U.S. stocks resumed losses Thursday after economic data out of Washington showed another 40-year high CPI print and talks held between Russia and Ukraine’s foreign ministers failed to make progress on negotiating a ceasefire.
The S&P 500 dipped 0.43% to 4,259.49 after posting its biggest gain in two years in the previous session, and the Dow Jones Industrial Average was down 113 points, or 0.34%, to 3,173.22 following a 650-point rally Wednesday. The Nasdaq Composite fell nearly 1% to 13,129.96. Meanwhile, the 10-year U.S. Treasury index soared 6.6 basis points to yield 2%. The U.S. 30-year yield rose to 2.39%, marking the highest level since May 2021.
Russian foreign minister Sergei Lavrov held a meeting in Turkey Thursday with his Ukrainian counterpart Dmytro Kuleba to discuss a 24-hour ceasefire across war zone and opening of a corridor in the southern Ukrainian port of Mariupol but Lavrov reportedly did not commit to either.
The declines come after stocks ended a losing streak in the previous session to log their best session in two years as investors looked optimistically toward a possible de-escalation of Russia’s war in Ukraine.
Energy prices fell sharply Wednesday after soaring to a 14-year high this week following reports Ukrainian president Volodymyr Zelensky was open to discussing a diplomatic solution with Russia. WTI crude oil plunged to around $110 per barrel, while Brent crude fell to trade near $112 per barrel. The S&P 500 Energy sector snapped an 8-day winning streak.
“Markets were priced like the Straits of Hormuz were blockaded, and that was just not reasonable, and it’s not like the Middle East suddenly was offline,” Harris Financial Group managing partner Jamie Cox said in a note. “Markets often have ‘hair on fire’ overreactions to world events which unlocks tremendous value for those who pay attention to the price dislocations.”
“Equity markets have a bid [Wednesday] as the markets [were] clinging to the slightest glimmer of hope of a possible step towards de-escalation when the Ukrainian and Russian finance ministers meet in Turkey tomorrow,” Commonwealth Financial Network global investment strategist Anu Gaggar said in a note. “Markets may also be taking a break from a downtrend and seeing some consolidation due to oversold conditions.”
U.S. traders will continue to monitor geopolitical conditions but temporarily shifted their attention to the Bureau of Labor Statistics’ Consumer Price Index (CPI) for the latest gauge on inflation.
Consumers paid more for a variety of goods and services in February compared to the prior month and year as price level across the economy continued to surge amid lingering supply and demand disruptions. The latest CPI read notched 7.9% in February compared to last year in the fastest annual jump since 1982, also surpassing January’s previous 40-year high rate of 7.5%. The figure was in line with consensus economist expectations, according to Bloomberg data.
“Net, net, the inflation fire was already hot and now with war-driven inflation added to the mix, it will grow even hotter, setting off a scramble by the world’s central banks to pull back their stimulus earlier than expected,” FWDBONDS chief economist Christopher S. Rupkey said in a note.
“A spike in inflation rates has preceded economic recessions historically and this time prices have soared to levels that once again pose a threat to growth,” he added. “Markets were cheering this economic recovery and return to strong economic growth, but the cheers will turn to tears if the inflation outbreak pushes businesses and consumers to the brink of recession.”
Meanwhile. Amazon (AMZN) surged as much as 10% in extended trading Wednesday after the e-commerce giant said its board approved a 20-for-1 split of the company’s common stock — the first since 1999 — and authorized a $10 billion share repurchase.
