Daily market review

United States

Ukraine fears and concern about a more hawkish Federal Reserve hit the market again Tuesday but equities came off their lows in the afternoon after President Biden announced new US sanctions against Russia that were more limited than expected. The Dow Jones industrial average fell 1.4 percent, the S&P 500 declined 1.0 percent, and the NASDAQ lost 1.2 percent.

Markets also focused on Federal Reserve Governor Michelle Bowman's comment Monday that she and other officials will be watching the data to "judge the appropriate size of a rate increase" in March, somewhat in contrast with more cautious comments last week from New York Fed President John Williams, who said he had not heard a compelling argument to support a 50-point March move.

Among sectors, consumer discretionary, materials, and consumer staples lagged while energy, financials, and health care held up best. Energy stocks got a boost as Ukraine worries lifted oil prices. The FANMAG sector and megacaps had another bad day with Apple off 1.8 percent, Amazon down 1.6 percent and Nvidia down 1.1 percent.

Autos lagged to depress consumer discretionary stocks with Tesla and Ford both off 4.1 percent. Best Buy slipped 7.3 percent and Wynn Resorts declined 4.9 percent as consumer-oriented stocks sank.

Among companies in focus, Home Depot fell 8.8 percent to weigh on the Dow industrials after issuing disappointing guidance. Boeing, another big Dow stock, fell 4.9 percent on Ukraine worries. On the positive side, Medtronic, the medical device maker, gained 3.1 percent as investors liked its guidance.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$2.74 to US$96.51 while spot gold rose US$3.27 to US$1,900.71. The US dollar was mixed vs. major currencies. Yields on the US Treasury 30-year bond declined 1 basis point to 2.23 percent and the 10-year note was flat at 1.93 percent.


Equities were narrowly mixed with major indexes recovering from opening lows. The Europe-wide STOXX 600 firmed 0.1 percent, the German DAX declined 0.3 percent, the French CAC was flat, and UK FTSE 100 was up 0.1 percent.

Concern about a worsening situation in Ukraine drove equities lower initially and remained a negative, offset in part by a positive German Ifo business sentiment report and supportive corporate news, including word that Volkswagen, up 9.5 percent, and Porsche, up 12 percent, are moving toward an IPO for Porsche.

In other company news, HSBC rose 0.8 percent after a buyback announcement. On the downside, Hargreaves Lansdown, the financial services company, dropped 16 percent on weaker-than-expected trading results.

In economic news, the German Ifo business sentiment report was much better than anticipated. The headline climate indicator rose 2.9 points to 98.9 in February, its strongest print since September and 2.5 points above its pre-Covid level.

Asia Pacific

Asia/Pacific markets dropped in a flight to quality on escalating Ukraine worries.

Japan's markets saw losses across the board. The Nikkei 225 fell 1.7 percent and the wider Topix index lost 1.6 percent. Among sectors, marine transportation, materials, industrials, and automakers led the decliners.

China's CSI 300 index fell 1.3 percent and the value-stock heavy Shanghai composite lost 1.0 percent. Telecoms, consumer stocks, tech, and financials led the losses while energy and materials held up best.

The Hong Kong Hang Seng index fell 2.7 percent. Losses were across the board but hardest hit were health care, consumer, and biotech. Among stocks, OK Rusal, the aluminum giant, dropped 19 percent on the threat of anti-Russia sanctions.

The Taiwan Taiex and the South Korean KOSPI both lost 1.4 percent. Indian equities slipped with the BSE Sensex down 0.7 percent. The Australian All Ordinaries index lost 1.1 percent.

Looking ahead*

In Asia/Pacific, the New Zealand Reserve Bank of New Zealand policy announcement, Australian wage price index, Singapore CPI, and Taiwan industrial production are scheduled. In Europe, German Gfk consumer climate, French business climate, and Eurozone HICP reports are due. In North America, no major US or Canadian reports are on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies