Monday, March 21, 2022

DJIA: 34,552.99, down 201.94
S&P 500: 4,461.18, down 1.94
Nasdaq: 13,838.46, down 55.38

Stocks end lower after hawkish Fed comments

U.S. equities finished lower on Monday, reversing earlier gains following perceived hawkish commentary from Federal Reserve (Fed) Chair Jerome Powell. The Fed chief said policymakers could raise benchmark rates by a more-aggressive 0.50% at future meetings to combat high inflation, if appropriate. The S&P 500 finished just below the flat line, while the Nasdaq Composite slipped 0.4%, with both indexes snapping a four-day rally which had capped their best weekly performance since November 2020 on Friday. The Dow fell 201 points on the heels of its first weekly advance (+5.5%) in six weeks.

Treasuries resumed their recent sell-off, with the yield curve flattening. The yield on the benchmark 10-year note jumped 14 basis points (0.14%) to 2.30%, while the more Fed-sensitive two-year note yield spiked 18 basis points (0.18%) to 2.12%, with each maturity yield trading near their highest levels since May 2019. In commodities, West Texas Intermediate crude rose 7.4% to $112.47/barrel after the European Union said it would deliberate an oil embargo on Russia as the war in Ukraine extends into a fourth week.

Six of 11 S&P 500 sectors finished in negative territory. The Energy group notably outperformed, jumping 3.8%. In corporate news, Boeing Co. fell 3.6% following reports one of its 737 passenger planes operated by China Eastern Airlines crashed in southern China. Elsewhere, Alleghany Corp. surged 24.8% after agreeing to be acquired by Berkshire Hathaway for $11.6 billion in cash. Nielsen Holdings Plc. slid 7.4% after rejecting a $9.1 billion takeover bid from a consortium of private equity firms.

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