Stocks extend gains on dip-buying; oil declines

U.S. stocks rebounded from a four-day selloff as dip buyers wagered the global economic impact of escalating sanctions on Russia is already reflected in market prices. Treasuries and the dollar fell.

U.S.  stocks rebounded from a four-day selloff as dip buyers wagered the global economic impact of escalating sanctions on Russia is already reflected in market prices. Treasuries and the dollar fell. 

Equities ticked higher early Wednesday after a top foreign policy aide to President Volodymyr Zelenskiy said Ukraine is open to discussing Russia’s demand of neutrality as long as it’s given security guarantees. Markets have been roiled by fears of a global inflation shock from a commodity-price rally fueled by Russia’s isolation, while supply disruptions threaten to usher in a period of slower global growth. 

The S&P 500 bounced back from a nine-month low, with financials leading a broad-based rally. The tech-heavy Nasdaq 100 outperformed major benchmarks, climbing more than 2 per cent. Oil prices tumbled after rally driven by President Joe Biden’s ban on fossil-fuel imports from Russia. Treasuries slid, and dollar weakened for the first time in five days, as haven demand waned.

“Risk markets are higher today, suggesting traders are no longer in flight mode and are starting to think about value again,” said Chris Low, chief economist at FHN Financial. “That doesn’t mean volatility is over. Economic consequences, macro and micro, are still in flux. The West is still working on sanctions for Russian energy, and the duration and outcome of the war is still a big unknown.”

Russian forces intensified their bombardment of Ukraine’s capital Kyiv, the U.S. said. The Russian stock market’s trading halt is being extended in an effort to keep prices from tumbling in the wake of vast international sanctions.