Stocks climb as investors keep eyes on Fed, Russia-Ukraine crisis

U.S. stocks rose Thursday as investors continued to weigh a number of risks, including the Federal Reserve’s inflation flight and Russia’s war in Ukraine.

The S&P 500 climbed 0.4% to 4,472.77, while the Dow Jones Industrial Average inched up slightly by 0.2% to 34,407.87. The Nasdaq Composite gained 0.4% to 13,976.95.

In Russia, the Moscow Exchange partially reopened Thursday after a nearly monthlong shutdown to resume local trading in 33 securities, including oil giant Gazprom and Russian majority state-owned financial institution Sberbank. The Central Bank banned short-selling on stocks, however, and prohibited foreign investors from selling stocks. The benchmark MOEX index (IMOEX.ME) gained as much as 10% in early trading.

The White House in a statement early Thursday called the re-opening a “charade,” and noted the government was “artificially propping up the shares of companies that are trading.”

Investors continue to monitor developments on the conflict in Eastern Europe and the global response. President Joe Biden is set to convene with NATO allies in Brussels in a meeting that will set the stage for the announcement of more sanctions against Russia and greater humanitarian aid for Ukraine.

Wednesday marked two years since the S&P 500 bottomed in the 2020 global stock market crash after the World Health Organization moved to declare COVID-19 an official pandemic. Since then, the benchmark has registered its best two-year gain — more than 100% from the low — since 1937, according to data from Bespoke Investment Group.

Although the recovery makes the period the best two-year bull run in history in terms of strength, per Bespoke, U.S. stocks have had a rocky start to 2022 amid a backdrop of growing headwinds.

Historically high levels of inflation have tasked the Fed with reining in surging price levels without slowing economic growth. Stocks have oscillated between gains and losses as traders adjusted to hawkish comments earlier this week from Fed Chair Jerome Powell that indicated officials were prepared to lean into higher short-term interest rates “as needed” to mitigate fast-rising price levels. Powell’s comments come just a week after the central bank lifted its benchmark Federal Funds Rate by 0.25% (to a target range of 0.25% to 0.50%).

“Policymakers were more hawkish than anticipated, exceeding estimates for interest rates and inflation, while reducing forecasts for economic growth,” Comerica Wealth Management Chief Investment Officer John Lynch said in a note.

Since 1958, the last nine interest rate tightening campaigns have seen the S&P 500 register less than average returns of roughly 3.0% in the one-year period following the initial rate hike, Lynch pointed out. However, the index has shown the propensity to climb for more than three years following the initial rate hike, with annualized returns of about 18.0%.

“The era of quantitative easing is seemingly over, and quantitative tightening has begun,” Lynch said. “Though the policy dynamics are shifting, we encourage investors to continue to focus on the long-term fundamentals supporting growth in the economy and corporate profits.”

Tightening also risks bringing the yield curve, the relationship between short- and long-term interest rates of fixed-income securities issued by the U.S. Treasury, closer to inverting. An inverted yield curve, when the short-term rates exceed the long-term rates, has been a signal of a pending economic recession in the past.

“With an economy in late cycle, fears of impending slowdown make defensive sectors relatively more attractive,” Commonwealth Financial Network global investment strategist Anu Gaggar said in commentary. “Thus, for an equity investor, it is imperative to pick your spots carefully.”

“While a paring back of equities may not be necessary, a defensive relative positioning going into a possible slowdown may help investors ride the wave,” he added.

Despite the Fed’s move to raise rates providing some temporary clarity to traders who for months have awaited steps forward on monetary tightening, geopolitical turmoil in Eastern Europe and its economic toll continue to muddy the bank’s path ahead in fighting inflation.

9:30 a.m. ET: Stocks open higher to extend string of recent swings in U.S. equities

Here were the main moves in markets at the start of trading Thursday:

  • S&P 500 (^GSPC): +20.28 (+0.46%) to 4,476.52

  • Dow (^DJI): +100.32 (+0.29%) to 34,458.82

  • Nasdaq (^IXIC): +72.10 (+0.52%) to 13,994.70

  • Crude (CL=F): -$0.78 (-0.68%) to $114.15 a barrel

  • Gold (GC=F): +$11.00 (+0.57%) to $1,948.30 per ounce

  • 10-year Treasury (^TNX): +6.4 bps to yield 2.3850%

9:22 a.m. ET: New orders on US core capital goods fall in February

U.S.-made capital goods registered an unexpected drop February as shipments slowed, but demand for goods remained robust in a sign manufacturing is likely to continue expanding.

