Shares fell on Thursday as peace talks between Ukraine and Russia showed little progress on key issues and oil prices rose again.
The Dow Jones Industrial Average fell about 400 points, or 1.25%. The S&P 500 lost 1.5%. The technology-focused Nasdaq Composite fell 2.1%, dragged down by losses in Apple and Meta Platforms.
Negotiations between the Russian and Ukrainian foreign ministers ended with little progress on issues such as a ceasefire or safe passage for civilians trying to flee the besieged city of Mariupol.
Markets have been closely linked to the conflict and have been inversely correlated to energy prices, which soared during the Russian-Ukrainian war. A day after West Texas Intermediate crude fell more than 12%, the US benchmark climbed about 4% to around $112. Brent crude, which fell 13% on Wednesday, rose nearly 5% on Thursday to near $116.
“The violent market swings seem completely tied to the Ukraine-Russia peace talks and subsequent volatility in energy costs,” said Timothy Lesko, senior wealth advisor at Mariner Wealth Advisors. “The fall in commodity prices[Wednesday}seemedtotriggerarallyofreliefwhichunfoldedalittlewhilethepeacetalksseemedfruitless”[Wednesday}seemedtotriggerareliefrallythatisunwindingabitaspeacetalksseemedfruitless”[mercredi}asemblédéclencherunrallyedesecoursquisedérouleunpeualorsquelespourparlersdepaixsemblaientinfructueux”[Wednesday}seemedtotriggerareliefrallythatisunwindingabitaspeacetalksseemedfruitless”
Energy stocks Chevron and Exxon Mobil rose 2.3% and 1.2% respectively.
Other commodities that have seen significant rallies since the war in Ukraine, which fell on Wednesday, rose again on Thursday. Silver and pink palladium. Investors worry about the impact of high prices on economic growth.
Amazon shares jumped 4% after the company announced a 20-for-1 stock split and $10 billion buyout. CrowdStrike rebounded 9% after beating earnings and raising its outlook.
Elsewhere in tech, there was a sea of red. Zoom Video fell more than 7% and Microsoft 2%. Apple and Meta Platforms fell 3% each. Tesla ticked 4% less.
Goldman Sachs fell 2% after announcing it would close its operations in Russia, becoming one of the first major global investment banks to do so after the country invaded neighboring Ukraine last month.
The consumer price index, a key gauge of inflation, showed a broad basket of goods and services rose 7.9% in February, a new 40-year high. That was slightly higher than the 7.8% estimate for the year, according to economists polled by Dow Jones.
On a month-to-month basis, the CPI gained 0.8%, compared to the 0.7% estimate for the month.
“The inflation situation is getting worse, not better. Household basics are becoming increasingly expensive, crowding out spending in discretionary categories and delaying the reallocation of spending to services. gasoline prices explain much of the story, food and housing prices were also key drivers in February,” said John Leer, chief economist at Morning Consult.
“Unfortunately, the war in Ukraine will make it harder to control inflation. Gas and energy prices continue to rise, wheat prices are soaring and supply chains remain in chaos,” added Leer.
The 10-year US Treasury yield crossed the 2% mark for the first time since Feb. 25.
Traders also weighed the European Central Bank’s decision to roll back stimulus ahead of schedule. The bank announced on Thursday that it would end its bond-buying program in the third quarter of this year, economic data permitting.
The ECB’s decision comes ahead of next week’s Federal Reserve meeting where the central bank is expected to raise rates.
Wall Street was coming off a strong session, which saw the S&P 500 post its biggest one-day jump since June 2020. The Nasdaq Composite had its best day since November 2020.
“It’s somewhat typical of a high volatility environment where you can get just nasty swings back and forth,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “A relief rally is probably the best way to describe what happened in the markets. … It doesn’t surprise me to see a very marked counter-trend movement.”
Dow drops 400 points with oil up again, Russia-Ukraine talks falter
Source link Dow drops 400 points with oil up again, Russia-Ukraine talks falter