Market Uncertainty Amid Geopolitical Unrest | June 26, 2023

As the trading week commences, stock index futures are signaling a lackluster start, following a disruption to the wider market's recent uptrend. Minor decreases are evident across the S&P futures, Dow futures, and Nasdaq 100 futures, each showing a 0.2% dip. Reflecting a cautious sentiment, investors have pivoted towards more defensive stocks, with Utilities standing out as the premarket's best-performing sector, alongside a rise in bond prices.

Simultaneously, the 10-year Treasury yield #US10Y has decreased by 5 basis points to 3.69%, and the 2-year yield #US2Y has fallen 4 basis points to 4.71%. These movements come in the wake of escalating concerns over the political situation in Russia. Over the weekend, a rapid sequence of rebellion and truce hinted at potential long-term political instability. The actions of Prigozhin's Wagner group, marching towards Moscow, further amplified the potential for global market disruptions. While this immediate threat seems to have receded, the events might have widened both positive and negative tail risks. It's unclear whether this could provoke an escalation by Mr. Putin to reassert his authority, or leave him vulnerable - both scenarios hold implications for Europe, Ukraine, and global markets. At this stage, predicting the outcome is inherently uncertain. #SPX #NDX #DJI #MarketUpdate #News