The New York Stock Exchange rebounded vigorously on Tuesday, taking advantage of falling oil prices and recovering following approaching its lowest since February the day before.
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According to final results, the Dow Jones index ended up 1.82% at 33,544.34 points.
The tech-heavy Nasdaq rebounded 2.92% to 12,948.62 points following falling 2% the day before. The S&P 500 gained 2.14% to 4,262.45 points.
The sharp rise in equities was driven by “easing concerns over lingering price pressures from the further decline in oil prices,” Wells Fargo analysts said.
A barrel of North Sea Brent oil for May delivery closed below $100 (-6.53%) on Tuesday for the first time since the second day of the invasion of Ukraine, almost three years ago. weeks.
“The market breathed a big sigh of relief as commodity prices fell, mainly food and energy,” Adam Sarhan of 50 Park Investment told AFP.
“Oil has fallen from $130 a barrel to under $100 in a matter of days, which is a big relief for the market as rising food and energy prices act as an indirect tax on consumers and businesses,” added the investment adviser.
This decline in prices is caused by the increase in cases of Covid-19 in China, the leading importer of black gold, which has led to massive confinements.
This “darkens the outlook for energy demand in the world’s second largest economy,” Wells Fargo analysts noted.
Falling crude prices also eased the minds of investors worried regarding inflation, as the Fed meets to announce its first rate hike since 2018 on Wednesday.
As its chairman Jerome Powell warned, the Federal Reserve is preparing to raise interest rates on federal funds by a quarter of a percentage point (0.25%) on Wednesday, starting a cycle of hikes in the face of inflation. tenacious.
Markets will be watching for its new economic forecasts and indications of the pace of increases to be expected.
“Investors will be looking for clues as to how quickly and how much the Fed will raise rates, but the situation in Eastern Europe might cloud the process,” Schwab analysts said.
The day’s macroeconomic news was mixed, with the U.S. wholesale price index flat in February year on year, but manufacturing activity down in the New York area, according to the regional antenna’s ‘Empire State’ indicator. from the Fed.
On the geopolitical level, the Russian offensive in Ukraine intensified on Tuesday, with a series of strikes on Kyiv placed under curfew, despite a resumption of talks aimed at reaching a ceasefire and an important concession of the Ukrainian President, who said he was ready to give up NATO membership.
“Volatility persists with the conflict in Ukraine,” we warned at Schwab.
But the momentum remained strong, led in particular by “bargain hunters”, as the Nasdaq fell more than 20% below its highs on Monday.
Major US airlines raised their revenue outlook for the current quarter and pointed to strong demand for airline tickets offsetting higher fuel prices.
American Airlines (+9.26%), United Airlines (+9.19%), Delta Air Lines (+8.70%) all announced a stronger increase in their upcoming revenues.
All S&P sectors except energy (-3.72%) finished solidly in the green including information technology (+3.43%) and consumer discretionary (+3.39%). ).
Apple took 2.97% to $155.09, Amazon +3.89% to $2,947.33 and Netflix +3.85% to $343.75.
Chipmakers who had suffered the day before resumed colors like Nvidia (+7.70%) or AMD (+6.92%).
In the wake of the fall in oil, the securities of oil service groups lost ground like Schlumberger (-5.51% to 39.26 dollars).
The manufacturer of intelligent exercise bikes Peloton picked up speed following a favorable analyst rating (+11.93% to 22.61 dollars).
Bond yields rose once more, the rate on 10-year US bonds rose to 2.15%.
At around 5:10 p.m. GMT, the euro was trading at $1.0952, up 0.11%.
Bitcoin rose 1.16% to $39,175.
