* Risk appetite picked up, with U.S. stock banks and technology sectors rising ahead;
* Biden issued an executive order for the supervision of digital currency;
* Ukraine says it is ready to negotiate neutrality with Russia.
U.S. stocks rebounded strongly on Wednesday, with investors expecting a easing of relations between Russia and Ukraine and cooling commodity prices boosting sentiment. As of the close, the Dow was up 653.61 points, or 2.0 percent, at 33,286.25 points, the Nasdaq was up 3.59 percent at 13,255.55 points, and the S&P 500 was up 2.57 percent at 4,277.88 points.
European stocks surged across the board, with the Pan-European Stoxx 600 closing up 4.7 percent, its biggest gain since March 2020, the UK FTSE 100 up 3.4 per cent, the German DAX 30 and the French CAC 40 up more than 7 per cent.
On the market front, benchmark 10-year Treasury yields rose about 5 basis points to 1.93 percent, boosting the banking sector by nearly 4 percent. Bank of America rose 6.4 percent, Wells Fargo rose 5.8 percent and Goldman Sachs rose 3.8 percent.
The energy sector was weighed on lower oil prices, with ExxonMobil down 5.7 percent, Chevron down 2.5 percent and ConocoPhillips down 2.6 percent.
GeV rose 3.5 percent as the company approved a $3 billion share repurchase program as one of a range of potential capital allocation options to build three global investment-grade companies.
Google and Netflix rose more than 5 percent, Microsoft rose 4.6 percent, Meta rose 4.3 percent, Apple rose 3.5 percent, and Amazon rose 2.4 percent.
International oil prices fell back at a high level, cloth oil fell 13%
International oil prices fell back from a 14-year high and accelerated their decline after midday. The WTI crude near-month contract fell 12.1 percent to close at $108.70 a barrel, its worst one-day performance since Nov. 26, while brent crude fell 13 percent to close at $111.10 a barrel, its biggest one-day decline since April 2020.
On the news side, there are signs that the United States is making progress in encouraging other oil producers to increase production. U.S. Secretary of State Blinken said the UAE would support OPEC+ to increase production. There are reports that Iraq said it could increase production if OPEC+ asks for it. The news was subsequently clarified, with Iraq's oil minister saying that OPEC+ did not need to increase production at a rate faster than planned, and further production increases could hurt the market.
Risk appetite weighed on gold prices, with COMEX gold futures for April delivery on the New York Mercantile Exchange falling $55.10, or 2.7 percent, to close at $1,988.20 an ounce.
Ed Moya, senior market strategist at Oanda, said: "Commodities have been hit hard after the news of Ukraine's preparation for compromise came out. While it is still early to end the conflict, it is the first real sign of a major downgrade in the Ukraine conflict, which means that commodity prices may return to reality. ”
The Russian and Ukrainian foreign ministers will face a decline in commodities across the board
According to CCTV, on the 9th local time, Russian Foreign Minister Lavrov and the Russian delegation arrived in Antalya, Turkey, and Ukrainian Foreign Minister Kureba will also arrive in the evening of the same day. On the 10th, Turkish Foreign Minister Cavushlălu, Russian Foreign Minister Lavrov and Ukrainian Foreign Minister Kureba will hold trilateral talks in Antalya. This is the first direct contact between the Russian and Ukrainian high-level levels since Russia launched a special military operation on February 24.
Before the dialogue, the attitude of the two sides softened somewhat. Earlier in the day, Russian Foreign Ministry spokeswoman Zakharova said talks with Kiev officials on a resolution of the Russian-Ukrainian conflict were "making some progress" and stressed that Russian troops were not committed to "overthrowing the Ukrainian government."
Earlier on Wednesday, an adviser to the head of the Ukrainian president's office said in an interview with Ukrainian media that Ukraine was ready to negotiate neutrality with Russia, but that security guarantees must be secured. A day earlier, Ukrainian President Zelenskiy said in an interview with U.S. media that Ukraine had lost interest in joining NATO and could have a dialogue with Russia on the issue of Crimea's ownership, Donetsk and Luhansk independence in eastern Ukraine.
Risk aversion has cooled, and commodity markets have retreated across the board. In industrial metals, Lunsi plunged more than 17%, Lun aluminum, Lun lead, Lun zinc fell more than 5%, Lun copper fell 2.3%, Lun nickel will resume trading on Friday. In terms of agricultural products, U.S. wheat, which has been rising for 6 consecutive days, touched the drop limit, down 6.6%, corn fell 2.7%, and soybeans fell 1.0%.
Fed rate hike next week?
U.S. President Joe Biden signed an executive order on Wednesday requiring federal agencies to conduct a broad review of its policies related to cryptocurrencies and other digital assets. This represents the first time in history that the U.S. government has taken a comprehensive approach to analyzing the benefits and analysis of digital assets and their underlying technologies. The executive order covers six key areas: consumer and investor protection, financial stability, combating illegal activities, U.S. competitiveness on the global stage, financial inclusion, and responsible innovation, and will give agencies 60 to 120 days to develop policy recommendations.
Recent commodity movements have triggered volatility in capital markets, fueling fears that soaring inflation will lead to slower economic growth. Today, the United States will release the February consumer price index CPI, and the agency predicts that the year-on-year growth rate will rise to 7.8%, a new high in nearly 40 years. White House spokesman Psaki said the administration expects the latest data to show an increase in U.S. inflation.
In response to inflationary pressures, the Fed is likely to announce the start of a new rate hike cycle next week. Baird analyst Ross Mayfield said it remains to be seen whether the Fed will achieve a soft landing, but the U.S. should be able to avoid a recession. "Overall, volatility is likely to persist and there could be a wide variety of outcomes in Ukraine, but the fundamentals of the U.S. economy still look good, especially if the Fed is able to raise interest rates without disrupting demand."
Peter Cardillo, chief market economist at Spartan Capital Securities, said: "The decline in commodities led to a rally today. It's just a profit-taking on commodity futures, and some bargain buying of stocks. Nothing has changed. We can still lower the correction again and test the lows we saw yesterday. ”
Seema Shah, chief strategist at Principal Global Investors, said in a note that investors should be prepared for further market volatility, where losses are still possible. While headlines have disrupted and distorted the basics, emerging investment trends are fundamentally based and therefore may take the coming weeks to stabilize.