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4:00 p.m. ET: Main indexes close in the red after rally in previous session:
Here were the main moves in markets at the end of trading Thursday:
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S&P 500 (^GSPC): -18.48 (-0.43%) to 4,259.40
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Dow (^DJI): -113.23 (-0.34%) to 33,173.02
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Nasdaq (^IXIC): -125.58 (-0.95%) to 13,129.96
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Crude (CL=F): -$2.36 (-2.17%) to $106.34 a barrel
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Gold (GC=F): +$15.50 (+0.78%) to $2,003.70 per ounce
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10-year Treasury (^TNX): +6.3 bps to yield 2.0110%
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12:39 p.m. ET: Stocks continue declines as investors weigh Russia-Ukraine, inflation
Here were the main moves in markets as of 12:48 p.m. ET:
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S&P 500 (^GSPC): -56.35 (-1.32%) to 4,221.53
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Dow (^DJI): -385.22 (-1.16%) to 32,901.03
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Nasdaq (^IXIC): -261.65 (-1.97%) to 12,993.90
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Crude (CL=F): -$0.35 (-0.32%) to $108.35 a barrel
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Gold (GC=F): +$15.60 (+0.78%) to $2,003.80 per ounce
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10-year Treasury (^TNX): +6.6 bps to yield 2.0140%
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12:39 p.m. ET: US households enter the year flush with cash
A Federal Reserve report out Thursday showed U.S. household wealth advanced to a record $150.3 trillion in the last quarter of last year.
The figures, along with a strong labor market, indicated Americans were in fairly healthy economic shape even as inflation skyrockets.
The data, ranging from October through December, reflected the majority of the increase in wealth came from a rise in the value of equities, which grew $2.5 trillion during a period the S&P 500 index returned 11%.
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11:52 a.m. ET: Bank stocks slump after posting biggest rally in more than one year
Shares of major publicly traded-banks fell Thursday in the earlier half of the trading session, paring gains from their biggest one-day jump in more than a year, according to Bloomberg data. The declines come after the latest headline inflation print showed CPI jumped to a fresh 40-year high in February.
The KBW Bank Index fell as much as 2% to near the end of a two-day winning streak after the benchmark advanced 4.2% Wednesday in its best day since January 2021, per Bloomberg.
Losses were led by First Republic Bank (FRC), down 20.55%; SVB Financial Group (SIVB), trading 20.43% lower; and Bank of New York Mellon Corp. (BK), shedding -13.2%. Major U.S. bank stocks were also down. Citigroup (CITI) erased as much as 3%, Goldman Sachs (GS) dropped 2.2%, JPMorgan (JPM) dipped 2.3%, Wells Fargo (WFC) dropped 2.7%, Morgan Stanley (MS) declined 2.3% and Bank of America (BAC) erased 2.3%.
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9:45 a.m. ET: Goldman Sachs to withdraw from Russia in Wall Street’s first bank exit
Goldman Sachs Group Inc. (GS) announced plans to close its operations in Russia, making the financial institution the first major bank on Wall Street to exit in response to the country’s military invasion of Ukraine.
“Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements,” the company said Thursday in an emailed statement. “We are focused on supporting our clients across the globe in managing or closing out pre-existing obligations in the market and ensuring the well-being of our people.”
The firm will continue to trade corporate debt tied to Russia without the bank itself making bets on price movements.
“In our role as market-maker standing between buyers and sellers, we are helping our clients reduce their risk in Russian securities which trade in the secondary market, not seeking to speculate,” New York-based Goldman Sachs said in the statement.
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9:30 a.m. ET: Stocks plunge after Russia-Ukraine ceasefire talks fail, red-hot CPI print
Here were the main moves in markets at Thursday’s open:
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S&P 500 (^GSPC): -42.94 (-1.00%) to 4,234.94
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Dow (^DJI): -357.53 (-1.07%) to 32,928.72
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Nasdaq (^IXIC): -163.42 (-1.23%) to 13,092.13
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Crude (CL=F): +$4.20 (+3.86%) to $112.90 a barrel
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Gold (GC=F): +$19.40 (+0.98%) to $2,007.60 per ounce
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10-year Treasury (^TNX): +3.5 bps to yield 1.9830%
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9:00 a.m. ET: Amazon stock split announcement sends shares soaring
Amazon (AMZN) surged as much as 7% in pre-market trading Thursday after the e-commerce giant said its board approved a 20-for-1 split of the company’s common stock — the first since September 1999 and fourth one in its history — and authorized a $10 billion share repurchase.
