September 30, 2022

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Dow drops 300 points as US inflation remains at 40-year high, Ukraine-Russia talks see no progress

Dow drops 300 points as US inflation remains at 40-year high, Ukraine-Russia talks see no progress

US stocks fell on Thursday, as investors weighed up rising US consumer price inflation, the hawkish sentiment from the European Central Bank, and stalled negotiations between Russia and Ukraine.

Oil prices also rose again.

How are stock index futures traded?
  • Dow Jones Industrial Average DJIA,
    -1.30%
    It fell 357 points, or 1.1%, to 32,930 points.

  • S&P 500 SPX Index,
    -1.52%
    It fell 58 points, or 1.4%, to 4,220.

  • Nasdaq Composite,
    -2.20%
    It was down 280 points, or 2.1%, at 12,975 points.

On WednesdayThe Dow Jones Industrial Average rose 653.61 points, or 2%, to close at 33,286.25, and the S&P 500 rose 2.6%, its largest daily percentage gain since June 5, 2020. The Nasdaq Composite advanced 3.6% for its strongest daily percentage gain since March. 9, 2021.

What is driving the markets?

Stocks were giving back a large part of a strong recovery on Wednesday, as data showed in US consumer prices for February increased to 7.9%, the highest level in 40 years, with some predicting more inflation due to the Russian-Ukrainian war. In other data, weekly US unemployment benefits claims It rose from 11,000 to 227,000.

“For those looking for some reprieve in the latest CPI numbers, they have certainly been disappointed as the February CPI data suggests more upward pressure on CPI,” said Charlie Ripley, chief investment analyst at Allianz Investment Management.

“Overall, the data likely won’t change the Fed’s target because the need to raise interest rates from zero has been clear for some time,” Ripley said.

Wednesday’s stock market rally was supported by lower oil prices and optimism over Ukraine-Russia negotiations, but US CL00 crude futures,
+ 1.48%

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CL.1,
+ 1.48%

CLJ22,
+ 1.48%
It was trending higher again on Thursday, up 1.1% at $110 a barrel. Brent BRN00 prices,
+ 2.34%

BRNK22,
+ 2.34%
It rose 1.9 percent to $113.21 a barrel.

High-level negotiations in Turkey between the foreign ministers of Russia and Ukraine earlier on Thursday failed to make progress Russian forces continued to take control of major Ukrainian cities, including a deadly attack on a maternity hospital in Mariupol.

Read: Wartime market volatility emerges as stocks rise, dollar and oil fall

Pressure on central bankers was also evident on Thursday, as the European Central Bank left key interest rates unchanged, but announced plans to speed up the exit of its asset purchase program, as it described Russia’s invasion of Ukraine. “Breaking moment”.

“The Russian invasion of Ukraine will negatively affect the eurozone economy,” Christine Lagarde, president of the European Central Bank, said at a press conference.

Also on Thursday are data on US real household wealth and non-financial debt for the fourth quarter, due at 1 p.m. ET, and the federal budget deficit at 2 p.m. ET.

What companies are focused on?
  • shares Amazon.com
    AMZN,
    + 4.82%
    It rose 4.7% after the e-commerce giant’s announcement Plans to split shares from 20 to 1which is the first split since the dotcom boom.

How are other assets traded?
  • The 10-year Treasury yield is TMUBMUSD10Y,
    2.002%
    It rose 5 basis points to 1.994%. Yield and debt prices move opposite each other.

  • ICE . US Dollar Index DXY, The currency gauge against a basket of six major competitors rose 0.3%.

  • Gold futures for April delivery GC00,
    + 0.73%

    GCJ22,
    + 0.73%
    It rose 0.7% to $ 2001.30 an ounce.

  • Bitcoin BTCUSD,
    -6.59%
    It fell nearly 7% to $39,127

  • In European stocks, Stoxx Europe 600 SXXP,
    -1.72%
    It is down 1.6%, while London’s FTSE 100 is down UKX It fell 1.3%.

  • In Asia, the Shanghai boat schcombe It rose 1.2% with the Hang Seng Index HSI The Japanese Nikkei 225 nick It jumped 3.9%.

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