Stocks opened slightly lower today following a lackluster session on Monday and last week's 0.7% decline in the S&P 500 (^GSPC) -- the biggest weekly drop in two months.

Turmoil is growing in Iraq, which is unnerving traders and investors and boosting oil prices; but a two-day Fed meeting also starts today and is expected to end like all other recent Fed meetings, with short-term interest rates remaining near zero and the Fed continuing to trim its quantitative easing bond purchases.

The IMF Monday gave the Fed even more reason to maintain extremely low rates. It cut its outlook for U.S. growth this year to just 2%, down from 2.8%. That's not surprising given that first quarter GDP fell at an annual 1% rate -- the first contraction in three years.

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"The Fed is probably the number one" factor for the markets this week, says Jack Ablin, the chief investment officer at BMO Private Bank in Chicago. "Just like the IMF I do think the Fed will lower its forecast for growth this year," Ablin tells The Daily Ticker. (The Fed will be updating its economic forecast as well as issuing its latest policy statement at the conclusion of this week's two-day Fed meeting).

"Iraq is still that powder keg," says Ablin. "Who knows what happens there?" But he sees a silver lining. If the U.S. negotiates with Iran to help reduce the violence in Iraq -- a meeting between an American diplomat and his Iranian counterpart has been reported -- there could be further progress on talks to limit Iran's nuclear aspirations, and Iran itself could bring some of its oil back online, says Ablin.

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Despite these developments, Ablin recommends that investors stay in the stock market because there are "enormous amounts of liquidity continuing to flow" into it -- from the Fed, other central banks and other banks and lenders all over the world. "That's probably the [number one factor] why the stock market was up 30% last year and not 10%," says Ablin, adding "it could help pull markets a little bit higher this year."

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