes seem to challenge the market sentiment as traders from Beijing return to the desk. Also challenging the mood are chatters surrounding Northern Ireland’s (NI) elections and Sino-American tussles.

Wall Street benchmarks rallied on an average of 3.0% after the US Federal Reserve’s (Fed) 50 basis points (bps) of a rate hike and signals of the quantitative tightening (QT) failed to impress bears. The reason could be linked to Fed Chair Jerome Powell’s rejection of a rate hike worth 75 basis points (bps) in upcoming meetings.

Also likely to have underpinned the bullish bias could be softer US data, mainly relating to services activities and private employment for April.

Looking forward, the second-tier US data and the Bank of England (BOE) monetary policy meeting will be important for fresh impulse as firmer economics and tighter monetary policies propel risk-aversion, helping the US dollar and weighing on the equities. Additionally, headlines concerning the aforementioned risk catalysts will also be important for clear directions.

Also read: Forex Today: Dollar plummets as the Fed is unwilling to become much more aggressive