Stocks rebound after two-day drop while bonds fall

Stocks rose after two days of selling as investors assessed the latest geopolitical developments and comments from Jerome Powell on the Federal Reserve’s policy intentions. Bonds fell, while oil traded near US$110 a barrel.

Stocks rose after two days of selling as investors assessed the latest geopolitical developments and comments from Jerome Powell on the Federal Reserve’s policy intentions. Bonds fell, while oil traded near US$110 a barrel.

The S&P 500 pushed higher, led by gains in energy and financial shares, while the technology-heavy Nasdaq 100 underperformed. U.S. 10-year yields halted a four-day slide. Commodity markets surged to multiyear highs as traders backed away from Russia, sparking anxiety that supply will fall short in everything from wheat to natural gas. Aluminum hit a fresh record and wheat rose to the highest since 2008. In Europe, natural gas prices and coal set all-time highs.

“Despite the risks, a sustained spike in energy prices leading to recession is not our base case,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We advise investors to consider hedges against the crisis, rather than exiting risk assets.”

The Fed chief said the central bank expects to boost rates in March, while adding that Russia’s invasion of Ukraine has added uncertainty to the U.S. outlook. He’ll appear before the House Financial Services Committee at 10 a.m. in Washington. Fed Bank of St. Louis President James Bullard called for a “rapid withdrawal of policy accommodation” and emphasized officials must follow through with rate hikes and a balance-sheet runoff or risk damaging the central bank’s credibility.

U.S. companies in February added more jobs than forecast as COVID-19 cases dropped and restrictions eased, encouraging more Americans to work. The data precede Friday’s monthly employment report from the Labor Department, which is currently forecast to show that private payrolls increased by 383,000 in February.