US stocks fell and oil prices rose, amid concerns about commodity prices and the uncertainty of progress ceasefire talks Between Russia and Ukraine heavier investors.
The S&P 500 fell 0.2% in early trading Wednesday, while the technology-focused Nasdaq Composite lost 0.2%. The Dow Jones Industrial Average recently fell less than 0.1%. Tuesday, Major US stock indexes jumpedto extend the S&P 500 winning streak to four sessions.
Major US stock indexes are on track to end March with solid gains after a mid-month turnaround that sent stocks higher. This month, investors had to face the war in Ukraine, High rates of inflation And the Federal Reserve that started raising interest rates for the first time since 2018. However, traders continued to invest in US stocks. As of Tuesday’s close, the S&P 500 had a 5.9% gain for the month.
However, strategists and investors say the recovery is fragile. Kremlin spokesman Dmitry Peskov said on Wednesday that talks with Ukrainian negotiators in Istanbul had not brought the two countries closer to an agreement ending the Russian invasion.
Big swings in everything from oil prices to Treasuries in recent weeks periodically weighed on sentiment. On Wednesday, for example, higher oil prices sent stocks lower. Brent crude, the international benchmark for oil prices, rose about 4% to $111.98 a barrel.
In Europe, natural gas prices, which are often volatile, jumped more than 10% after Germany indicated that Preparing for a possible cut in Russian gas supplies. German officials said the country’s gas supplies from Russia were continuing uninterrupted, but they launched the early warning phase of an emergency plan drawn up for a possible power shortage. German Economy Minister Robert Habeck said the warning was a precautionary measure.
“This raises concern … that gas prices could rise further and add to inflationary pressure,” said Susanna Streeter, senior investment and markets analyst at Hargreaves Lansdowne.
On Wednesday, she said, investors were dealing with growing skepticism about peace talks between Russia and Ukraine. On Wednesday, Russia quelled hope for significant progress, with Kremlin spokesman Dmitry Peskov saying the country It couldn’t refer to anything particularly promising.
“Hopes were much higher yesterday that there could be a breakthrough in the talks, but I think those hopes have been dashed,” Ms Streeter said. “I suspect [markets] It will still be very volatile.”
In the bond market, traders say they are keeping a close eye on the so-called yield curve, which measures the difference between short- and long-term interest rates, and is often seen as an indicator of sentiment about economic growth prospects. On Tuesday, the yield curve briefly inverted, as US 2-year Treasury yields exceeded those of the benchmark 10-year bond for the first time since 2019.
The inversion of the US Treasury yield curve has been seen as a warning sign of a recession for decades, and it looks like it is about to light up again. WSJ’s Dion Rabouin explains why an inverted yield curve can be so reliable in predicting a recession and why market watchers are talking about it now. Illustration: Ryan Trevis
On Wednesday, the yield on the 10-year Treasury bond was trading higher than the yield on the two-year bond. The 10-year traded recently around 2.378%, down from 2.399% on Tuesday, according to Tradeweb. The two-year yield was trading around 2.334%, down from 2.349% on Tuesday. The inverted yield curve is It is sometimes seen as a stagnation signal. Yields decrease when prices rise.
Money managers say the risk of a recession is currently greater in Europe than in the United States, in part due to the continent’s relative dependence on Russian exports. Russia supplies about 40% of natural gas to the European Union.
Seema Shah, chief strategist at Principal Global Investors, said a European recession “falls within our baseline scenario”. She added that in addition to the continent’s dependence on Russia for gas and other goods, Europe is also facing hyperinflation. On Wednesday, new data showed that consumer prices in Germany for the month of March rose 7.3% year-on-year.
In the German bond market, yields are up, with the benchmark 10-year German bond market trading around 0.692%. The two-year bond yield is trading around 0.027%. The last time the yield on a two-year bond that had consistently traded above zero was in 2014.
Traders worked on the floor of the New York Stock Exchange on Tuesday.
Photo:
Courtney Crowe/The Associated Press
In Europe, the Stoxx Europe 600 continental index is down 0.6%, on track for a three-session winning streak. Germany’s DAX fell 1.6 percent. Banking and transportation shares were among those that fell in the region. French car maker
Slither 3%.
It lost 2.2%.
It fell 1.7%.
Shares of European oil giants rose as energy prices rose.
It rose by 3.8%, while
Added 1.9%.
In the early trading in New York, energy contributed – some of the The best performer in the market So far this year – it’s also traded higher, with
And the
Each add more than 2%.
Meanwhile, shares
Up 5.8% after posting Higher returns and profits for the fourth quarter.
In the currency markets, the euro rose 0.3% to trade around $1.11. The ICE US dollar index, which measures a currency against another basket, was down 0.4%. The Japanese yen rebounded from its recent decline, up 0.8% against the dollar after
Bond purchases boosted.
In Asia, indicators are mostly up. in Hong Kong
It added 1.4%, while in mainland China, the Shanghai Composite was up 2%. In contrast, Japan’s Nikkei 225 index was down 0.8%.
Matt Grossman contributed to this article.
Write to Caitlin McCabe at caitlin.mccabe@wsj.com
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