Traders are pricing in big moves by the Fed this year to control inflation

US stock market: Wall Street rose yesterday, with the NASDAQ ending sharply higher after Twitter agreed to be bought by billionaire Elon Musk, sparking a late-day rally in growth stocks. Twitter ended up 5.6% after announcing it would be bought by Musk in a deal that will shift control of the social media giant to the world's richest person.

The S&P 500 traded in negative territory for much of the session but extended gains after Twitter's announcement. The S&P 500 growth index ended up over 1%, also bouncing back from an earlier decline. Earlier, uncertainty reverberated across world markets, with Chinese shares marking their biggest slump since a pandemic-led selling in February 2020 and European stocks falling to their lowest in over a month on fears of strict restrictions in China. 

Economic Calendar

Traders are pricing in big moves by the Fed this year to control inflation after a series of hawkish remarks from policymakers. Fed Chair Jerome Powell last week gave a "go" sign to a half-point rate hike in May.

Dow Jones Industrial Average

The Dow Jones Industrial Average rose 0.70%. The best performers of the session on the Dow Jones Industrial Average were Johnson & Johnson, which rose 2.46% or 4.47 points to trade at 186.01 at the close. Meanwhile, Microsoft Corporation added 2.44% or 6.69 points to end at 280.72 and American Express Company was up 1.97% or 3.56 points to 184.10 in late trade. The worst performers of the session were Verizon Communications Inc., which fell 3.14% or 1.63 points to trade at 50.28 at the close. Chevron Corp declined 2.15% or 3.46 points to end at 157.49 and Nike Inc. was down 0.88% or 1.13 points to 127.94.

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NASDAQ 100

The NASDAQ index climbed 1.29%. The top performers on the NASDAQ Composite were Nkarta Inc. which rose 140.93% to 18.72, Rubius Therapeutics Inc. which was up 40.60% to settle at 1.87 and Erytech Pharma SA ADR which gained 37.70% to close at 1.68. The worst performers were Clarus Therapeutics Holdings Inc. which was down 56.17% to 0.79 in late trade, Eliem Therapeutics Inc. which lost 55.76% to settle at 2.88 and Toughbuilt Industries Inc. which was down 44.87% to 14.57 at the close.

Oil price - Crude Oil market, Brent Oil market

Oil prices fell today as China's capital Beijing expanded its COVID mass testing, heightening demand concerns and outweighing the prospect of supply disruptions. U.S West Texas Intermediate contracts were down 82 cents, or 0.8%, at $97.72 per barrel. China's capital Beijing has expanded its COVID-19 mass testing from one district this week to most of the city of nearly 22 million, as the population braced for an imminent lockdown similar to Shanghai's stringent curbs. 

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China is the world's largest crude oil importer. The prospect of supply tightness in the physical market related to the phasing out of Russian oil capped the fall in prices. The parliamentary parties of Germany's ruling coalition have called on the government to push ahead with a plan to phase out Russian oil and gas imports "as soon as possible". But analysts said that the release of oil from emergency reserves has eased concerns of tight supply. Focus has shifted towards the demand side of the equation.

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

Gold was up today morning in Asia, rallying from the near one-month low hit during the previous session. A slight pullback in the U.S dollar and lower Treasury yields also gave the yellow metal a boost. Gold futures were up 0.66% to $1,671.75. The dollar, which normally moves inversely to gold, was down on Tuesday but remained near the two-year high hit during the previous session. 

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Benchmark U.S. 10-year Treasury yields also eased. Some tentative support has appeared in Asia as China eased foreign currency reserves for local banks and set a neutral USD/CNY fix to support the yuan. The People’s Bank of China said it would step up monetary policy support to the real economy, especially to small firms hit by the COVID-19 pandemic, in response to a media question seeking comment on swings in the financial markets. 

The central bank also cut the amount of money that banks need to have in reserve for their foreign currency holdings yesterday. Elsewhere in the Asia Pacific, the Bank of Japan will hand down its monetary policy decision on Thursday. The European Central Bank will also publish its economic bulletin on the same day. Meanwhile, the war in Ukraine precipitated by the Russian invasion on Feb. 24 continues. While it warned that the risks of a nuclear war should not be underestimated, Russia said that it wanted to reduce those risks. 

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Conventional Western weapons were legitimate targets in Ukraine, where battles continue in the east. In other precious metals, silver rose 1%, platinum gained 0.6%, and palladium jumped 2.1% to $2,189.18. Palladium recovered from a drop of almost 13% yesterday, with concerns that further COVID-19 lockdowns in key consumer China will reduce demand contributing to the fall. Like gold, the recovery in palladium looks fragile.

Traditional Agricultures - Corn futures, Wheat futures,  Soybean futures

Wheat futures rose today as a decline in U.S winter crop conditions heightened concerns over global supplies, which have already been hit by Russia's invasion of Ukraine. Corn rose for a second straight session as a slow start to U.S planting underpinned prices. Weekend rainfall, forecast and realized, was not enough to make a difference to the outlook for troubled crops.

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