U.S. stocks edged higher Thursday, as world leaders met to respond to Russia’s invasion of Ukraine and investors monitored remarks by Federal Reserve officials.
Technology and communications stock had some of the stronger gains with chipmaker Nvidia
up 7% but the major indexes are mixed for the week so far after recovering last week to levels seen before the start of the war in Ukraine despite a jump in bond yields.
The Dow Jones Industrial Average
rose 219 points, or 0.6%, to 34,579.
The S&P 500
gained 41 points, or 0.9%, to trade at 4,497.
The Nasdaq Composite
was up 167 points, or 1.2%, at 14,088.
On Wednesday, the Dow fell 449 points, or 1.3%, while the S&P 500 declined 1.2% and the Nasdaq Composite dropped 1.3%.
What’s driving markets
U.S. stocks climbed in afternoon trade as President Joe Biden prepared to wrap up a series of gatherings with allies and world leaders in Brussels a month after Russian leader Vladimir Putin’s invaded Ukraine.
The Biden administration rolled out more sanctions against Russia, with the White House saying the U.S. now has sanctioned more than 600 Russian targets.
“Until we see a cessation of hostilities between Russia and Ukraine, it is prudent for investors to raise cash and reduce exposure to stocks,” said Richard Saperstein, chief investment officer at Treasury Partners, in emailed comments. “While the stock market is attempting to recover from its correction, markets are fundamentally riskier and more uncertain than before Russia’s invasion of Ukraine.”
Investors also heard Thursday from several Fed officials on inflation and the central banking’s likely response. Minneapolis Fed President Neel Kashkari said he sees seven 25 basis point interest rate hikes as likely this year, but warned “there’s a danger of overdoing it,” while speaking at a business conference.
Chicago Fed President Charles Evans pointed to the same pace of hikes for 2022 as likely, with three more next year, which would bring the Fed fund’s rate to a range of 2.75% – 3%. Federal Reserve Gov. Christopher Waller told a housing conference he was watching the “red-hot” market to help gauge the appropriate monetary policy response.
Fed Chairman Jerome Powell earlier this week left the door open to rate increases larger than the usual 25 basis point increment.
“If markets survive Putin, they’ll still have to deal with Powell. The outbreak of war isn’t the only threat to worry about. Even prior to Russia’s invasion of Ukraine, there were growing risks to the investment backdrop that had already precipitated increased market volatility,” Saperstein said.
Other central banks also have geared up to tighten financial conditions. Mexican President Andres Manuel Lopez Obrador on Thursday said monetary policy makers voted to raise a key interest rate by half a percentage point to 6.5%.
The S&P Global U.S. services flash purchasing managers index for March rose to 58.9 from 56.5 a month earlier, while the manufacturing flash PMI rose to 58.5 from 57.3. A reading of more than 50 indicates expanding activity.
In Europe, the MOEX Russia Index rose more than 4% after Moscow Exchange resumed trading after nearly a month with a shortened four-hour session in 33 out of 50 stocks listed on the benchmark. However, foreign shareholders are unable to sell shares, a restriction Russia imposed to counter Western sanctions against its financial system and the weakening ruble.
Meanwhile, crude oil prices
were lower Thursday after a 5% rise Wednesday when Russia limited capacity on a pipeline after storm damage. While the U.S. and the U.K. are boycotting Russian oil, other nations are still buying Russian commodities, notably Europe for its natural-gas needs.
Which companies are in focus?
shares fell 5% after executives said that issues with supplies and hiring enough workers harmed the company’s ability to complete construction of homes early in 2022, and financial results missed expectations in a Wednesday report.
The yield on the 10-year Treasury note
rose 2 basis points to 2.34%. Yields and debt prices move opposite each other.
The ICE U.S. Dollar Index
a measure of the currency against a basket of six major rivals, rose 0.3%.
rose 4.8% to trade above $44,260.
rose 1.4%, to $1,964 an ounce.
—Steve Goldstein contributed additional reporting