# Stocks steady on hopes for diplomacy in Ukraine
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-02-18
Category: TRADING
Category URL: https://financedigest.com/category/trading
Meta Title: S&P 500 futures jump on U.S.-Russia talks, easing
Meta Description: U.S. stock futures rise as Secretary of State agrees to meet Russian FM, easing tensions. Analysts cautious about potential risks despite positive news.
URL: https://financedigest.com/stocks-steady-on-hopes-for-diplomacy-in-ukrainehtml

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By Tom Westbrook

SINGAPORE (Reuters) – U.S. [stock futures bounced on Friday and selling pressure eased](https://www.financedigest.com/stocks-bonds-extend-rally-on-hopes-rate-hikes-ease.html "Stocks, bonds extend rally on hopes rate hikes ease") in Asian share markets after the U.S. Secretary of State agreed to a meeting with Russia’s foreign minister, raising [hopes for a diplomatic solution to the East-West standoff over Ukraine](https://www.financedigest.com/gazprom-gas-cut-tempers-economic-hopes-after-ukraine-grain-deal.html "Gazprom gas cut tempers economic hopes after Ukraine grain deal").

S&P 500 futures jumped 0.5% on the news and Nasdaq futures rose 0.6%. MSCI’s broadest index of Asia shares outside Japan was last down 0.5%, but markets in Tokyo, [Hong Kong](https://www.financedigest.com/screening-of-winnie-the-pooh-horror-film-cancelled-in-hong-kong.html "Screening of ‘Winnie the Pooh’ horror film cancelled in Hong Kong"), Sydney and Seoul all pared deeper morning losses.\[.T\]\[.HK\]\[.KS\]\[.AX\]

U.S. Secretary of State Antony Blinken has accepted an invitation to meet with [Russian Foreign Minister Sergei Lavrov late next week provided Russia does not invade Ukraine](https://www.financedigest.com/ukraine-grants-citizenship-to-top-russian-journalist-who-denounced-war.html "Ukraine grants citizenship to top Russian journalist who denounced war"), the U.S. State Department said.

It’s better news than what we had yesterday,” said Kyle Rodda, an [analyst at IG Markets](https://www.financedigest.com/coffee-bean-grinders-market-is-set-to-witness-a-cagr-of-8-1-8-9-during-2021-2031-says-fmi-analyst.html "Coffee Bean Grinders Market is set to witness a CAGR of 8.1%- 8.9% during 2021-2031, Says FMI Analyst") in Melbourne. But we’ve seen diplomatic talks go nowhere before, and the troops are still on the border, so [risks remain.”](https://www.financedigest.com/with-greater-freedom-comes-heightened-risk-how-to-help-ensure-consumer-data-remains-secure-in-an-open-banking-system.html "With Greater Freedom Comes Heightened Risk: How to Help Ensure Consumer Data Remains Secure in an Open Banking System")

[Wall Street](https://www.financedigest.com/asian-stocks-edge-up-before-u-s-jobs-data-defying-wall-street-selloff.html "Asian stocks edge up before U.S. jobs data, defying Wall Street selloff") had taken a dive overnight, with the S&P 500 dropping 2.1% and the Nasdaq off 2.9% – while gold shot to an eight-month peak – on renewed U.S. [warnings of an imminent Russian invasion](https://www.financedigest.com/stocks-extend-sell-off-as-u-s-warns-of-imminent-russian-invasion-of-ukraine.html "Stocks extend sell-off as U.S. warns of imminent Russian invasion of Ukraine").

Investors fear a wider war as one of the deepest crises in post-Cold War relations plays out, with Russia wanting security guarantees, including Ukraine’s never [joining NATO](https://www.financedigest.com/finland-will-join-nato-on-tuesday-stoltenberg.html "Finland will join NATO on Tuesday – Stoltenberg").

Overnight, [safe-haven currencies such as the Japanese yen and Swiss franc](https://www.financedigest.com/swiss-franc-grapples-with-safe-haven-identity-crisis-after-credit-suisse.html "Swiss franc grapples with safe-haven identity crisis after Credit Suisse") climbed to two-week highs on the dollar and they retreated a little bit in Asia trade. \[FRX/\]

Treasuries likewise gave back some overnight gains, with the benchmark 10-year [yield last up two basis points](https://www.financedigest.com/traders-ramp-up-bets-on-75-basis-point-ecb-sept-hike-bond-yields-jump.html "Traders ramp up bets on 75 basis-point ECB Sept hike, bond yields jump") (bps) to 1.9876%. Two-year yields also rose two bps to 1.4909%. \[US/\]

[Oil dipped and Brent crude](https://www.financedigest.com/oil-near-flat-as-us-crude-stock-draw-contends-with-economic-concerns.html "Oil near flat as US crude stock draw contends with economic concerns") futures were last down 0.5% on Friday at $92.47 a barrel, more than 4% below Monday’s peak, and U.S. crude fell 0.5% to $91.26 a barrel. Gold dipped about 0.4% from its high to $1,889 an ounce. \[GOL/\]

RATES RACE

Concern about conflict in Ukraine comes with markets already rattled by a [rates outlook that could hold as many as seven Federal Reserve increases in the year ahead](https://www.financedigest.com/hopes-of-slowdown-in-rate-hikes-bolster-shares-ahead-of-u-s-gdp.html "Hopes of slowdown in rate hikes bolster shares ahead of U.S. GDP").

St. Louis Fed president James Bullard on Thursday reiterated his call for the Fed funds rate to be raised to 1% by [July](https://www.financedigest.com/in-renewed-push-spain-to-tender-eu-funds-for-evs-batteries-in-july.html "In renewed push, Spain to tender EU funds for EVs, batteries in July") to combat stubbornly high inflation and Fed funds futures price about a 1/3 chance of a 50 bps hike next month to begin.

Cleveland [Fed President Loretta Mester said the pace of hikes](https://www.financedigest.com/stocks-euro-gain-amid-divergent-fed-ecb-rate-hike-outlooks.html "Stocks, euro gain amid divergent Fed, ECB rate hike outlooks") will need to be faster than previous cycles.

Markets have been particularly volatile recently and virtually everyone adjusted their [Fed](https://www.financedigest.com/markets-start-signalling-fed-may-be-going-too-far-amundi.html "Markets start signalling Fed may be going too far – Amundi") hike calls higher,” said NatWest Markets’ strategist Jan Nevruzi.

“The consensus seems to range between 5 (our view) and 7 (every meeting) hikes and I do believe the right number lays somewhere in between. Given the strong growth trend and elevated inflation, it wouldn’t be too surprising to [see a hike](https://www.financedigest.com/analysis-weary-investors-see-little-respite-to-fed-hike-gloom.html "Analysis-Weary investors see little respite to Fed hike gloom") at every meeting from now on,” Nevruzi said.

On Friday, Japan reported a fifth straight month of inflation, with energy prices [posting their biggest annual](https://www.financedigest.com/deutsche-post-raises-annual-dividend-warns-of-challenging-2023.html "Deutsche Post raises annual dividend; warns of challenging 2023") rise in 41 years.

Elsewhere in currency markets the [dollar held its bid and was firm](https://www.financedigest.com/dollar-stands-firm-while-traders-await-cpi.html "Dollar stands firm while traders await CPI") at $1.1359 per euro and $0.7181 per Aussie.

(This story corrects to add dropped word in paragraph 3)

(Editing by Lincoln Feast)


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