United States
Hawkish-sounding comments from Federal Reserve Chair Jerome Powell and rising oil prices weighed on equities Monday as the market gave back some of its gains from last week. The major indexes recovered from the day's worst levels on dip-buying into the close. The Dow Jones industrial average declined 0.6 percent, the S&P 500 was flat and the NASDAQ declined 0.4 percent.
Equities fell back and bond yields continued higher at midday after Powell, speaking to economists, said the Fed would "take the necessary steps" to bring down inflation, including raising rates more aggressively if needed, which echoed his previous stance and that of other Fed officials. Another uptick in already elevated oil prices helped energy stocks lead the day's winners but added to concern about inflation.
Communications services, consumer discretionary, and technology were among the day's worst performers on the ongoing rise in US market interest rates. Holding up best, in addition to energy, were materials, defense, and industrials.
Among companies in focus, Meta/Facebook fell 2.3 percent after it was blocked from doing business in Russia. Boeing fell 3.6 percent after the crash in China of a Boeing 737-800 flown by China Eastern Airlines. On the positive side, Dow, the chemical giant, rose 1.5 percent.
These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil jumped US$8.86 to US$116.45 while spot gold rose US$15.17 to US$1,935.53. The US dollar was mostly higher vs. major currencies. Yields on the US Treasury 30-year bond rose 11 basis points to 2.53 percent and the 10-year note surged 15 basis points at 2.30 percent.
Europe
Equities were flat to higher with a boost from energy and miners as commodities prices remained elevated. The Europe-wide STOXX 600 was flat, the German DAX and the French CAC both declined 0.6 percent, and the UK FTSE 100 rose 0.5 percent.
Basic resources and energy stocks surged with underlying commodities prices rising as Russia stepped up its bombardment of Ukraine and diplomatic efforts appeared stalled. Oil also rose on reports European Union governments are considering joining the US in banning Russian energy imports, and news of an attack on Saudi oil facilities.
On the downside, real estate and travel & leisure fared worst, with airlines hit by the airliner crash in China.
Among companies in focus, Antofagasta, the miner, jumped 8.7 percent after exiting the troubled Reko Diq project in Pakistan. Tullow Oil gained 9.9 percent after a share transaction involving oil fields in Ghana. Salzgitter, the steel producer, rallied 10 percent after an earnings beat.
Asia Pacific
Asia-Pacific equities were mixed with investors focused on rising oil prices and lack of movement in Russia-Ukraine talks. Trading was limited as Japanese markets were on holiday.
Chinese markets were mixed to weaker with a renewed suspension in China Evergrande and inaction from the People's Bank of China on an expected loan prime rate cut dampening sentiment. The CSI 300 index eased 0.2 percent and the Shanghai composite rose 0.1 percent, with health care and energy outperforming while financials and real estate lagged. The Hong Kong Hang Seng index lost 0.9 percent with internet and tech stocks weak.
The Taiwan Taiex rose 0.6 percent with support from TSMC, up 0.7 percent. The South Korean KOSPI fell 0.8 percent with big tech stocks weak, including Samsung Electronics, down 1.1 percent. The Indian BSE Sensex dropped 1.0 percent with autos, banks, and power stocks off.
Australian equities edged down in a mixed showing with weakness in big banks, biotech, and transports offset by gains in tech, utilities, and energy stocks. The All Ordinaries index fell 0.2 percent.
Looking ahead*
In Asia/Pacific, no major figures are scheduled. In Europe, UK public sector finance and UK CBI industrial trends reports are due. In North America, the Canadian industrial product price index and the US Richmond Fed manufacturing index are on tap.
