Market Snapshot: U.S. stocks close lower after inflation stays at 40-year high, Ukraine-Russia talks stall

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U.S. stocks fell Thursday, as investors weighed up surging U.S. consumer price inflation, a hawkish tilt from the European Central Bank, and stalled Russia-Ukraine negotiations.

Oil prices fell back in choppy afternoon trading.

How are stock-index futures trading?

The Dow Jones Industrial Average
DJIA,
-0.56%

fell 195 points, or 0.6%, to 33,090.

The S&P 500
SPX,
-0.64%

dropped 26 points, or 0.6%, to 4,252.

The Nasdaq Composite
COMP,
-1.10%

was down 135 points, or 1%, at 13,120.

On Wednesday, the Dow industrials rose 653.61 points, or 2%, to end at 33,286.25, the S&P 500 rose 2.6%, for its biggest daily percentage gain since June 5, 2020. The Nasdaq Composite advanced 3.6% for its strongest daily percentage rise since March 9, 2021.

What’s driving markets?

Stocks were still handing back a chunk of Wednesday’s strong rebound on Thursday afternoon, though off the day’s worst levels, after data showed U.S. February consumer prices rose to 7.9%, a 40-year high, with some seeing more inflation to come due to the Russia-Ukraine war. In other data, weekly U.S. jobless benefit claims edged up 11,000 to 227,000.

“For those looking for some reprieve in the latest CPI numbers, they were surely disappointed as February’s CPI data indicated further upward consumer prices pressures were present,” said Charlie Ripley, senior investment strategist at Allianz Investment Management.

“Overall, the data likely doesn’t change the objective of the Fed as the need to move policy rates off zero has been apparent for some time,” Ripley said.

Wednesday’s stock market rally was aided by falling oil prices and optimism over Ukraine-Russia negotiations, however U.S. crude futures
CL00,
-2.51%

CL.1,
-2.51%

CLJ22,
-2.51%

were again marching higher Thursday morning before falling back again in the afternoon, by 2.4% to $106 a barrel. Brent crude prices
BRN00,
-1.66%

BRNK22,
-1.66%

also reversed early gains to drop 1.6% at $109.5 a barrel.

High-level negotiations in Turkey between Russia and Ukraine foreign ministers earlier on Thursday failed to make progress as Russian forces continued to lay seige to major Ukraine cities, including a deadly attack on a maternity hospital in Mariupol.

Read: Wartime market volatility on display as stocks surge, dollar and oil plunge

Pressure on central bankers was also evident on Thursday, with the European Central Bank leaving key interest rates unchanged, but announcing plans to speed up its asset-purchasing program exit, as it described Russia’s invasion of Ukraine a “watershed moment.”

“The Russian invasion of Ukraine will negatively affect the euro-area economy,” said ECB President Christine Lagarde, in a press conference.

Which companies are in focus?

Shares of Amazon.com
AMZN,
+6.14%

climbed 6.4% after the e-commerce giant announced plans for a 20-to-1 stock split, the first split since the dotcom boom.

How are other assets trading?

The yield on the 10-year Treasury note
TMUBMUSD10Y,
2.008%

rose 5 basis points to 2.006%. Yields and debt prices move opposite each other.

The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, rose 0.5%.

Gold futures for April delivery 
GC00,
+0.66%

GCJ22,
+0.66%

rose 0.7% to $2,001.30 an ounce.

Bitcoin
BTCUSD,
-6.37%

fell nearly 7% to $39,129

In European equities, the Stoxx Europe 600 
SXXP,
-1.69%

fell 1.6%, while London’s FTSE 100 UKX declined 1.3%.

In Asia, the Shanghai Composite SHCOMP rose 1.2%, along with the Hang Seng Index HSI and Japan’s Nikkei 225 NIK surged 3.9%.

Additional reporting by Barbara Kollmeyer

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