Stocks Falter Amid Persistent Russia/Ukraine Fallout…..

U.S. equities lost ground in today’s session, surrendering some of yesterday’s decisive rebound that came amid the sharp pullbacks in oil and commodity prices that have surged amid the intensifying war in eastern Europe. The decline in stocks came as another round of talks between Russia and Ukraine ended with no positive developments after increased optimism yesterday of a potential diplomatic breakthrough. The European Central Bank’s monetary policy decision was also in focus, as the central bank left its benchmark interest rate unchanged but announced an acceleration in winding down its asset purchases in the wake of the Russian/Ukraine war and the exacerbated inflation backdrop. The equity front continued to take a back seat, but Amazon announced a 20-for-1 stock split and a new $10 billion share repurchase plan, while CrowdStrike topped earnings expectations and issued upbeat guidance. Economic data offered little help, as the first look at the February inflation picture saw already scorching hot consumer prices continue to ramp up, but in line with forecasts, and jobless claims accelerated somewhat. Treasuries fell for a fourth-straight session to continue the rebound in yields, the U.S. dollar was higher after yesterday’s pullback, while gold resumed a strong run after yesterday’s drop, and crude oil prices fell to add to yesterday’s plunge. European stocks were lower, giving back some of yesterday’s strong advance, while markets in Asia jumped, following the rally in the U.S. and Europe yesterday.

The Dow Jones Industrial Average declined 112 points (0.3%) to 33,174, the S&P 500 Index decreased 18 points (0.4%) to 4,260, and the Nasdaq Composite fell 126 points (1.0%) to 13,130. In heavy volume, 4.9 billion shares of NYSE-listed stocks were traded, and 4.9 billion shares changed hands on the Nasdaq. WTI crude oil lost $2.68 to $106.02 per barrel. Elsewhere, the gold spot price advanced $14.70 to $2,002.90 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.6% at 98.54.

The Consumer Price Index (CPI) rose 0.8% month-over-month (m/m) in February, in line with the Bloomberg consensus estimate, and up from January’s unrevised 0.6% gain. The core rate, which strips out food and energy, increased 0.5% m/m, matching forecasts, and slightly below January’s unadjusted 0.6% rise. Compared to last year, prices were 7.9% higher for the headline rate—again the fastest pace since 1982—in line with estimates and an acceleration from the prior month’s unrevised 7.5% rise. The core rate was up 6.4% y/y, matching projections, and rising from January’s unrevised 6.0% rise.

Initial jobless claims came in at a level of 227,000 for the week ended March 5, versus estimates calling for 217,000, and above the prior week’s upwardly-revised 216,000 level. The four-week moving average rose by 500 to 231,250, and continuing claims for the week ended February 26 increased by 25,000 to 1,494,000, versus estimates of 1,450,000. The four-week moving average of continuing claims fell by 31,250 to 1,506,500.

Treasuries were lower, extending a streak to four days of losses that has fostered a rebound in yields from last week’s drop. The yield on the 2-year note gained 2 basis points (bps) to 1.70%, the yield on the 10-year note increased 4 bps to 1.99%, and the 30-year bond rate was 7 bps higher at 2.37%.

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