Stocks and oil prices fell Monday as increased fears over global growth, the Ukraine war and impending rate hikes by the Fed negatively impacted investor sentiment.
The tech-heavy Nasdaq dropped 262 points Monday, as China battled Covid outbreaks in Shenzhen and Changchun, key regions for tech manufacturing. Also, the S&P 500 shed 31 points, the Dow was flat, and the TSX tumbled 281 points, weighed down by steep declines in the energy and materials sectors. Meanwhile, 10-year U.S. Treasurys climbed to 2.139% Monday, a sign that rising interest rates may not be deterred by Russia’s invasion of Ukraine.
In Tuesday trading, U.S. indexes regained significant ground after oil prices retreated below $100 per barrel, easing some investors’ concerns about U.S. inflation and the need for the Fed to act aggressively to battle rising prices. By Tuesday’s close, the Dow was up nearly 600 points, while the Nasdaq and S&P 500 added 367 and 89, respectively. The TSX ended flat as energy names weighed on gains in other sectors.
As expected, the Fed on Wednesday raised interest rates by 25 basis points, its first rate increase since 2018. While Fed officials predicted six more quarter-point increases for the year, these increases will depend on future inflation readings and the trajectory of the Ukraine conflict. While North American indexes pared earlier gains after the Fed statement, the indexes steadied as Fed Chair Powell spoke at a press conference later. By Wednesday’s close, the Dow rose 519 points, the S&P 500 gained 95, and the Nasdaq added 488. In Canada, the TSX jumped 281, its biggest gain since late February. Meanwhile, the yield on 10-year U.S. Treasurys also rose after Powell’s announcement, hitting 2.185%. In inflation news, Statistics Canada reported that the annual inflation rate in February climbed to 5.7%.
U.S. stock indexes registered solid gains Thursday, all climbing a bit more than 1%, while the TSX gained 1.4%. Oil prices were volatile again Thursday, with Brent crude settling at $106 per barrel. Finally, the average rate for a 30-year fixed mortgage in the U.S. topped 4% for the first time since May 2019, Freddie Mac reported Thursday.
Markets Gain Ground, Despite Ukraine Conflict
For the four trading days covered in this report, the Dow surged 1,537 points to close at 34,481, the S&P 500 rose 239 points to settle at 4,411, while the tech-heavy Nasdaq added 1,034 points to close at 13,615. In Canada, the TSX climbed 590 points to end at 21,771.
source https://richarddri.ca/ukraine-war-rages-on-fed-raises-interest-rates/
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