FX.co ★ Ukrainian-Russian conflict, day 48. Sweden and Finland are ready to join NATO.

The key indices of the US stock market - Dow Jones, NASDAQ, and S&P 500 - ended Monday with a strong fall. In principle, the market is returning to the most logical state in the current circumstances. We have repeatedly said that the heavy fundamental and geopolitical backgrounds will exert powerful pressure on the stock market. However, two weeks ago, US stock indices showed impressive growth, which immediately gave rise to a huge amount of talk that in fact, the fall would not be so strong. However, the fall of the market based on such serious factors that will affect the whole world is not a fall within a week or two. Many experts agree that the decline in stocks and indices will be observed throughout the Fed's rate hike cycle. And this is at least a year and a half. Thus, we have a situation in which stock indices can grow from time to time, but in general, a downward trend has already begun, which can last for a very long time.

Meanwhile, the topic of the Fed is slowly fading into the background. The fact is that all participants in all markets are already fully aware that an increase in the key rate to at least 2.5% in the near future is almost inevitable. They also understand that the Fed will reduce its balance sheet, which has ballooned in recent years to an unimaginable $ 9 trillion. But with geopolitics, everything is much more complicated, and it is extremely difficult to predict the future. Last night, information was received that chemical weapons, presumably sarin gas, were used in Mariupol, which continues to hold the defense. This is still unverified information, however, as it turned out a little later, during the day there were repeated reports that Russian troops were preparing to use this type of weapon prohibited by the Geneva Convention. If the fears are confirmed, it could change a lot of the opinion of the EU, the US, and NATO about this military conflict. Earlier, NATO Secretary-General Jens Stoltenberg stated that the use of chemical weapons by Russia "may affect neighboring NATO member countries." It is unclear exactly what Stoltenberg meant, but there is no doubt that in this case new packages of sanctions may be introduced against the Russian Federation. And since there are fewer and fewer instruments of influence on the Kremlin, oil and gas sanctions loom more and more on the horizon. In any case, de-escalation of the conflict, as we see, is out of the question. It should also be noted that according to unofficial information at the last NATO summit, Sweden and Finland announced their readiness to join the Alliance this summer. Finland has a very long border with Russia, and the Kremlin has repeatedly warned Finns that such a move would force Moscow to "react." Thus, in the summer, we may witness one or two more "special operations".