Wall Street refocuses on risks as stocks fall and oil prices rise

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, March 21, 2022. REUTERS/Brendan McDermid

BOSTON (Reuters) – US stocks gave up some of the previous week’s gains on Monday and oil prices rose as the conflict in Ukraine continued.

Dow Jones Industrial Average (.DJI) The Standard & Poor’s 500 Index fell 197.09 points, or 0.57%, to 3,4557.84 points (.SPX) It lost 17.31 points, or 0.39%, to 4445.81 points, and the Nasdaq Composite (nineteenth) It fell 160.70 points, or 1.16%, to 13,733.14.

Boeing (ban) Shares fell more than 5.5% Monday morning after the crash of the 737 in China. Read more

Most stock markets rebounded last week in anticipation of a final peace deal on Ukraine, but it will likely take actual progress to justify further gains.

Turkey’s foreign minister said on Sunday that Russia and Ukraine were close to an agreement on “critical” issues and hoped for a ceasefire if the two sides did not back down from the progress made so far. Read more

Ukraine on Monday defied a Russian ultimatum that its forces laid down their weapons before dawn in Mariupol, as the European Union was about to consider a potential energy embargo on Russia. Read more

“The coming days will be a critical test of whether last week’s risk rebound has been overblown. Hopes for a peaceful resolution in Ukraine have relied more on the headlines than on the evidence,” said ING’s Francesco Pesol and Chris Turner.

MSCI World Stock Index (.MIWD00000PUS.) It was down 0.41% as of 10:30 AM ET (1430 GMT). European stocks were volatile with STOXX 600 across the region (.stoxx) The index is down 0.01%.

Last week’s BofA survey of global fund managers was bearish biased with cash levels the highest since April 2020 and the global growth outlook the lowest since the 2008 financial crisis. Longer oil and tradable commodities have been the busiest and most vulnerable to declines. Read more

The war in Ukraine, soaring commodity prices, supply chain issues, and tightening policies have made investors less optimistic about global earnings growth prospects.

Bond investors braced for more hawkish language from the US Federal Reserve as President Jerome Powell spoke on Monday and other Fed members during the week.

Policy makers have signaled a series of future rate hikes to move the money rate anywhere from 1.75% to 3.0% by the end of the year. The market is indicating a 50-50 chance of a half point hike in May and a higher chance by June.

Atlanta Fed President Rafael Bostick said Monday that he has decided to raise interest rates eight times for this year and next, fewer than most of his colleagues because he is concerned about the effects of the Russian invasion of Ukraine on the US economy. Read more

flattened curves

Bond investors seem aware of the risks to growth given the remarkable stability of the US Treasury yield curve in recent weeks. The spread between two-year and 10-year returns narrowed Monday to 11.37 basis points, the smallest since the pandemic began in March 2020.

The dollar index settled at 98.30, surpassing its recent peak hit earlier in March at 99.415. The euro fell 0.13 percent to $1.1035, after rising 1.3 percent last week.

In the commodity markets, gold failed to get much of a lift from safe haven flows or inflation fears, losing more than 3% last week. It was up 0.8% on Monday at $1,936 an ounce.

Oil prices rose on Monday, after losing ground last week, as there was no easy alternative to Russian barrels in a tight market. Read more

Brent rose 6% to $114.40, while US crude rose 5.5% to $110.50 a barrel with European Union countries considering joining the United States in a Russian oil embargo, while the weekend attack on Saudi oil facilities caused tension.

Additional reporting by Lawrence Delevingne in Boston, Danilo Masoni in Milan and Wayne Cole in Sydney; Editing by Bernadette Bohm

Our criteria: Thomson Reuters Trust Principles.