U.S. stocks ‘receded’ from temporary peaks in oil prices and treasury yields ‘tide’ as investors returned to focus on the Ukraine crisis and Federal Reserve (Fed) action in curbing inflation.
The Dow Jones Industrial average fell 201.94 points or 0.58% at 34,552.99, the S&P 500 lost 1.94 points or 0.04% at 4,461.18 and the Nasdaq Composite was down 55.38 points or 0.4% at 13,838.46.
Meanwhile, a 737 jet that crashed in China caused Boeing shares to fall 3.6%.
Other global stocks that entered a positive rally last week, retreated as Ukraine protested Russia’s move to deploy troops in Mariupol, further signaling possible sanctions on Russia’s energy resources by the European Union (EU).
The pan-European STOXX 600 index was up 0.04% while the MSCI benchmark of worldwide stocks was down 0.24%.
According to Erin Browne, portfolio manager of PIMCO Newport Beach California, investors are trying to digest the impact of financial tightening, rising oil prices and the unrelenting geopolitical situation.
Meanwhile, Fed chairman Jerome Powell in a statement on Monday said that the US central bank would act more decisively in restoring inflation and expect a higher rate hike in realizing the plan.
Powell further said, with strong labor market conditions and high inflation, there is a need for the Fed to be more assertive in keeping monetary policy at a more neutral level and tightening policy to restore price stability.
It is common knowledge that the Fed has announced a rate hike last week, the first hike in 3 years.
Atlanta Federal Reserve Bank president Raphael Bostic envisions there are 8 rate hikes to be made this year and next.
Following Powell's comments, the benchmark 10 -year yield for treasury notes rose 2.307% while 2 -year yield notes added 2.132%.
It is the first time since May 2019 for the 2 -year note that it usually stays away from the expected 2%rate increase.
As for the currency market, the dollar strengthened against a number of other currencies after Powell's comments.
The dollar index strengthened at 98.49 while the Euro fell 0.3% at $ 1.105.
Commodity markets, meanwhile, saw crude oil prices soar after news of the EU imposing sanctions on Russia's energy resources with US crude up 7.41% at $ 112.46 and Brent up 7.87% at $ 116.42.
Gold also stepped up 0.75% at $ 1,935 after declining more than 3% last week.