If shareholders approve of the split, it will begin trading on the new basis on June 6.
“Big tech stalwarts all saw massive strength during the pandemic and the stocks are now ripe for a split. Amazon is following the lead of Apple, Tesla, and Alphabet on the stock split path. These are smart moves as investors positively digest stock splits. We believe tech names are oversold as we seen in five years,” Wedbush tech analyst Dan Ives told Yahoo Finance.
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8:47 a.m. ET: Jobless claims climb more-than-expected but remain near pre-COVID low
Applications for unemployment insurance inched up higher than expected in the latest weekly data but extended a broader trend downward after surging COVID-19 infections earlier this winter briefly disrupted the labor market’s recovery to start the year.
The Labor Department latest weekly jobless claims report reflected 227,000 claims filed in the week ended March 5, compared to the 217,000 economists surveyed by Bloomberg had expected.
Filings for unemployment insurance have mostly fallen lower after a temporary surge mid-January to a print of nearly 300,000, following a rush of U.S. workers applying for benefits amid disruptions from the Omicron coronavirus variant and workforce after the seasonal hiring increase at the end of 2021. Although COVID’s impact on the labor market have appeared to ease, the economic toll the war in Eastern Europe may have remains unclear.
“With seemingly no shortage of sources of turmoil in our world, the U.S. job market has, at least so far, remained a source of relative strength and stability,” Bankrate senior economic analyst Mark Hamrick said in a note. He signaled, however, that although “COVID has relaxed its grip,” inflationary pressures and continuing, and potentially growing supply shocks, will have an “inescapable negative impact on the economy.”
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8:35 a.m. ET: February CPI rises 7.9% over last year to hit fresh 40-year high
U.S. consumers paid more for a variety of goods and services in February compared to the prior month and year as prices levels across the economy continued to surge amid lingering supply and demand disruptions.
The Bureau of Labor Statistics’ Consumer Price Index (CPI) rose 7.9% in February compared to last year in the fastest annual jump since 1982, also surpassing January’s previous 40-year high rate of 7.5%. The figure was in line with consensus economist expectations, according to Bloomberg data.
“Robust pay increases have been no match for the higher costs households are facing on rent, food, electricity, gasoline, and a pervasive list of both goods and services,” Greg McBride, chief financial analyst at Bankrate, said in an email on Tuesday. “The buying power of Americans is being squeezed more and more each day, and you see this reality reflected in the dour consumer sentiment readings.”
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7:00 a.m. ET: Futures falter after Russia-Ukraine peace talks make little progress
Here’s where stocks were ahead of Thursday’s open:
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S&P 500 futures (ES=F): -38.25 points (-0.89%) to 4,277.50
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Dow futures (YM=F): -179.25 points (-1.31%) to 13,555.50
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Nasdaq futures (NQ=F): +29.50 points (+0.21%) to 13,764.25
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Crude (CL=F): +$4.68 (+4.31%) to $113.38 a barrel
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Gold (GC=F): +$21.90 (+1.10%) to $2,010.10 per ounce
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10-year Treasury (^TNX): 0.00 bps to yield 1.9480%
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6:00 p.m. ET Wednesday: Stock futures little changed after U.S. equities stage comeback
Here’s were the main moves in markets at the start of futures trading Wednesday:
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S&P 500 futures (ES=F): +2.25 points (+0.05%) to 4,277.50
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Dow futures (YM=F): -7.00 points (-0.02%) to 33,258.00
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Nasdaq futures (NQ=F): +29.50 points (+0.21%) to 13,764.25
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Crude (CL=F): +$2.35 (+2.16%) to $111.05 a barrel
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Gold (GC=F): +$7.20 (+0.36%) to $1,995.40 per ounce
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10-year Treasury (^TNX): +7.6 bps to yield 1.9480%
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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