The Commerce Department reported new orders for non-defense capital goods excluding aircraft, a closely-watched measure for business expenditures, slipped 0.3% last month. The decline comes after core capital goods orders jumped 1.3% in January.

Economists surveyed by Bloomberg anticipated core capital goods orders rising 0.5%.

Even as spending is shifting back to services, demand for goods remained strong, keeping manufacturing growing. However, the sector, which accounts for 11.9% of the economy, continues to battle supply chain snafus.

9:02 a.m. ET: LME nickel trading spikes to hit 15% Limit

Nickel jumped by the 15% exchange limit for a second straight day in London. The moves place bearish position holders in the spotlight just two weeks after the market was roiled by an historic short squeeze.

Futures contracts on the metal remained locked at the price limit on the London Metal Exchange early Thursday as the latest spike extends a period of volatility for the market.

In early March, prices soared over 250% across two trading sessions during the short squeeze centered on China’s Tsingshan Holding Group Co. before the market was suspended.

Meanwhile, hedge funds and other investors are weighing legal action against the London Metal Exchange over the recent debacle in the nickel market, according to a report by then Evening Standard.

A journalist poses while looking at a computer screen with the Bloomberg display showing a one-day view of the rise and fall in the value of the nickel, in London on March 8, 2022. – European equities attempted to rebound Tuesday from recent Ukraine-driven losses, while nickel prices rocketed to a record peak on Russian supply fears. The London Metal Exchange suspended trade in nickel after the base metal spiked to a record $101,365 per tonne as Russian supply concerns sparked sharp volatility. (Photo by Ben Stansall / AFP) (Photo by BEN STANSALL/AFP via Getty Images)

8:41 a.m. ET: New jobless claims fall to 187,000 in more than five-decade low

Applications for unemployment insurance fell sharply in the latest weekly data to set a more than 50-year low as the red-hot labor market showed no signs of cooling in the near-term.

The Labor Department latest weekly jobless claims report showed 187,000 claims were filed in the week ended March 19, coming in better than the 210,000 economists surveyed by Bloomberg had expected.

New jobless claims reached the lowest level since September 1969. Continuing claims also fell further to reach 1.35 million — the least since January 1970.

The labor market has remained a point of strength in the U.S. economy, with job openings still elevated but coming down from record levels as more workers rejoin the labor force from the sidelines.

7:14 a.m. ET: US equity futures jump as investors seek to recover Wednesday’s losses

Here were the main moves in futures markets ahead of the open Thursday:

  • S&P 500 futures (ES=F): +21.15 points (+0.48%) to 4,468.75

  • Dow futures (YM=F): +126.00 points (+0.37%) to 34,376.00

  • Nasdaq futures (NQ=F): +76.50 points (+0.53%) to 14,523.50

  • Crude (CL=F): -$0.30 (-0.26%) to $114.63 a barrel

  • Gold (GC=F): +$7.30 (+0.38%) to $1,944.60 per ounce

  • 10-year Treasury (^TNX): 0.00 bps to yield 2.3210%

6:14 p.m. ET Wednesday: Stock futures open little changed as market seesaw continues

Here’s where the major stock index futures opened Wednesday evening:

  • S&P 500 futures (ES=F): +1.50 points (+0.03%) to 4,449.00

  • Dow futures (YM=F): +3.00 points (+0.01%) to 34,253.00

  • Nasdaq futures (NQ=F): +14.50 points (+0.10%) to 14,461.50

  • Crude (CL=F): -$0.54 (-0.47%) to $114.39 a barrel

  • Gold (GC=F): +$7.20 (+0.37%) to $1,944.50 per ounce

  • 10-year Treasury (^TNX): -5.2 bps to yield 2.3210%

Traders work at the New York Stock Exchange NYSE in New York, the United States, on March 9, 2022. U.S. stocks ended higher on Wednesday.The Dow rebounded 2.00 percent to 33,286.25, the S&P 500 rose 2.57 percent to 4,277.88, and the Nasdaq rallied 3.59 percent to 13,255.55. (Photo by Michael Nagle/Xinhua via Getty Images)

Traders work at the New York Stock Exchange NYSE in New York, the United States, on March 9, 2022. U.S. stocks ended higher on Wednesday.The Dow rebounded 2.00 percent to 33,286.25, the S&P 500 rose 2.57 percent to 4,277.88, and the Nasdaq rallied 3.59 percent to 13,255.55. (Photo by Michael Nagle/Xinhua via Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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