U.S. stock futures are facing the brunt of the equities meltdown along with a global stock market crash. Dow Futures was down by over 800 points while Nasdaq 100 Futures and S&P 500 Futures were lower by 2.48 per cent and 3.05 per cent. With Russia invading Ukraine after Vladimir Putin announcing military operation in Ukraine, the equity prices have taken a toll big time.
For the first time since the depths of the pandemic, Nasdaq 100 Index is expected to fall into a bear market. S&P 500 is already down more than 15% year-to-date, signaling a technical correction.
Besides the escalating tensions between Russia and Ukraine on top of rising oil prices, investors are also concerned about the surging inflation and a Federal Reserve March meeting to signal jike in interest rates.
FED meeting is scheduled for March 15-16 and the probability in the current context is a quarter-percentage point rate hike next month.
Since the month’s beginning, more than a third of the stocks in the Nasdaq 100, which represents the exchange’s largest non-financial companies are down at least 50% from their 52-week highs. Meanwhile, the percentage of stocks on the Nasdaq Composite that set new 52-week highs stood at just 1% on Wednesday.
At a time when investors are grappling with geopolitical tensions in Russia, which threaten to disrupt global oil markets, there is a higher probability of inflation increasing as energy prices go higher.
The tech and growth stocks, whose valuations had ballooned during the pandemic remains out of favour as of now, as borrowing costs are expected to rise much higher from current levels. Big Tech were the favorites among the investors since the pandemic shuttered the U.S. economy in 2020.
The performance of the top US stocks are not similar across the spectrum. This month, Facebook parent Meta Platforms Inc. posted the worst one-day drop in market cap in stock-market history while Amazon.com Inc. posted the biggest single-day gain in market capitalization in U.S. history.
The current turmoil in the market may provide an opportunity to long term investors to get an exposure in US stock market. The US ETF’s provides an access to investors who want to invest in US markets.