Stocks Start Week on Shaky Ground…..

Last week’s bearishness carried over to the new week, which will be shortened by the Good Friday holiday. U.S. stocks continued to grapple with the uncertain implications of an expected aggressive Fed and the ongoing war in Ukraine, while awaiting some key economic data this week, headlined by March inflation reports that begin to hit the tape tomorrow. The markets digested hotter-than-expected consumer and producer price inflation out of China overnight and awaited Thursday’s monetary policy decision from the European Central Bank. Treasuries finished mixed but the yield curve continued to steepen, while the U.S. dollar added to recent gains. Crude oil prices fell, and gold moved to the upside. In equity news, Twitter announced that Elon Musk decided to not join the company’s board, and Shopify announced a 10-for-1 stock split. In M&A news, SailPoint Technologies announced an agreement to be acquired by Thoma Bravo in a transaction valued at about $6.9 billion. Europe finished mixed and Asia fell broadly.

The Dow Jones Industrial Average declined 413 points (1.2%) to 34,308, the S&P 500 Index lost 76 points (1.7%) to 4,413, and the Nasdaq Composite decreased 299 points (2.2%) to 13,412. In moderate volume, 4.2 billion shares of NYSE-listed stocks were traded, and 4.8 billion shares changed hands on the Nasdaq. WTI crude oil fell $3.97 to $94.29 per barrel. Elsewhere, the gold spot price traded $11.20 higher to $1,956.80 per ounce, and the Dollar Index was up 0.2% at 99.97.

Treasuries finished mixed after a recent drop that has seen rates jump and the yield curve steepen. The yield curve spread has garnered heavy attention, with some portions inverting earlier this month to foster talk of the potential for a recession on the horizon. However, the action as of late saw the yield curve steepen with a key portion—spread between 2-year and 10-year yields—moving out of inversion territory, with the yield on the 10-year note yield hitting three-year highs.

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