Geoffrey Smith 

Investing.com — U.S. stock market opened lower Monday after fresh Federal Reserve warnings about the pace of monetary tightening drained the momentum of relief rallies that had followed comments that suggested that war between Russia, Ukraine was not imminent.

After Russian Foreign Minister Sergey Lavrov informed President Vladimir Putin of the possibility for diplomacy, futures have recouped their overnight losses. Following a harsh warning by G7 Finance ministers that Russia would face “massive, immediate consequences” if it sent its troops across the border, this was followed by a sharply worded statement from Lavrov. Russian warships have been closing off large swathes of Ukraine’s coastline using what they call naval drills.

However, St. Louis Fed President James Bullard’s comments ensured the market’s attention was on inflation and the outlook for interest rates in the coming year. Bullard, who last week said he wanted official rates to rise by a full 100 basis points by the start of July, told CNBC that: “I do think we need to front-load more of our planned removal of accommodation than we would have previously. We’ve been surprised to the upside on inflation.”

At 34,618 point, the index was at a loss of 120 points or 0.4% by 9:40 ET (1440 GMT). However, the was still flat while the was 0.3% higher than the after Friday’s downturn.

Under the shadow of Friday’s University of Michigan Consumer Sentiment survey which had shaken U.S. confidence, the market appeared ready to open. High inflation combined with the faded effects of Pandemic-era stimuli had caused the survey to drop to its lowest level in 2012, making it one of its most recent lows.

“Spending and sentiment are not the same, especially when households are sitting on trillions of dollars of pandemic savings, but it’s hard to be very positive about the near-term outlook for retail sales when sentiment has fallen so far, so quickly,” said Pantheon Macroeconomics chief economist Ian Shepherdson in a note to clients.