Some of the main moves in markets:


  • The S&P 500 rose 1.2 per cent as of 4 p.m. New York time
  • The Nasdaq 100 rose 1.7 per cent
  • The Dow Jones Industrial Average rose 1 per cent
  • The MSCI World index rose 1.6 per cent


  • The Bloomberg Dollar Spot Index fell 0.6 per cent
  • The euro rose 0.9 per cent to US$1.1088
  • The British pound was little changed at US$1.3097
  • The Japanese yen rose 0.8 per cent to 122.87 per dollar


  • The yield on 10-year Treasuries declined seven basis points to 2.39 per cent
  • Germany’s 10-year yield advanced five basis points to 0.63 per cent
  • Britain’s 10-year yield advanced two basis points to 1.64 per cent


  • West Texas Intermediate crude fell 0.9 per cent to US$105.02 a barrel
  • Gold futures fell 1 per cent to US$1,925.40 an ounce


U.S. stocks rose in a broad-based rally on Tuesday amid optimism for progress in talks between Russia and Ukraine. Most Treasury yields retreated, while a key segment of the curve inverted for the first time since 2019.

The S&P 500 gained for a fourth day, closing above the 4,600 level for the first time since mid-January. All 11 industry groups rose, except for energy stocks following declines in oil prices. The Nasdaq 100 climbed more than 1.5 per cent and Apple Inc. rose for an 11th day in the longest winning streak since 2003. The dollar declined while the euro rose the most in almost three weeks. In after-hours trading, Micron Technology Inc. gained after the maker of memory chips forecast third-quarter adjusted revenue that beat estimates.

Prospects for scaling back the war in Ukraine boosted risk sentiment. Talks between Russia and Ukraine failed to reach agreement on a cease-fire, but offered a potential pathway to a meeting between Vladimir Putin and Volodymyr Zelenskiy. Russia said it was cutting back military activity near the capital Kyiv and the city of Chernihiv, and its chief negotiator said Moscow would take steps to “de-escalate” the conflict.

“You’re getting a look at how the market might respond to de-escalation,” Shawn Cruz, senior market strategist at TD Ameritrade Inc., said by phone. “I do think we’ll get more headlines around slow-but-sure progress and discussions of at least being willing to come to the bargaining table becoming more frequent, and that will be the driver of intraday volatility.”

The selloff in Treasuries stalled, with yields lower across most maturities as talks drove down oil prices and inflation expectations. The five-year breakeven rate on inflation protected Treasuries dropped as much as 12 basis points to 3.52 per cent after hitting record highs last week. Meanwhile, the two-year yield briefly exceeded the 10-year for the first time since 2019, reinforcing the view that Federal Reserve rate increases may cause a recession.


Ukrainian negotiators said there is enough ground coming out of talks to hold meeting between Putin and Zelenskiy after wrapping up discussions in Turkey on Tuesday. But Moscow’s announcement of de-escalation came as the advance on the capital was already stalled, and previous efforts at diplomacy and overtures such as humanitarian corridors have yielded little.

Global shares have rallied from the lows reached after Russia invaded Ukraine. Such resilience contrasts with inverting yield curves, which are shaking economic confidence as investors brace for the Fed to tighten monetary policy to contain inflation running at the fastest pace in four decades. The two- to 10-year inversion is the latest in a series beginning in October, when 20-year yields topped 30-year yields. In the past month, inversion has come to the 7- to 10-year and the 5- to 7-year segments, among others.

Philadelphia Fed Bank President Patrick Harker said he expects a series of “deliberate, methodical” rate increases this year, but said he is open to a half-point move in May if near-term data shows more inflation.

On the U.S. economic front, consumer confidence edged up in March, suggesting solid job growth offset Americans’ concerns over accelerating inflation, according to a report Tuesday. Government data Friday are expected to show the economy probably added close to a half million jobs in March as the unemployment rate fell to 3.7 per cent.

More commentary

  • “What we haven’t really started to get our hands around and what we haven’t had to deal with yet is quantitative tightening,” Scott Ladner, chief investment officer at Horizon Investments, said by phone. “And so we’re probably about halfway through the Fed story for this tightening cycle. But the second half is frankly a lot more uncertain than the first half.”
  • “When you have a situation where oil prices have spiked and oil becomes a larger component of GDP, historically that has lead to a recession,” said Joe Gilbert, portfolio manager at Integrity Asset Management, in an interview with Bloomberg TV. “But we’re in a lot stronger position from the way consumers are, the job market-the health there. So our base case is that we avoid recession, but we will have periods of slower growth.”
  • “We are seeing small changes in the facts, primarily some favorable negotiations between Russia and Ukraine,” said Mike Bailey, director of research at FBB Capital Partners. “Investors are extrapolating this small positive into perhaps a bigger positive that a cease-fire is around the corner. Finally, investor opinions are getting more bullish by the day as buyers see improving fundamentals and stocks trading below peak, especially for tech.”


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