Equity markets have been very sensitive to headlines on the war in Ukraine.
U.S. stocks climbed in afternoon trading in a rally underpinned by gains in megacaps and tech shares. Benchmark Treasuries reversed an earlier slide, while oil declined on China lockdown concerns.
The S&P 500 rose for a third day, closing up 0.7% after falling as much as 0.6%. The tech-heavy Nasdaq 100 jumped 1.6%. Both indexes settled just off session highs. Oil tumbled as China’s worsening virus resurgence boosted concern over demand in the world’s biggest crude importer.
Equity markets remained sensitive to headlines on the war in Ukraine, dipping earlier after a report several peace negotiators suffered symptoms of suspected poisoning after a meeting in Kyiv earlier this month.
“This is a difficult market to make sense of because it’s unusual that we have so many factors at work,” Marc LoPresti, managing director of The Strategic Funds, said by phone. “But I think at the end of the day, the American economy remains strong. American consumer demand remains strong. We’re seeing continued improvement in the job market. All of those indicators do seem to imply that there is a healthy foundation in terms of the U.S. economy.”
Tesla Inc. gained after saying it plans to seek shareholder approval for a move that would enable another stock split. Bloomberg earlier reported the electric-vehicle maker was extending the temporary shutdown of its car plant in Shanghai due to the surge in cases in the city.
Apple Inc. extended its rally to a 10th day, the longest run since 2010, clawing back losses earlier in the day sparked by a report that it is cutting production of its iPhone SE line. Crypto stocks gained as Bitcoin erased it 2022 losses.
The 10-year Treasury yield traded near 2.45%, from a session high of 2.55%. Earlier yields on five-year Treasuries rose above those on 30-year bonds, suggesting some investors expect an economic downturn. The dollar gained versus most of its major peers.
A growing number of money managers are betting equity indexes have already largely priced in bearish bond moves, as equity strategists from Goldman Sachs Group Inc. to JPMorgan Chase & Co. reassure stock investors that there’s no need to fret about U.S. Treasury yield curve just yet.
Still, the war in Ukraine continues to disrupt supplies of key commodities, stoking inflation risks and expectations of more aggressive Federal Reserve tightening. Meanwhile, global shares have recovered from the lows sparked by Russia’s invasion.
In the latest geopolitical developments, Turkish President Recep Tayyip Erdogan said he will meet Russia and Ukraine delegations in Istanbul on Tuesday. President Joe Biden tried to temper comments calling for the removal of Vladimir Putin by saying the U.S. isn’t seeking regime change in Moscow.
On Monday, Biden unveiled a $5.8 trillion budget, with a proposal that emphasized deficit reduction, additional funding for police and veterans, and flexibility to negotiate new social spending programs.
Some key events to watch this week:
- Australia’s annual budget, Tuesday
- Philadelphia Fed President Patrick Harker to speak, Tuesday
- U.S. GDP, Wednesday
- Richmond Fed President Thomas Barkin to speak, Wednesday
- China manufacturing, non-manufacturing PMIs, Thursday
- OPEC and non-OPEC ministerial meeting to discuss production targets, Thursday
- New York Fed President John Williams to speak, Thursday
- U.S. jobs report, Friday
Some of the main moves in markets:
- The S&P 500 rose 0.7% as of 4 p.m. New York time
- The Nasdaq 100 rose 1.6%
- The Dow Jones Industrial Average rose 0.3%
- The MSCI World index rose 0.4%
- The Bloomberg Dollar Spot Index rose 0.4%
- The euro was little changed at $1.0987
- The British pound fell 0.7% to $1.3093
- The Japanese yen fell 1.5% to 123.84 per dollar
- The yield on 10-year Treasuries declined two basis points to 2.45%
- Germany’s 10-year yield was little changed at 0.58%
- Britain’s 10-year yield declined eight basis points to 1.62%
- West Texas Intermediate crude fell 9.4% to $103.15 a barrel
- Gold futures fell 1.9% to $1,923.30 an ounce
–With assistance from Andreea Papuc, Emily Barrett, Abigail Moses, Emily Graffeo and Isabelle Lee.