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As stocks fall as inflation rises, the war in Ukraine continues

U.S. stocks accelerated losses and oil prices rose in afternoon trading as talks between Russia and Ukraine made little progress and inflation readings reached a 40-year high.

The Nasdaq Composite Index fell nearly 2%, and the S&P 500 fell about 1.3% on Thursday. The Dow Jones Industrial Average was about 1%, or 335 points, lower. All three indexes were ready to finish for the third time this week after breaking the four-session losing volume on Wednesday.

Investors are concerned about the global economic outlook, which has fueled the hunger for the most dangerous assets in recent days. The S&P 500 and Dow industries remain in the correction territory, while the Nasdaq is in the bear market.

“Investors are doing yo-yo between hope and fear associated with a ceasefire or a positive outcome. [in Ukraine]Mike Mussio, chairman of FBB Capital Partners, said on Thursday that a meeting between Russian and Ukrainian authorities in Turkey had not reached a ceasefire agreement, according to Ukraine’s foreign minister.

US inflation peaked in four decades in February, with the consumer price index rising 7.9% from a year earlier. Gas prices are at record highs, hurting consumers’ budgets. Analysts warn that the US and Europe could have lower inflation and lower economic growth – also known as stagflation – as high energy prices eat up spending on other household items.

Federal Reserve Chairman Jerome Powell said last week at a meeting of the central bank that he plans to raise the rate by a quarter of a percentage point next week to control inflation.

“The Fed is facing an incredibly difficult challenge and will have to walk the tight rope between inflation and pushing the recession,” said Ed Keon, chief investment strategist at PGIM Quantitative Solutions.

On Thursday, Brent crude oil futures, a global benchmark for oil, rose 0.3% to $ 111.50 a barrel. The US equivalent, West Texas Intermediate, reduced its previous earnings by 0.2% to $ 108.55. Oil prices fell from last highs on Wednesday, but remained above $ 100 a barrel.

The rise in oil prices boosted the S&P energy sector, which rose by 2.6%. Nine out of 10 other sectors, however, fell on Thursday as a result of a 2.9% drop in information technology.

In individual shares, Amazon.com’s shares rose 4.7% after the e-commerce giant’s board approved the distribution of 20 shares and authorized the repurchase of $ 10,000 billion worth of common shares. Shares of the platoon lost 5% after the company said it would renew its pricing strategy. Chinese retailer JD.com fell nearly 15% to $ 53.15, nearing a two-year low close after slowing revenue growth.

Abroad, the Stoxx Europe 600 pan-continental fell 1.7% after reaching its highest daily percentage gain since Wednesday, March 2020. The index’s banking sector fell 2.6% on Thursday as investors worried about the European economy’s exposure to Russia.

The European Central Bank maintained its main policy rate unchanged, but said it could end its asset purchase program in the third quarter earlier than expected. Investors hope that the end of this program could open the door to a rise in interest rates. The euro rose 0.2% against the dollar after the announcement.

New York Stock Exchange traders.


Photo:

Courtney Crow / Associated Press

Russia’s invasion of Ukraine has caused volatility in stocks, bonds, commodities and foreign exchange as investors try to assess the impact of sanctions and the possibility of disruption in trade and supply chains.

In the US, the benchmark 10-year Treasury yield rose to 2% from 1.946 on Wednesday.

The Russian ruble was trading at more than 133 rubles a dollar in trading on Thursday, after strengthening on Wednesday, according to FactSet..

The value of the ruble has been more difficult to assess in the last two weeks, as it has become more difficult for banks to comply with orders following Western sanctions and capital controls imposed by Russia. The Russian stock market has been closed since February 25.

President Biden’s executive cryptocurrency order may have raised more questions than answers: What is the digital currency of the central bank? How is it different from crypto? And why hasn’t the Fed introduced digital dollars? WSJ’s Dion Rabouin explains. Composite photo: David Fang

Bitcoin’s dollar value fell 6.5% on Thursday from its 5 pm ET level to $ 39,176.65. Market value was the largest cryptocurrency in the world on Wednesday, when President Biden announced an executive order to study digital currencies, the industry welcomed it and skeptics complained that it was delaying the necessary regulation. Analysts say the value of the Bitcoin dollar is tracking broader stock markets, removing specific news about the industry.

The London Metal Exchange on Tuesday suspended trading in nickel to address the crisis caused by a major loss-making trade originating in China. The London nickel market will remain closed until at least next week.

Asia’s leading stock indexes tracked earnings on Wall Street from Wednesday. China’s Shanghai Composites rose 1.2% on Thursday, South Korea’s Kospik 2.2% and Japan’s Nikkei 225 rose 3.9%.

Write to Orla McCaffrey at orla.mccaffrey@wsj.com and to Caitlin Ostroff at caitlin.ostroff@wsj.com

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As stocks fall as inflation rises, the war in Ukraine continues

Source link As stocks fall as inflation rises, the war in Ukraine continues

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