Wednesday, March 23, 2022

DJIA: 34,358.50, down 448.96
S&P 500: 4,456.24, down 55.37
Nasdaq: 13,922.61, down 186.21

Stocks, yields slip; oil resumes ascent

U.S. stocks finished near session lows on Wednesday, with equities taking a breather from their recent rebound as oil prices resumed their ascent. West Texas Intermediate crude climbed 4.7% to $114.39/barrel amid the expectation that the U.S. and its allies would announce fresh sanctions against Russia. The Dow lost 448 points, while the Nasdaq Composite fell 1.3%. The S&P 500 shed 1.2%, but remains within 7.1% of its January 3 record high. The broad benchmark had recovered roughly half of its losses since January over the prior six sessions, nearly doubling from its pandemic-induced bottom touched on this day two years ago.

Treasuries recouped some of their recent decline, with the yield on the 10-year note down nine basis points (0.09%) to 2.29%. However, the benchmark yield touched 2.41% during intraday trading, its highest level since May 2019, while an index of Treasuries is positioned for its worst quarterly performance since at least 1973. Bonds have been pressured amid a chorus of hawkish Federal Reserve commentary, with numerous officials voicing support for a more aggressive pace of monetary policy tightening to combat inflation.

Nine of 11 S&P 500 sectors closed in negative territory, with Energy and Utilities bucking the downtrend. Financials and Health Care led the decline, while homebuilders also lagged following weaker-than-expected data and worries around rising mortgage rates. On the data front, new home sales unexpectedly fell 2% in February after slumping 8.4% in January. In earnings, Adobe Inc. dropped 9.5% as a disappointing forecast overshadowed otherwise positive results.
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