Investors are weighing the probability of a recession with two outcomes

US stock markets: The Dow rose and the S&P 500 ended lower in choppy trade on Friday, as beaten-down bank shares gained and investors grappled with how best to deal with an economy that could skid as the Federal Reserve moves to aggressively tackle inflation. 

The yield on the benchmark 10-year U.S. Treasury note hit a three-year high of 2.73%, helping boost the S&P banking index which rose 1.18%, after slumping to 13-month lows on Thursday. The index is down 10.8% year to date. Since peaking at two-month highs in late March, the market has trended lower as the Fed signals it will aggressively hike rates, leading investors to reposition their portfolios. 

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Economically sensitive value shares this year have outperformed tech-heavy growth stocks, which often depend on low rates. Investors are weighing the probability of a recession with two outcomes. On the one hand, the Fed could engineer a soft landing with slowing but positive growth, making banks woefully oversold.

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Dow Jones Industrial Average

The Dow Jones Industrial Average rose 0.40%. The biggest gainers of the session on the Dow Jones Industrial Average were Home Depot Inc., which rose 2.76% or 8.36 points to trade at 311.11 at the close. Goldman Sachs Group Inc. added 2.30% or 7.24 points to end at 321.39 and JPMorgan Chase & Co was up 1.83% or 2.40 points to 133.49 in late trade. The biggest losers included Boeing Co, which lost 1.56% or 2.77 points to trade at 175.20 in late trade. Salesforce.com Inc. declined 1.49% or 2.99 points to end at 197.17 and Microsoft Corporation shed 1.46% or 4.40 points to 296.97.

NASDAQ 100

The NASDAQ index declined 1.34%. The top performers on the NASDAQ Composite were Phio Pharmaceuticals Corp which rose 159.18% to 2.35, Medavail Holdings Inc. which was up 39.01% to settle at 1.96, and Bicycle Therapeutics Ltd which gained 24.54% to close at 46.99. The worst performers were Kaleido Biosciences Inc. which was down 81.76% to 0.27 in late trade and Genocea Biosciences Inc. which lost 69.23% to settle at 0.40 and C4 Therapeutics Inc. which was down 50.57% to 11.32 at the close.

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Oil price - Crude Oil market, Brent Oil market

Oil prices slipped in early Asian trading, following the second straight weekly decline after world consumers announced plans to release crude from strategic stocks and as Chinese lockdowns continued. U.S West Texas Intermediate slid 1%. For several weeks, the benchmarks have been at their most volatile since June 2020. 

The market has been watching developments in China, where authorities have kept Shanghai, a city of 26 million people, locked down under its "zero tolerance" for COVID-19. China is the world's biggest oil importer. Member nations of the International Energy Agency (IEA) will release 60 million barrels over the next six months, with the United States matching that amount as part of its 180 million barrel release announced in March.

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The release could also deter producers, including the Organization of the Petroleum Exporting Countries (OPEC) and U.S. shale producers, from accelerating output increases even with prices around $100 a barrel.

Precious and Base Metals - Gold price, Silver price, Palladium price

Gold prices dipped in range-bound trading today, as elevated Treasury yields boosted the dollar and countered support from uncertainty around the Ukraine war, while palladium rose after London's decision to block trading of the metal from Russia. Spot gold was down 0.2% at $1,942.85 per ounce, after hitting a more than one-week high of $1,949.32 earlier in the day. U.S gold futures were up 0.1% at $1,947.40. 

Gold is still trading sideways and that reflects the conflicting currents that we're looking at. There are still real concerns about the geopolitical outlook and the potential for escalation in Ukraine. At the same time, a stronger U.S. dollar and the potential for higher interest rates around the globe are keeping a lid on enthusiasm for gold. 

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The U.S. dollar index gained ground, bolstered by U.S. 10-year Treasury yields hitting a more than three-year high and prospects of aggressive rate hikes by the U.S. Federal Reserve to contain soaring inflation. A stronger dollar makes gold less attractive for other currency holders, while higher U.S. interest rates and yields increase the opportunity cost of holding bullion, which is also used as a hedge against inflationary pressures. 

Ukraine's armed forces braced on Monday for a new Russian offensive as powerful explosions rocked cities in the south and east, lending some support to the safe-haven metal. Palladium gained 3% at 2,499.19 after hitting a more than two-week high earlier in the session. The surge in palladium prices is likely to accelerate the shift from palladium to platinum for use in catalytic converters. 

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The auto-catalyst metal had gained 8.6% on Friday after newly refined Russian platinum and palladium was suspended from trading in London, the metals' biggest trade hub. Spot silver was up 0.1% at $24.77 per ounce and platinum rose 0.7% to $981.88.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Wheat, soybean, and corn futures rose in early trading today, extending gains after the U.S. government's latest assessment of global supply and demand reflected the impact of the Ukraine crisis on Black Sea shipments. Grains prices have largely been underpinned by Russia's invasion of Ukraine, which has stalled large amounts of Ukrainian exports of wheat, corn, and sunflower oil.

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