Daily market review

United States

An early equities rally on positive-sounding comments from President Vladimir Putin gave way to selling as investors doubted that Putin could be trusted and oil prices rebounded. The Dow Jones industrial average lost 0.7 percent, the S&P 500 fell 1.3 percent and the NASDAQ lost 2.2 percent.

Risk aversion returned before another frightening weekend in Ukraine. Investors were quick to sell into strength on the view that equities remain overpriced for a period of slower growth and lower profits. Meanwhile, a flattening US Treasury yield curve, with two-year notes up another 5 basis points Friday, underlined expectations that the Federal Reserve will raise rates more aggressively over time to get inflation under control, even as growth slows due to surging costs for food, energy and other staples.

Equity losses were across the board. The FANMAG stocks were mostly lower, with Google down 1.7 percent, and Facebook/Meta off 3.9 percent amid antitrust probes in the UK and EU. Chinese stocks with dual listings in the US and China tanked amid worries they face delisting after the Securities and Exchange Commission named several Chinese firms for failing to meet audit requirements.

Weakest sectors included technology, communications services, and consumer discretionary. Utilities held up best in defensive trading.

Among companies in focus, Rivian, the electric vehicle maker, lost 7.6 percent after an earnings miss and lower production guidance. DocuSign, the electronic signature leader, plunged 20 percent on weak guidance. On the positive side, Oracle rose 1.5 percent as the market liked the software giant's quarterly results. Deere, the machinery leader, rose 3.0 percent after an upgrade at Wells Fargo.

A much weaker than expected US consumer sentiment report showing rising inflation worries added to the bearish market narrative. The consumer sentiment index dropped to 59.7 in March from 62.7 in February, below expectations for a 61.7 reading.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil rose US$3.08 to US$112.55 while spot gold fell US$13.33 to US$1984.33. The US dollar rose against most major currencies. Yields on the US Treasury 30-year bond declined 1 basis point to 2.36 percent, and the 10-year note rose 1 basis point to 1.99 percent.


Russian President Vladimir Putin's comment that he sees "positive shifts" in talks with Ukraine boosted equities Friday. The Europe-wide STOXX 600 gained 1.0 percent, the German DAX rose 1.4 percent, the French CAC gained 0.9 percent and the UK FTSE 100 was up 0.8 percent.

All sectors rose, led by travel & leisure, financial services, media, insurance, construction & materials, and basic resources. Lagging but still positive were oil & gas, autos & parts, utilities, and food & beverage.

On the negative side, investors are worried about surging fuel and fertilizer costs and shortages of inputs from Ukraine and Russia affecting European companies, including automakers. Daimler was off 0.9 percent and down 1.9 percent Friday on these concerns. Separately, the newly hawkish European Central Bank remains in focus after Thursday's unexpected news that the ECB would accelerate its withdrawal of quantitative easing and move up the timeframe to consider rate increases. Hot US inflation readings have prompted markets to ratchet up expectations for rate increases.

Among companies in the news, Wizz Air gained 6.1 percent after an analyst upgrade. Telecom Italia gained 4.8 percent as it considers KKR's takeover offer. Fraport, the airport operator, rose 2.5 percent on positive traffic news.

Asia Pacific

Asia-Pacific equities tracked Wall Street lower on fallout from the Ukraine conflict, hot inflation readings and soaring commodities prices.

Chinese stocks recovered from early steep losses triggered by concern that several popular Chinese names may be delisted in the US after the Securities and Exchange Commission named Yum China and ACM Research among others for failing to meet US requirements. Buyers emerged at the lows to help the CSI 300 index end up 0.3 percent and the Shanghai composite up 0.4 percent. Meanwhile, Hong Kong's Hang Seng index fell 1.6 percent as investors worried that more companies could be added to the SEC list. Alibaba, which has not been named by the SEC, fell 5.5 percent.

Japanese markets reacted badly to the weak US close and Ukraine concerns and investors pared risk positions headed into the weekend. The Nikkei 225 lost 2.1 percent and the broader TOPIX lost 1.7 percent with growth stocks leading the selloff.

The Taiwan Taiex fell 1.0 percent, the South Korean KOSPI fell 0.7 percent, but the Indian BSE Sensex firmed 0.2 percent.

Australian equities followed the region lower with the All Ordinaries index down 1.0 percent. Growth stocks lagged, especially technology, along with consumer discretionary, amid worries that rising fuel costs will sap consumer spending.

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