Dow industrials surge nearly 700 points, Nasdaq climbs 3%, as investors cling to hope for Ukraine-Russia detente

US stock benchmarks rallied midday Wednesday, extending their gains as the session progressed, amid tentative signs that a resolution of the bloody conflict between Russia and Ukraine could soon be achieved, even as fighting continued apace.

What’s happening
  • The Dow Jones Industrial Average DJIA,
    + 2.18%
    rose 682 points, or 2.1%, to 33,319.

  • The S&P 500 SPX,
    + 2.59%
    gained 2.5%, or 103 points, to 4,273.

  • The Nasdaq Composite Index COMP,
    + 3.20%
    advanced 3%, or 384 points, to 13,181.

On Tuesday, the Dow fell 185 points, or 0.56%, to 32,633, the S&P 500 declined 30 points, or 0.72%, to 4,171, and the Nasdaq Composite dropped 35 points, or 0.28%, to 12,796.

The S&P 500 had dropped nearly 5% over the last four sessions.

What’s driving markets

US markets were in rally mode, joining the rest of global stock exchanges, as investors digested the latest developments in Eastern Europe.

Wednesday’s climb comes ahead of a Thursday meeting between Russia’s and Ukraine’s foreign ministers in Turkey, as Reuters reported, with analysts looking at an apparent thawing of positions. Ukraine President Volodymyr Zelensky said he was no longer pressing for NATO membership, one of Russia’s stated reasons for its invasion. Reports also have indicated that Zelensky is ready for a diplomatic solution to the hostilities sparked by Moscow’s unprovoked invasion of Kyiv.

Meanwhile, some humanitarian corridors were opened to allow citizens to flee the war and some energy and agricultural commodity prices eased back from recent highs, while the number of companies withdrawing from Russia grew.

Also on Wednesday, US lawmakers unveiled a new bill that would fund the federal government for the remainder of the fiscal year, as well as further aid for Ukraine and funnel more money toward combating COVID-19, which the market may also be taking as a positive.

Elsewhere, the German DAX DAX,
+ 7.92%
and French CAC 40 PX1,
+ 7.13%
each surged, finishing up 7.9% and 7.1%, respectively on Wednesday.

Oil futures CL.1,
-5.49%
slipped sharply a day after President Joe Biden announced a ban on Russian oil and gas imports, as major brands including McDonald’s MCD,
+ 0.67%
and Coca-Cola KO,
+ 1.21%
said they would exit Russia.

The recent surge in commodity prices resulting from the war in Ukraine has been seen leading to even higher inflation in Europe and the US, in particular, raising the possibility of slower economic growth or even recession. Some banks have raised their inflation forecasts, lowered growth outlooks and considered the possibility of stagflation.

In economic reports, US job openings fell slightly in January to 11.3 million after setting a record by the end of 2021, but millions of workers continue to quit each month in what has become known as the “Great Resignation.”

The number of open positions slipped from a revised 11.5 million December, the Labor Department said Wednesday.

The jobs data comes ahead of Thursday’s February consumer-price index and a European Central Bank policy update, which could prove pivotal for investors.

Which companies are in focus?
  • Papa John’s International Inc. PZZA said Wednesday it has suspended all of its corporate operations in Russia, as the pizza restaurant chain condemns Russia’s invasion of Ukraine. Its stock was up 3.3%.

  • Shares of General Electric Co. GE rallied 5.4% to extend their bounce off at 14-month low, after the industrial conglomerate disclosed a new $ 3 billion stock repurchase program.

  • Stitch Fix shares SFIX,
    -8.36%
    were falling over 11% after the online apparel retailer chopped its financial forecasts for the full year, saying revenue may decline.

  • Shares of Bumble Inc.
    BMBL,
    + 42.86%
    surged 44.5% after the online dating company posted upbeat user-growth figures Tuesday evening. Bumble said it added 1.64 million paying users in the fourth quarter, up from 1.27 million a year prior, exceeding the FactSet consensus estimates.

How are other assets faring?
  • The yield on the 10-year Treasury note jumped 5.5 basis points to 1.92%, after the benchmark climbed to highs not reached since Feb. 25 based on levels at 3 pm Eastern Time. Yields and debt prices move opposite each other.

  • The ICE US Dollar Index DXY, a measure of the currency against a basket of six major rivals, was down around 1.2%, on pace for its sharpest daily fall in two years.

  • Gold futures for April delivery GCJ22 declined nearly 2% to briefly trade below $ 2,000 an ounce.

  • Bitcoin BTCUSD advanced 10% at $ 42,300 after President Joe Biden signed an executive order to explore regulation and use cases for crypto, which was viewed as constructive for the sector.

  • In European equities, the Stoxx Europe 600 SXXP,
    + 4.68%
    closed 4.7%, while London’s FTSE 100 UKX climbed 3.3%.

  • In Asia, the Shanghai Composite SHCOMP dropped 1.1%, while the Hang Seng Index HSI slipped 0.7% and Japan’s Nikkei 225 NIK retreated 0.3%.

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