Coming into the cash session, there was a significant looming catalyst before the opening bell.

Caution into the U.S. Producer Price Index (PPI) data release set the tone for the day with the possibility of a knee-jerk reaction in the market. Expectations for the release were for month-over-month data to come in at 0.4%, and year-over-year was forecast at 8.3%.

The market exploded higher when the data was released because both numbers came in better than anticipated. Data showed October numbers at 0.2% and  8.0% for the year.

Market stalls after opening bell, despite strong data

Once the opening bell sounded, there was a lack of direction despite the bullish PPI report. Indexes can take some time during the opening drive to digest the information before making the next leg of the move, but today that continuation move never happened. The market spent all morning generally trading sideways.

Two notable events in  the market were the trend slightly lower and hold in the psychological level of 4,000 on the S&P 500 futures. This pattern remained accurate until more news hit the market.

Poland news shakes the market

A news report shocked the market during midday that a Russian missile hit Poland. This was not a confirmed attack, but the market quickly reacted negatively to two Polish casualties along the Poland and Ukraine border.

Some of the main reasons for the adverse reaction came from a lack of information. It was unclear if this was a targeted attack or if the North Atlantic Treaty Organization (NATO) would respond. If NATO were to respond, the markets would undoubtedly be affected moving forward. At this point, there is still uncertainty around the situation and something to monitor moving forward. 

This news brought the market plummeting lower until reports stated there would not be a reaction from NATO at this time. The market treaded the rest of the day lightly and traded on edge. This type of price action may hold until the situation gains more clarity. 

Market signals to watch moving forward

Pivotal levels on the chart moving forward are going to be the psychological level of 4,000 still. This level has been the line in the sand and accelerated selling when news broke about Poland. If the market is trading below 4,000, the market will likely side with caution.

All eyes should be on the Volatility Index (VIX) as this story unfolds. 

It is also imperative to keep this Poland story from overshadowing upcoming economic events. Retail sales numbers will be released at 8:30 a.m. Eastern on Wednesday and can also impact the market. 

Stock market closes green despite uncertainty

The Nasdaq and the S&P 500 were positive to close the session. The S&P 500 closed up 0.85%, adding 34 points, while the Nasdaq closed up 1.36%, gaining 151 points. The Dow Jones followed, closing up 0.13%, adding 43 points.