Stocks turn lower, oil prices extend gains

by · March 21, 2022

Shares fell on Monday to present again some positive factors after final week’s advances, whereas power costs resumed a march greater.

The S&P 500, Dow and Nasdaq traded decrease Monday afternoon in a uneven session. The foremost indexes prolonged losses after Federal Reserve Chair Jerome Powell mentioned the Fed would “alter coverage as wanted” to convey down inflation, together with by dashing up rate of interest hikes if crucial. Treasury yields added to earlier positive factors throughout the curve, and the benchmark 10-year yield rose to close 2.3%.

Power and commodity costs spiked amid the most recent developments in Russia’s struggle in Ukraine. As of Monday, Ukraine refused to give up its closely attacked port metropolis of Mariupol to Russian forces, whereas the civilian loss of life toll throughout Ukraine climbed.

U.S. crude oil costs (CL=F) jumped greater than 6% at session highs to briefly high $111 per barrel, and Brent crude, the worldwide commonplace, (BZ=F), rose to about $114 per barrel. Aluminum, palladium and wheat costs every additionally gained Monday.

In the beginning of a comparatively quiet week for company earnings outcomes and new financial knowledge, merchants continued to mull the market implications of the Federal Reserve’s newest financial coverage choice in opposition to persistently elevated inflation and the continued struggle in Ukraine, which has exacerbated present worth pressures.

The Federal Reserve’s transfer final week to elevate rates of interest by a quarter-point and sign one other six price hikes later this yr was met with an no less than momentary rally in U.S. equities, with merchants relieved to obtain some readability on the central financial institution’s financial path ahead after weeks of hypothesis. And the Fed additionally signaled the possible begin of discussions after which implementation of quantitative tightening, or rolling belongings off its almost $9 trillion stability sheet.

“The important thing message to come back from conferences of the Federal Reserve and Financial institution of England final week, and the European Central Financial institution the week earlier than, was that the struggle in Ukraine has not deterred central bankers from their plans to tighten coverage,” Neil Shearing, group chief economist for Capital Economics, wrote in a be aware. “The truth is, each the Fed and the ECB delivered hawkish surprises.”

“The struggle has added to the squeeze on actual incomes in superior economies and brought about a considerable tightening of monetary situations in Europe. However, for now, central banks stay targeted on bringing down inflation and containing any second-round results on wages and costs. That is, on stability, the proper judgement,” he added. “Whereas the financial outlook is unusually unsure, the excessive start line for inflation – and the probability that it’s going to rise additional – justifies a tightening of coverage.”

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1:49 p.m. ET: Shares drop after Powell remarks, Nasdaq sheds 1%

Here is the place markets have been buying and selling Monday afternoon:

S&P 500 (^GSPC): -24.29 (-0.54%) to 4,438.83
Dow (^DJI): -334.60 (-0.96%) to 34,420.33
Nasdaq (^IXIC): -158.86 (-1.15%) to 13,733.95
Crude (CL=F): +$5.18 (+4.95%) to $109.88 a barrel
Gold (GC=F): -$0.40 (-0.02%) to $1,928.90 per ounce
10-year Treasury (^TNX): +14.7 bps to yield 2.295%

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12:33 p.m. ET: Powell says Fed will ‘alter coverage as wanted’ to convey down inflation, protect robust labor market

Federal Reserve Chair Jerome Powell mentioned Monday that the central financial institution would proceed to observe incoming knowledge and developments and “alter financial coverage as wanted” to convey down inflation whereas additionally conserving financial progress intact.

“Because the outlook evolves, we’ll alter coverage as wanted as a way to guarantee a return to cost stability with a robust job market,” Powell mentioned in a speech.

He additionally famous that “ongoing price will increase shall be acceptable” to assist convey inflation again towards the Fed’s goal of two%. This was per what the Fed telegraphed final week following its March assembly, whereby the median members’ forecast noticed charges rising one other six occasions this yr.

