Stocks gained for the second day in a row on Wednesday as more positive news on diplomatic progress between Russia and Ukraine emerged. Later, the Federal Reserve’s interest rate decision will steal the show in the markets.
Dow Jones Industrial Average
increased by 500 points, or 1.5%. the
gained 1.9% and the
climbed 2.7%. This comes after the Dow rose 1.8% and the other two indexes gained more than 2% on Tuesday. The S&P 500 ended Monday at just over 4,170, a closing low for the year and a level at which investors have twice bought stocks aggressively.
According to the Financial Times, unconfirmed reports indicate that Russia and Ukraine are moving forward on a 15-point peace deal that includes a ceasefire and a Russian withdrawal provided kyiv agrees to limits on its military.
Additionally, according to multiple reports, Ukrainian President Volodymyr Zelensky said talks between the two sides seemed “more realistic.”
Meanwhile, the price of WTI crude oil, slightly below $96 a barrel, is down 25% from the multi-year high of $130 reached earlier this month. The concern is that the continuation of the war will cause Western countries to stop buying Russian oil – the United States has already imposed an import ban – thus reducing global supply. The rise in the price of oil adds to the already heavy inflation that consumers have had to deal with.
So while stocks are having a mini run, the markets are still watching several things. While there may be progress on the war front, Ukraine has just launched a counter-offensive against Russia, signaling that the war is far from over at this time.
In addition, the Federal Reserve will make its announcement this afternoon. Markets expect the central bank to raise the benchmark policy rate by a quarter of a percentage point, with a chance of a hike of half a percentage point to just under 4%, according to CME Group data. But regardless of the immediate move, if the Fed indicates more than five hikes are on the horizon, stocks could sell off, wrote Tom Essaye, founder of Sevens Report Research.
But for now, stocks are rallying as most of the Fed-related news has been reflected in the US stock market. “We said this Fed meeting had the potential to turn into a ‘risky’ event…and so far, it is happening,” wrote Andrew Brenner of NatAlliance Securities.
Elsewhere, retail sales rose 0.3% month-over-month in February, missing forecasts of a 0.4% increase. Markets are more likely to focus on economic data for the coming months that encompasses the entire period of high oil and gas prices.
Overseas, the pan-European
increased by 2.8%, and Hong Kong
Hang Seng Index
Traders in Asia witnessed a dramatic day after China’s top administrative authority said it would work to stabilize China’s stock markets and boost economic growth, the official Xinhua news agency reported.
It spurred a big rally, with shares of some of China’s biggest companies up 20% as the Hang Seng posted its biggest daily gains since 2008. But the key Chinese stock index is still deep in territory. correction, down almost 14% this year and some 40% below its all-time closing high in 2018.
Here are 7 stocks moving on Wednesday:
Popular Chinese stocks listed in the United States soared, with
Ali Baba (symbol: BABA) up 21% in the United States
JD.com (JD) jumped 31%, with
NetEase (NTES) climbing 19%.
Yum China Holdings (YUMC) gained 8%.
Wynn Resorts (WYNN), which sees 40% of its sales come from China according to FactSet, saw its stock gain 8.9%.
Las Vegas Sands (LVS), which makes the majority of its sales in China, saw its shares rise 9.8%.
Starbucks (SBUX) gained 7.9%. The company sees 12% of its sales come from China, and it got an upgrade to Overweight from Neutral at JPMorgan. Additionally, current CEO Kevin Johnson is set to retire and the interim CEO will be former chef Howard Schultz.