Wall Street rises as geopolitical fears that are fueling a broad rally subside

  • Energy stocks fell as crude oil prices fell
  • US producer prices gained strength in January
  • Biggest one-day gain since March 2021
  • Indexes rise: Dow 1.22%, Standard & Poor’s 1.58%, Nasdaq 2.53%

NEW YORK (Reuters) – Wall Street closed sharply higher on Tuesday as signs of easing tensions along the Russia-Ukraine border sparked a risk-filled trading session.

All three major indices made solid gains on the day, with technology stocks and market-leading technology-related stocks providing the biggest boost and putting the Nasdaq, up 2.5%, ahead.

Philadelphia Semiconductor Index (.sox) It jumped 5.5 percent, its biggest one-day percentage gain since March 2021.

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The geopolitical heat eased somewhat after Russia said it had withdrawn some of its forces near the Ukrainian border, sparking bullish sentiment in stocks and causing crude oil prices to slide while allaying supply concerns.

The announcement received cautious responses, and the United States and NATO said they had not yet seen evidence of a withdrawal. Read more

Stocks pared gains briefly late in the session, when US President Joe Biden said that while diplomatic efforts were underway. Read more

“Nice walk today thanks to (Russian President Vladimir) Putin,” said David Carter, managing director of Wealthspur Advisors in New York.

“Markets are moving based on Putin or (Federal Reserve Chairman Jerome) Powell,” Carter added. “Putin and his intentions with Ukraine and Powell and his intentions regarding interest rates”.

CBOE Market Volatility Index (.VIX) It fell from its highest level in three weeks.

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On the economic front, a report from the Labor Department showed producer prices rose in January at twice the expected rate, reinforcing economists’ expectations that the Federal Reserve will deal with persistent inflation by aggressively raising key interest rates. Read more

“Inflation data suggests that prices are going up, but the markets already know that,” Carter said.

The chart below shows the Producer Price Index (PPI) data, along with other leading indicators, and how far above the Fed’s average annual 2% inflation target is:

inflation

The market has now priced better than expectations that the central bank will raise the target rate for the federal funds by 50 basis points at its March monetary policy meeting.

“The market is now priced in for a bolder Fed, and outside of geopolitics there is lower uncertainty,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky. “But the market is never so uncertain, so you’re always dealing with possibilities.”

Dow Jones Industrial Average (.DJI) The Standard & Poor’s Index rose 422.67 points, or 1.22%, to 3,4988.84 points (.SPX) It rose 69.4 points, or 1.58%, to 4,471.07, and the Nasdaq Composite (nineteenth) It added 348.84 points, or 2.53%, to 14139.76 points.

Nine of the 11 major S&P 500 sectors closed in green, with technology stocks (.SPLRCT) It has the highest profit rate as it jumped by 2.7%. energy stock, (.SPNY) Affected by the slide in crude oil prices, it fell 1.4%.

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The fourth-quarter reporting season is entering its last stretch, with 370 companies in the S&P 500 reporting. Of those, 78.1% beat analyst estimates, according to preliminary Refinitiv data.

“It’s good that the strength of earnings underlies these macro issues,” Mayfield added.

The Philadelphia SE Semiconductor’s rally came on the heels of Intel Corp’s announcement of a $5.4 billion deal to buy Israeli chip maker Tower Semiconductor. (TSEM.TA). Read more

Restaurant Brands International rose 3.6% after the fast food company beat earnings and revenue estimates for the quarter. Read more

Marriott International Hotel (March) It also beat Wall Street expectations due to higher occupancy rates, sending its shares up 5.8%. Read more

Other travel-related companies jumped, with the S&P 1500 . airline index (.SPCOMAIR) The hotels/restaurants/entertainment index (.SPCOMHRL) It rose 5.9% and 2.4%, respectively.

Shares of cloud infrastructure company Arista Networks jumped 5.8% after forecasting better-than-expected revenue for the current quarter.

Advance issues outnumbered declining issues on the New York Stock Exchange by 3.03 to 1; On Nasdaq, the ratio was 3.87 to 1 in favor of advanced traders.

S&P 500 Index posted 6 new highs in 52 weeks and 3 new lows; The Nasdaq recorded 39 new highs and 70 new lows.

Volume on US stock exchanges reached 10.63 billion shares, compared to an average of 12.60 billion over the last 20 trading days.

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Stephen Kolb reports. Additional reporting by Devik Jain, Susan Mathew and Shreyachi Sanyal in Bengaluru; Edited by Aurora Ellis

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Our criteria: Thomson Reuters Trust Principles.

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