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  • S&P 500 Futures fails to extend previous day’s recovery moves, part ways from Wall Street gains.
  • Cautious sentiment ahead of the key testimony, West versus China tussle heavy the mood amid a light calendar.
  • Early signals suggest no challenges to further stimulus.

S&P 500 Futures print mild losses of 0.15% while stepping back to 3,925 during early Tuesday. The risk barometer flips in favor of the bears while ignoring losses of the US Treasury yields ahead of Congressional testimony by Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen.

Read:  Wall Street Close: Tech outperforms amid strong start to the week

Other than the pre-event cautious sentiment, geopolitical fears from the Western tussle with China, over Xinjiang human rights violation, also weigh on the sentiment. The alliance includes American, Europe, Canada and the UK to battle Beijing with sanctions over key diplomats.

During this prepared remarks for the testimony, Fed’s Powell signaled that the US economic recovery is far from complete and needs a stimulus boost, which the Fed is ready to provide “as long as required”. On the other hand, Treasury Secretary Yellen sounds optimistic over the employment scenario while eyeing full employment in 2022 but also campaigns for easy money.

Coronavirus (COVID-19) updates and vaccine jitters, coupled with the Chinese claim of a stronger economy, also try to offer an active session in Asia but all fail as traders await the US event, scheduled for late Tuesday.

Although the easy money is almost ready to be backed, market players are more interested in hearing about the reflation fears and odds of tapering to recall the bond bears. In absence of which, sentiment can turn positive.