Tuesday, March 15, 2022

DJIA: 33,544.34, up 599.10
S&P 500: 4,262.45, up 89.34
Nasdaq: 12,948.62, up 367.40

Stocks rally; oil sinks below $100/barrel

U.S. stocks finished firmly higher on Tuesday as concerns surrounding persistent price pressures were somewhat alleviated by an in-line inflation reading and another drop in oil prices. West Texas Intermediate crude retreated 7.4% to $95.40/barrel, closing below $100/barrel for the first time since February 28, as the latest wave of the pandemic in China dampened the outlook for energy demand from the world’s second-largest economy. Signs that Iran nuclear talks could resume also provided a headwind to oil prices. The Dow climbed 599 points, while the S&P 500 jumped 2.1%. The Nasdaq Composite rallied 2.9%, clawing out of bear market territory (defined as a 20% drawdown from a recent peak).

On the data front, the Producer Price Index (PPI) increased 10% year-over-year in February, matching consensus estimates and January’s annual gain. Core PPI (excluding food and energy) jumped a smaller-than-anticipated 8.4% year-over-year during the month. Elsewhere, the empire manufacturing survey unexpectedly dropped to -11.8 in March, the lowest reading since May 2020. Meanwhile, the Federal Reserve is widely anticipated to raise its benchmark rate for the first time since 2018 at the conclusion of their two-day policy meeting tomorrow. Treasuries were mixed, with the yield on the 10-year note up one basis point (0.01%) to 2.15%, its highest level since May 2019.

Ten of 11 S&P 500 sectors are trading in positive territory, with Energy the lone laggard. Technology and Consumer Discretionary shares outperformed, as growth-related shares rebounded. Airline operators were also among the standouts, benefitting from a slide in oil prices and positive commentary from some of the largest U.S. carriers.
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