US stocks tumbled and oil prices jumped, as concerns about high energy prices, supply shortages and inflation once again rattled investors.
The S&P 500 fell 0.6% on Wednesday, while the Dow Jones Industrial Average was down 0.9%. The technology-focused Nasdaq Composite moved between small gains and losses and recently fell 0.2%. Major US stock indexes jumped on Tuesday, as investors ignoring fears Inflation will push the nation’s economy into recession.
However, some of that confidence faded on Wednesday after Brent crude, the international benchmark, rose again. Brent crude futures were recently traded at $120.85 a barrel, up 4.7%. In trading before the opening bell, US stock index futures fluctuated and then fell, with losses deepening as oil prices rose.
Oil prices rose after Russia said on Tuesday that oil exports via a pipeline extending from Kazakhstan to the Black Sea may fall temporarily At about 1 million barrels per day – representing about 1% of global oil demand – indicating storm damage. Russian officials have said the repairs could take up to two months.
“Things will remain highly sensitive to current events in Ukraine,” said Susanna Streeter, senior investment and markets analyst at Hargreaves Lansdown, noting that sharp moves in energy prices will continue to weigh heavily on indices. “There is still real pressure on oil prices, adding to inflationary concerns.”
Commodities have been rising across the board on a range of issues that threaten supply chains with tightness. Prices of aluminum, nickel and steel soared on concerns ranging from the war in Ukraine to the Covid-19 lockdowns in China. Tangshan, the largest steelmaking city in China, Tell residents to stay home According to Reuters. London commodities broker SP Angel said in a note on Wednesday that the city accounts for 58% of China’s steel sector production.
“Inflation continues to be an 800-pound gorilla,” said Doug Sandler, global head of strategy at Riverfront Investment Group. The concern, he said, is that higher prices will force the Federal Reserve to raise interest rates faster than investors previously expected.
Mr. Sandler said his company began pairing its shares earlier this year amid concerns about a riskier and more uncertain environment in the United States and the global economy. The hope, he said, is that the supply chain issues that have raised prices for everything from corn to copper will work themselves out in the coming months, reducing the need for sharply higher rates on federal funds.
The sharp rise in US government bond yields has slowed. The yield on the 10-year US Treasury fell to 2.357% in recent trading, from 2.375% the day before. US government bond yields rose this week after Federal Reserve Chairman Jerome Powell said the central bank is ready Raise interest rates in steps of half a percentage point If necessary to tame inflation. Yields rise when bond prices fall.
Stock market in Russia Set to partially reopen on Thursday, nearly a month after trading closed after the country’s invasion of Ukraine. Investors and analysts predict that the reopening could push Russian stocks into freefall.
In recent days, global markets appeared to have crossed the curve, despite concerns about it soaring inflation The war in Ukraine. The S&P 500 rose above its 200-day moving average on Tuesday after falling below it on February 17. The benchmark has advanced 1% or more in five of the past six sessions, lifting it 8.1% over that period and erasing everything. Of the losses that have occurred since Russia invaded Ukraine.
Major indices in Europe and Asia saw similar moves.
The latest march came even as Russia launched attacks on Ukraine IntensificationWestern countries Penalties continue to pile up Pricing pressures are showing no signs of abating. On Wednesday, new data on inflation showed that UK consumer prices It rose 6.2% in February from a year earlier, up from 5.5% in January, marking the highest rate since March 1992.
Fari Hamzei, of Hamzei Analytics, said the recent bounce in stocks came in lower volumes, suggesting it could be a so-called bear market rally. He’s looking for a few days of big dips in which 90% of NYSE stocks are down, indicating a buying opportunity.
He said, “We have not seen a surrender.” “You need volume to confirm price action.”
A sharp rise in oil prices could lead to such a drop. Mr. Hamza expects the price of West Texas Intermediate crude, which traded at around $114 a barrel on Wednesday, to rise to between $135 or $145 a barrel. He said a significant escalation of the conflict in Ukraine could push investors out of stocks.
In European markets, the Stoxx Europe 600 lost 1.1%, reversing earlier gains once oil prices rose strongly. The FTSE 100 in London was down 0.1%. European oil giants
All of them rose 3.3% or more.
In the middle of the New York trading day, energy stocks were also higher.
Occidental PetroleumAnd the
All of them earn about 1% to 2%.
Rising oil prices could spark more Consumer interest in electric carsAnalysts said. shares
It rose about 3% in early afternoon trade. The stock has risen on each of the past seven trading days, its longest winning streak since August 2021, lifting the electric car maker more than 30% in that time period.
Meanwhile, he shares Mimi stock –Which has greatly decreased this year– I enjoyed life back. shares
Jumped 11% after the company’s president, Ryan Cohen, revealed it His company bought 100,000 shares of the company’s stock on Tuesday. shares
AMC Entertainment HoldingsAnd the
Which tends to move in relation to GameStop, jumped 4.9%.
It declined by 8.1%. The software company on Tuesday reported higher earnings and better-than-expected revenue growth, but said it expected a hit in annual revenue from the war in Ukraine.
In the European bond markets, the yield on the benchmark German 10-year bond was trading around 0.497% after exceeding 0.5% this week. The last time he traded around that level was in the fall of 2018.
There were other signs on Wednesday that investors were eyeing the assets they saw as safer. The ICE US dollar index, which measures the currency against another basket, rose 0.2% in recent trading. Gold prices rose 0.4%.
In Asia, the major indices closed higher. Hong Kong’s Hang Seng rose 1.2%, while Japan’s Nikkei 225 climbed 3%. China Shanghai Composite advanced 0.3%.
—Georgi Kanchev contributed to this article.
Write to Caitlin McCabe at caitl[email protected] and Scott Patterson at [email protected]
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