Wall Street closes lower after another session of wild swings | Financial market news
Traders are pricing in simmering geopolitical tensions over Ukraine and the US Federal Reserve’s policy decision.
Stocks faced another session of wild swings as traders assessed the latest geopolitical developments amid concerns over a Federal Reserve policy error.
After a few attempts to rebound, the S&P 500 recorded its third consecutive decline. The gauge still closed its session lows, while the tech-heavy Nasdaq 100 finished higher. Treasury yields climbed – with shorter maturities leading the rise. The move led to a resumption of curve flattening, with the spread between two- and 10-year rates narrowing. West Texas Intermediate crude topped $95 a barrel for the first time since 2014.
Ukrainian President Volodymyr Zelenskiy briefly spooked markets with what his office later said was a sarcastic comment about the rest of the world predicting a date for an attack by Russia. Zelenskiy said it should be a day of unity instead. Vladimir Putin’s top diplomat, meanwhile, urged the Russian president to continue talks with the West, with negotiating options “far from exhausted”.
“If an armed conflict between Russia and Ukraine is somehow averted, a short-lived recovery is likely, but there are still too many worries on the horizon for any kind of movement. more sustainable upside in equities,” said George Ball, chairman. of Sanders Morris Harris in Houston. “It is time for investors to raise funds. Cash is the ultimate king when markets are volatile.
Investors have been jittery, with bets on the pace of rate hikes since the Fed’s January meeting rising to six or seven this year — down from the three forecast by officials in December. Strategists at JPMorgan Chase & Co., led by Marko Kolanovic, said global markets are pricing in an aggressive wave of monetary tightening this year that is unlikely to fully materialize, boosting the appeal of stocks linked to the economic cycle.
Meanwhile, Fed Bank of St. Louis President James Bullard said on Monday that the central bank needed to move forward with rate hike plans to underscore its inflation-fighting credibility. “I think we need to anticipate our planned housing removal more than we would have before,” he told CNBC.
It’s “hard to see a happy ending” for bonds in a rising interest rate scenario, Oksana Aronov, strategist at JPMorgan Asset Management, told Bloomberg Television. “We are in a bit of a pickle. We are in the middle of the Fed’s latest policy mistake and concerned about their next policy mistake. Right now, caution is the name of the game.”
Here are some key events this week:
- US IPP, Tuesday
- EIA Crude Oil Inventory Report, Wednesday
- FOMC Minutes, Wednesday
- CPI China, PPI, Wednesday
- G-20 finance ministers and central bank governors meet from Thursday to February 18
- Cleveland Fed President Loretta Mester and St. Louis Fed President James Bullard speak Thursday
- US Monetary Policy Forum: Speakers including Fed officials Charles Evans, Christopher Waller and Lael Brainard, Friday
For more market analysis, read our MLIV blog.
Some of the major movements in the markets:
- The S&P 500 fell 0.4% at 4 p.m. PT
- The Nasdaq 100 rose 0.1%
- The Dow Jones Industrial Average fell 0.5%
- The MSCI World index fell 1%
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.5% to $1.1296
- The British pound fell 0.3% to $1.3525
- The Japanese yen fell 0.1% to 115.58 per dollar
- The yield on 10-year Treasury bills rose six basis points to 2.00%
- Germany’s 10-year yield fell one basis point to 0.28%
- The UK 10-year yield rose four basis points to 1.59%
- West Texas Intermediate crude rose 2% to $95 a barrel
- Gold futures rose 1.7% to $1,873.80 an ounce, helped by Andreea Papuc, Abigail Moses, Emily Graffeo, Peyton Forte and Sophie Caronello.