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9:30 a.m. ET: Shares open barely decrease

Here is the place shares have been buying and selling simply after market open Monday morning:

S&P 500 (^GSPC): +7.29 (+0.16%) to 4,470.41
Dow (^DJI): -10.66 (-0.03%) to 34,744.27
Nasdaq (^IXIC): -16.46 (-0.12%) to 13,877.47
Crude (CL=F): +$4.05 (+3.87%) to $108.75 a barrel
Gold (GC=F): -$6.60 (-0.34%) to $1,922.70 per ounce
10-year Treasury (^TNX): +8.9 bps to yield 2.237%

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8:51 a.m. ET: Fed’s Bostic sees six complete price hikes this yr given ‘elevated ranges of uncertainty’

Atlanta Federal Reserve President Raphael Bostic mentioned Monday he noticed the central financial institution elevating rates of interest a complete of six occasions this yr, representing a extra dovish outlook than a lot of his friends supplied within the Federal Open Market Committee’s newest Abstract of Financial Projections (SEP).

Bostic, who isn’t a voting member this yr on the FOMC, mentioned in a keynote tackle Monday morning on the Nationwide Affiliation for Enterprise Economics Annual Coverage Convention, that he “penciled in six price hikes for 2022 and two extra for 2023” within the Fed’s most up-to-date SEP launched final Wednesday.

“I acknowledge that I’m towards the underside of the distribution relative to my colleagues, however the elevated ranges of uncertainty are entrance ahead in my thoughts and have tempered my confidence that an especially aggressive price path is acceptable at this time,” Bostic mentioned. “Occasions are shifting quickly, and we may see marked adjustments alongside key dimensions, similar to combination demand, that would warrant shortly adjusting the trajectory of coverage.”

“Right here the dangers go each methods. Ought to demand falter within the face of financial uncertainty or removing of financial coverage lodging, then the suitable path could also be shallower than I at the moment mission,” he added. “However there are different developments, similar to shifts in provide methods, that would imply greater prices and thus encourage a steeper coverage path than I anticipate.”

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8:37 a.m. ET: Chicago Fed Nationwide Exercise Index exhibits modest deceleration in financial progress in Feb.

The Chicago Federal Reserve’s month-to-month Nationwide Exercise Index fell barely greater than anticipated in February, reflecting a reasonable deceleration in U.S. financial progress.

The headline index ticked right down to 0.51 for February, the Chicago Fed mentioned Monday morning. This dropped for 0.59 in January, which was in flip revised barely decrease from the 0.69 beforehand reported. Readings of 0 are per U.S. financial progress charges on the common historic development, whereas readings above zero point out progress.

Of the 85 month-to-month financial indicators comprising the index, 61 made optimistic contributions, whereas 24 detracted from the index throughout February.

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8:20 a.m. ET: Boeing shares drop after 737 passenger jet crashes in China

Shares of Dow part Boeing (BA) fell Monday morning in pre-market buying and selling after a passenger airplane with greater than 130 folks on board crashed in China’s Guangxi province.

The Civil Aviation Administration of China confirmed the crash of the Boeing 737 jet, which was operated by China Jap Airways. The variety of casualties following the crash stays unknown, and Chinese language officers have dispatched a rescue group to the crash web site.

Shares of Boeing dropped greater than 6% in early buying and selling. The inventory has fallen by 4.2% for the year-to-date via Friday’s shut.

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7:40 a.m. ET Monday: Inventory futures combined, Dow and Nasdaq head for barely decrease opens

Here is the place markets have been buying and selling heading into the opening bell Monday morning:

S&P 500 futures (ES=F): +2.25 factors (+0.05%) to 4,455.75
Dow futures (YM=F): -58 factors (-0.17%) to 34,575.00
Nasdaq futures (NQ=F): -1 level (-0.01%) to 14,412.50
Crude (CL=F): +$4.55 (+4.35%) to $109.25 a barrel
Gold (GC=F): -$2.80 (-0.15%) to $1,926.50 per ounce
10-year Treasury (^TNX): +4.3 bps to yield 2.191%

NEW YORK, NEW YORK – MARCH 16: Merchants work on the ground of the New York Inventory Change (NYSE) on March 16, 2022 in New York Metropolis. The Dow began off the day in optimistic territory, extending yesterday’s rally. (Picture by Spencer Platt/Getty Photographs)

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Emily McCormick is a reporter for Yahoo Finance. Observe her on Twitter

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