Markets End Lower Following Delayed Russia/Ukraine Talks…..
U.S. equities lost steam midday to finish mostly lower in choppy action, as the markets remained at the mercy of headlines surrounding the war in eastern Europe, while this week’s upcoming monetary policy decision from the Fed looms. Energy issues saw solid pressure amid a tumble in crude oil prices, as a fresh set of talks between Russia and Ukraine were delayed until tomorrow, with officials upbeat about the upcoming negotiations over the weekend. Meanwhile, China is seeing the largest surge in COVID cases since March 2020, triggering lockdowns in a number of cities, including Shenzhen, to exacerbate the risks to demand for oil. News on the equity front was light, but Germany is reportedly planning on purchasing 35 of Lockheed Martin’s stealth fighting jets. Treasuries were lower for a fifth-straight session to continue the rebound in yields amid an empty economic calendar, and the U.S. dollar finished to the downside, while gold prices also fell. European stocks were higher amid the renewed hopes of a diplomatic resolution to the Russia/Ukraine conflict, while markets in Asia were mixed with stocks in China and Hong Kong plunging as a result of the reinstated lockdowns in the country.
The Dow Jones Industrial Average nudged 1 point higher to 32,945, while the S&P 500 Index lost 31 points (0.7%) to 4,173, and the Nasdaq Composite decreased 263 points (2.0%) to 12,581. In heavy volume, 5.5 billion shares of NYSE-listed stocks were traded, and 5.8 billion shares changed hands on the Nasdaq. WTI crude oil plunged $6.32 to $103.01 per barrel. Elsewhere, the gold spot price traded $28.00 lower to $1,957.00 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.1% at 99.04.
Volatility remained, as investors continued to monitor geopolitical headlines with the Russia/Ukraine conflict entering its third week. Hopes of a diplomatic resolution have increased, as the two countries were set to meet today, but the negotiations were delayed until tomorrow due to what a Ukrainian presidential advisor termed as a “technical pause.” Prior to today’s scheduled meeting, officials on both sides were upbeat over the weekend about the upcoming talks. So far, negotiations have ended without any progress on a ceasefire, and reports of Russia intensifying its invasion have dominated the news. The U.S. and other global allies have levied crippling financial sanctions, including an unprecedented move to handcuff the country’s central bank, and the U.S. and U.K. have banned the imports of Russian energy. Meanwhile, the Federal Reserve’s monetary policy meeting looms on the week’s horizon, with uncertainty of how aggressive the central bank will be in what is expected to be the initiation of a tightening campaign, as the conflict in eastern Europe has added a new variable to the equation.
The bond market has been just as volatile, with Treasury prices falling for a fifth-straight session to lift yields and continue to pare the rally seen in early March. Meanwhile, the U.S. dollar remains elevated, along with gold, with both hitting mid-2020 levels last week, and crude oil prices are tumbling, pulling back from a surge to highs not seen since 2008
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