The stock market rallied as investors celebrated signals of progress in negotiations between Russia and Ukraine that were expected to resolve the conflict that had dragged on for 5 weeks while oil prices eased.
Investors are seen looking for riskier assets, ignoring rising inflation and rising interest rates, even as the U.S. government warns that Russia’s latest move is not a withdrawal but rather a relocation of its troops.
Wall Street’s major indices are seen to end March on a positive sign but it is also poised to post its worst annual and quarterly start since the start of 2020 as a result of the Covid-19 pandemic.
The Dow Jones Industrial average index jumped 0.97%, the S&P 500 jumped 1.23%and the Nasdaq Composite hit 1.8%.
MSCI's worldwide share gauge rose 1.54%.
According to analysts at Bank of America Global Equity Derivatives Research, in the past 2 months, S&P has produced its best rally in history, which is larger than the 10 -day rally in 7 of 11 S&P markets since 1927.
Clearly, such excellence has been achieved despite a weak fundamentals with the existence of inflation, rising interest rates as well as the inversion of the curve, in addition to the Federal Reserve (Fed) risking the equity market to accelerate the rise.
The rally on Wall Street was also supported by March US consumer data which showed a rebound with a record 4 consecutive days of gains.
Meanwhile, the closely watched US yield curve reversed for the first time since September 2019, further signaling the possibility of a recession to follow.
2 and 10 -year treasury yields tracked as signs of a recession, fell 0.03 basis points as investors bet that the Fed’s aggressive tightening will hurt the economy in the long run.
The benchmark US 10 -year yield retreated to 2.391% while the 2 -year yield fell to 2.367%.
The inversion of the curve which is considered a predictor of this recession is credible however even analysts say it has been distorted by quantitative easing and investors should not read too much about it.
