US stocks defy Russia fears and manage to turnaround
• US stocks rose broadly on Thursday, staging a massive comeback from steep declines seen earlier in the day, as investors looked past Russia’s attack on Ukraine.
• The S&P 500 rose 1.5% to 4,288.70 after dropping more than 2.6% earlier in the session. The Dow Jones Industrial Average added 0.28% to 33,223.83, erasing an 859-point decline. The Nasdaq Composite ended the session 3.3% higher at 13,473.59, after being down nearly 3.5% at one point in the session.
• Despite the stunning reversal, the S&P 500 remains in correction territory — more than 10% off its Jan. 3 record close. The Nasdaq Composite opened in bear market territory on Thursday, down more than 20% from its record high in November, before bouncing off those levels. The Nasdaq still sits about 16% from its all-time high, however.
• Investors bought the dip on some of the biggest tech names during Thursday’s volatile session. Amazon, Netflix, Alphabet and Microsoft all closed higher — erasing sharp declines from earlier in the day. Netflix rose 6.1%, and Microsoft added 5.1%. Alphabet and Meta Platforms popped 4% and 4.6%, respectively.
• The rebound in the US stood in contrast to a stinging sell-off in European and Russian stocks, as well as a shift into low-risk government debt, following Russia’s invasion just after noon yesterday. The regional Stoxx 600 share index closed down 3.3%, in a technical correction — defined as a 10% decline from a recent peak — with heavy falls across bourses in Germany, France, Italy and the UK.
• The escalation of the conflict in Ukraine is dominating the global market narrative because of the potential for Russia’s energy and resources being cut out of global supply chains, exacerbating already high inflation and prompting central banks to respond with rapid interest rate rises.
• Ahead of a meeting by EU leaders on Thursday to decide on further sanctions against Russia, Brent crude oil rose as much as 9.2% to US$105.79, crossing the US$100 threshold for the first time since 2014.
• Brent pared most of those gains to settle up 2.3% at US$99.08 after US President Joe Biden laid out fresh sanctions against Russia that spared energy exports.
• In government debt markets, the yield on the 10-year US Treasury note fell 0.03 percentage points to 1.96% as the benchmark government debt instrument rose in price.
• How long this crisis takes to unfold will determine how much inflation, financial conditions, and growth will be impacted.
• In Asia, benchmarks in Hong Kong, Singapore and India each posted declines of more than 3%. Financials and technology stocks were among those weighing most on the regional gauge, with the
selloff in Chinese internet giants heightened ahead of Alibaba Group Holding Ltd’s earnings release.