The Nasdaq was up 2% in morning trading and the Dow and S&P 500 were up more than 1%.
Oil prices fell on Tuesday and U.S. stocks rose early in the morning as investors noticed a renewed coronavirus shutdown during ceasefire negotiations amid escalating conflicts between China, Russia and Ukraine.
Many industrial centers in China have been hit with business and travel restrictions as the country fights the spread of the worst coronavirus seen since 2020, with daily cases doubling on Tuesday, according to Chinese authorities. The resurgence in a country that has embraced a “zero tolerance” approach to the virus has raised fears of a significant slowdown in one of the world’s largest economic engines, as well as concerns about an even more fractured global supply chain.
For the first time in two weeks, the price of oil per barrel fell below $ 100. Brent crude, the international benchmark, fell more than 7.8% to around $ 98.50 a barrel. West Texas Intermediate Oil, the US benchmark oil, fell 8.2% to around $ 94.50.
“The resurgence of the case was a strong reminder that the pandemic is still ongoing,” Ras Mold, investment director of AJ Bell, told The Washington Post on Tuesday. “Investors can be overly apathetic about the risks of reblocking.”
The Hong Kong Composite Index Hong Kong closed more than 5.7% in its worst close since 2016, while the Shanghai Composite Index fell nearly 5%.
Despite the tension, US stocks rose during morning trading. The Dow Jones industry average rose 430 points, or 1.3 percent, in the afternoon. The S&P 500 gained nearly 1.7 percent, while the high-tech Nasdaq gained more than 2.2 percent.
European indices were mostly negative in afternoon trading, with the Stoxx 600 benchmark down 1%.
Wayne Vicker, Chief Investment Officer of MissionSquare Pensions, said Tuesday’s rally likely reflects the impact of short-term trading as investors took advantage of the recent selloff.
“Despite a good start today, I believe we will continue to be an added factor for investors,” Wicker told The Post. “Until we have some clarity on the geopolitical issues affecting Europe and on the trend of inflation and interest rates, it is likely that in the coming months there will be greater volatility in global markets.”
Markets hate uncertainty, but uncertainty is still inevitable in 2022. In addition to the whirlwind of complications from the coronavirus, the war in Ukraine and sanctions also collide with inflation, which is at its highest for the past 40 years. Before the invasion. Households and businesses face price increases at every stage of the supply chain and at the box office.
The drop in oil prices had little effect on consumers in relieving the pressure on the pump. The average U.S. gallon of gas was $ 4.31 on Tuesday, near a record high of more than 80 cents a month ago, according to data. AAA.
Pavel Molchanov, along with energy analyst Raymond James, says the Russian-Ukraine truce will help keep oil prices low for a long time. In an email to The Post, Molchanov told The Post that “extreme fears of war” have pushed the price to $ 130 a barrel in recent sessions, adding that the expected price of futures will drop to $ 85 in the past few sessions. 12 months. . Towards a global economy “.
Investors often shy away from geopolitical tensions, but the Ukrainian crisis is heating up markets due to Russia’s pivotal role as a global energy producer. Russia produces about 10 percent of the world’s oil along with the United States and Saudi Arabia, and rising energy costs will quickly stimulate the economy and add to the already fiery inflation.
The CBOE Volatility Index, known as the “Wall Street Fear Gauge”, has risen nearly 50% in the past three months. Market monitoring.
Gold, a safe haven for investors, continued to slide as traders sought riskier assets, losing around 1.7% and trading at around $ 1,928 an ounce. However, the 10-year yield on another US Treasury bill fell to 2,126%. Bond yields reverse prices.
Investors are focused on the Federal Reserve meeting, which begins Tuesday, amid signals of how far the central bank will go in raising key interest rates, its main weapon against inflation. The hike will be the Fed’s first hike after a two-year outbreak of highly adjusted monetary policy.
Ivan Feinsett, chief investment officer of Tigress Financial Partners, said that Russia’s war with Ukraine has “largely hampered the US and global economies” and, as rates rise amid a strong employment climate, “makes it difficult to see what the positive trend of the currency will be.” Profit and customer demand.
Now, on Tuesday, Feinsett told the post that the federal federation must weigh the consequences of the war “to further delay the potential for higher rates rather than a moderate economic recovery.”
Source: Washington Post
Jason Jack is an experienced technology journalist and author at The Nation View. With a background in computer science and engineering, he has a deep understanding of the latest technology trends and developments. He writes about a wide range of technology topics, including artificial intelligence, machine learning, software development, and cybersecurity.