Dow falls 300 points as US inflation stays at 40-year high, Ukraine-Russia talks see no progress

US stocks fell Thursday, as investors weighed up surging US consumer price inflation, a hawkish tilt from the European Central Bank, and stalled Russia-Ukraine negotiations.

Oil prices were also rising again.

How are stock-index futures trading?
  • The Dow Jones Industrial Average DJIA,
    -1.33%
    fell 357 points, or 1.1%, to 32,930.

  • The S&P 500 SPX,
    -1.54%
    dropped 58 points, or 1.4%, to 4,220.

  • The Nasdaq Composite COMP,
    -2.25%
    was down 280 points, or 2.1%, at 12,975.

On Wednesday, the Dow industrials rose 653.61 points, or 2%, to end at 33,286.25, the S&P 500 rose 2.6%, for its biggest daily percentage gain since June 5, 2020. The Nasdaq Composite advanced 3.6% for its strongest daily percentage rise since March 9, 2021.

What’s driving markets?

Stocks were handing back a chunk of Wednesday’s strong rebound, as data showed US February consumer prices rose to 7.9%, a 40-year high, with some seeing more inflation to come due to the Russia-Ukraine war. In other data, weekly US jobless benefit claims edged up 11,000 to 227,000.

“For those looking for some reprieve in the latest CPI numbers, they were surely disappointed as February’s CPI data indicated further upward consumer prices pressures were present,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

“Overall, the data probably does not change the objective of the Fed as the need to move policy rates off zero has been apparent for some time,” Ripley said.

Wednesday’s stock market rally was aided by falling oil prices and optimism over Ukraine-Russia negotiations, however US crude futures CL00,
+ 1.33%

CL.1,
+ 1.33%

CLJ22,
+ 1.33%
were again marching higher Thursday, up 1.1% to $ 110 a barrel. Brent crude prices BRN00,
+ 2.11%

BRNK22,
+ 2.11%
were up 1.9% at $ 113.21 a barrel.

High-level negotiations in Turkey between Russia and Ukraine foreign ministers earlier on Thursday failed to make progress as Russian forces continued to lay siege to major Ukraine cities, including a deadly attack on a maternity hospital in Mariupol.

Read: Wartime market volatility on display as stocks surge, dollar and oil plunge

Pressure on central bankers was also evident on Thursday, with the European Central Bank leaving key interest rates unchanged, but announcing plans to speed up its asset-purchasing program exit, as it described Russia’s invasion of Ukraine a “watershed moment.”

“The Russian invasion of Ukraine will negatively affect the euro-area economy,” said ECB President Christine Lagarde, in a press conference.

Also ahead Thursday is data on US real household wealth and nonfinancial debt for the fourth quarter, due at 1 pm Eastern, and the Federal budget deficit at 2 pm Eastern.

Which companies are in focus?
  • Shares of Amazon.com
    AMZN,
    + 4.62%
    climbed 4.7% after the e-commerce giant announced plans for a 20-to-1 stock split, the first split since the dotcom boom.

How are other assets trading?
  • The yield on the 10-year Treasury note TMUBMUSD10Y,
    2.003%
    rose 5 basis points to 1,994%. 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, rose 0.3%.

  • Gold futures for April delivery GC00,
    + 0.62%

    GCJ22,
    + 0.62%
    rose 0.7% to $ 2,001.30 an ounce.

  • Bitcoin BTCUSD,
    -6.58%
    fell nearly 7% to $ 39,127

  • In European equities, the Stoxx Europe 600 SXXP,
    -1.71%
    fell 1.6%, while London’s FTSE 100 UKX declined 1.3%.

  • In Asia, the Shanghai Composite SHCOMP rose 1.2%, along with the Hang Seng Index HSI and Japan’s Nikkei 225 NIK surged 3.9%.

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