May 23, 2022

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Wall Street escalates as tensions between Russia and Ukraine subside

Wall Street escalates as tensions between Russia and Ukraine subside

  • Energy stocks fell as crude oil prices fell
  • US producer prices gained strength in January
  • Advance Travel and Leisure Inventories
  • Indexes up: Dow 1.18%, S&P 1.47%, Nasdaq 2.13%

NEW YORK (Reuters) – Wall Street jumped into a broad rally on Tuesday as signs of easing tensions along the Russia-Ukraine border sent buyers back into the stock market.

The three major indexes rose sharply, with leading tech stocks and tech stocks providing the biggest boost and putting the Nasdaq index ahead.

Geopolitical tension eased somewhat after Russia said it had withdrawn some of its forces from the Ukrainian border, sparking bullish sentiment in stocks and causing crude oil prices to slide as supply concerns calmed.

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The announcement received cautious responses, and the United States and NATO said they had not yet seen evidence of a withdrawal. Read more

“There seems to be a sense of risk due to the notion that the situation between Russia and Ukraine may be deflating,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. “It’s clearly a sentiment-driven market.”

CBOE Market Volatility Index (.VIX) It fell from its highest level in three weeks.

On the economic front, a report from the Labor Department showed producer prices rose in January at twice the expected rate, reinforcing economists’ expectations that the Federal Reserve will deal with persistent inflation by aggressively raising key interest rates. Read more

The chart below shows the Producer Price Index (PPI) data, along with other leading indicators, and how far above the Fed’s average annual 2% inflation target is:

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inflation

The market has now priced better than expectations that the central bank will raise the target rate for the federal funds by 50 basis points at its March monetary policy meeting.

“The market is now pricing in a bolder Fed, and outside of geopolitics there is lower uncertainty,” Mayfield added. “But the market is never so uncertain, so you’re always dealing with possibilities.”

Dow Jones Industrial Average (.DJI) The Standard & Poor’s 500 Index rose 409.43 points, or 1.18%, to 34975.6 points (.SPX) Gained 64.65 points or 1.47% to 4466.32 points and the Nasdaq Composite (nineteenth) It added 294.04 points, or 2.13%, to 14,084.96 points.

Nine of the 11 major sectors in the S&P 500 were higher, with technology stocks (.SPLRCT) Enjoy the highest profit rate. energy stock, (.SPNY) Affected by the drop in crude oil prices, it was the lowest.

The fourth-quarter reporting season is entering its last stretch, with 370 companies in the S&P 500 reporting. Of those, 78.1% beat analyst estimates, according to preliminary Refinitiv data.

“It’s good that the strength of earnings is behind these macro issues,” Mayfield said.

Philadelphia Semiconductor Index (.sox) It rose 4.8 percent after Intel Corp. announced a $5.4 billion deal to buy Israel’s semiconductor tower for chip maker (TSEM.TA). Read more

Restaurant Brands International rose 4.4% after the fast food company beat earnings and revenue estimates for the quarter. Read more

Marriott International Hotel (March) It also beat Street expectations due to higher occupancy rates, sending its shares up 4.8%. Read more

Other travel-related companies jumped, with the S&P 1500 . airline index (.SPCOMAIR) The hotels/restaurants/entertainment index (.SPCOMHRL) It rose 5.7% and 2.4%, respectively.

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Shares of cloud infrastructure company Arista Networks jumped 6.3% after forecasting better-than-expected revenue for the current quarter.

Advance issues outnumbered declining issues on the New York Stock Exchange by 3.50 to 1; On Nasdaq, the ratio was 4.07 to 1 in favor of advanced traders.

S&P 500 Index posted 6 new highs in 52 weeks and 3 new lows; The Nasdaq recorded 35 new highs and 57 new lows.

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Stephen Kolb reports. Additional reporting by Devik Jain, Susan Mathew and Shreyachi Sanyal in Bengaluru; Editing by Aurora Ellis

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