Daily market review

United States

Equities bounced back Tuesday with megacaps and financials leading while energy stocks lagged with a retreat in oil prices. The Dow Jones industrial average rose 0.7 percent, the S&P 500 gained 1.1 and the NASDAQ outperformed with a gain of 2.0 percent.

Growth stocks outperformed even as bond yields extended their dramatic advance after hawkish comments Monday from Federal Reserve Chair Jerome Powell. The Powell comments fueled talk of a series of 50 basis point rate increases, starting in May. The flattening yield curve suggests expectations for a slowdown have increased, which some analysts say adds to the appeal of growth stocks like Apple, up 2.0 percent Tuesday, and Amazon, up 2.1 percent. Financials outperformed with rising bond yields.

On the downside, energy stocks gave back some recent gains, with oilfield services stocks weakest, including Haliburton, down 1.3 percent.

Among companies in focus, Nike rose 2.4 percent to boost the Dow industrials after reporting an earnings and revenues beat. Boeing rebounded 2.8 percent to recover Monday's losses. Moderna, the vaccine maker, rallied 6.5 percent after unveiling new vaccine plans. Tesla jumped by 7.9 percent after the automaker opened its new German plant and investors bought into its growth story.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell US$1.11 to US$115.34 while spot gold fell US$13.44 to US$1,922.09. The US dollar was mixed vs. major currencies. The US Treasury 30-year bond yield rose 7 basis points to 2.59 percent, and the 10-year note yield rose 8 basis points to 2.38 percent.


Equities rose with a boost from financials and commodity-linked stocks. The Europe-wide STOXX 600 gained 0.9 percent, the German DAX gained 1.0 percent, the French CAC rose 1.2 percent, and the UK FTSE 100 rose 0.5 percent.

Monday's hawkish comments from Fed Chair Jerome Powell and rising market expectations for 50 basis point increases in the federal funds rate starting in May lifted bond yields and financials.

Mining and materials stocks advanced as commodity prices extended their rally amid expectations for increasingly serious supply disruptions flowing from the apparent stalemate in Ukraine.

Oil prices came off their highs but remained elevated after news that European Union countries had not agreed to block Russian oil imports. Royal Dutch Shell fell 0.9 percent to end at the day's lows in London trading but BP rose 1.3 percent.

On the downside, retail and health care lagged, with Kingfisher, the UK retailer, off 4.9 percent on an earnings miss and poor guidance. On the positive side, Deutsche Bank rose 4.9 percent after the Financial Times reported that Archegos Capital Management had built a big stake in the bank, one of its major lenders.

Asia Pacific

Asia-Pacific equities mostly rose Tuesday on hopes for new stimulus from China and Japan.

Chinese markets recovered from early losses after reports the China state council had pledged to implement new monetary and fiscal stimulus. Markets started off weaker following a selloff on Wall Street on hawkish comments from Fed Chair Jerome Powell. The CSI 300 index declined 0.1 percent and the Shanghai composite rose 0.2 percent. The Hong Kong Hang Seng index jumped 3.2 percent on the stimulus hopes. Alibaba was a notable winner, up 11 percent, after raising its share buybacks.

Japan's Nikkei 225 rose 1.5 percent and the wider TOPIX gained 1.3 percent after reports the government may follow passage of its latest expansive budget package with a supplemental budget aimed at boosting the economy. On the negative side was news that Tokyo and other areas were facing power shortages in the wake of the recent earthquake.

The Taiwan Taiex was flat. The South Korean Kospi rose 0.9 percent with tech stocks up again. The Indian BSE Sensex rose 1.2 percent with autos and technology leading.

Surging mining and energy shares lifted Australian equities as commodities prices extended recent gains. The All Ordinaries index rose 0.8 percent. Short-end government debt instruments saw yields surge in line with the move in US Treasuries Monday on expectations for even more hawkish behavior from the Reserve Bank of Australia and other central banks.

Looking ahead*

In Asia/Pacific, Singapore CPI and Taiwan industrial production figures are scheduled. In Europe, UK CPI and PPI reports are due. In North America, Fed Chair Jerome Powell will speak and the US new home sales report is on tap.

Global Stock Market Recap

Global Bond Market Recap

Global Currency Recap

Commodities and currencies