US Stock Indices
US stock indices swung up and down on Tuesday as traders reacted to remarks from Federal Reserve Chair Jerome Powell, his first since the job market's surprisingly strong showing on Friday.
Stocks started Tuesday morning lower but gained ground shortly after Mr. Powell began speaking in a broadcast conversation with Carlyle co-founder David Rubenstein. A flurry of selling then sent indices back into the red, but they returned to positive territory later in the afternoon.
The S&P 500 closed 1.3% higher and the Nasdaq Composite added 1.9%. The Dow Jones Industrial Average rose 0.8%. Each is up slightly so far this week.
In commodity markets, Brent crude oil gained 3.53% to $US83.85 after devastating earthquakes in Turkey and Syria on Monday closed a key export terminal. Gold edged 0.07% higher to US$1,868.79.
Australian government bonds rose, with the 2 Year yield edging up to 3.22% and the 10 Year yield reaching 3.59%. In the US, Treasury notes gained with the 2 Year yield climbing to 4.47% and the 10 Year yield increasing to 3.68%.
The Australian dollar rose to 69.39 US cents from its previous close of 68.81. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, edged down to 96.27.
Asia
Chinese shares ended broadly higher as investor sentiment was buoyed by supportive measures for the property market. Property stocks led the gains after several major Chinese cities relaxed norms related to real estate purchases. Poly Developments & Holdings Group rose 1.7% and China Vanke added 1.6%. Some AI-related stocks rallied after Baidu confirmed that it will launch an artificial intelligence chat bot in March. Telecom and travel stocks weighed, with China Mobile falling 2.0% and BTG Hotels (Group) declining 2.9%. The Shanghai Composite Index closed 0.3% higher at 3248.40, the Shenzhen Composite Index rose by 0.4% and the ChiNext Price Index ended 0.2% lower.
Hong Kong stocks ended the session higher, recovering some ground after a broad selloff in Asian equities on Monday. The benchmark Hang Seng Index rose 0.4% to settle at 21298.70. Chinese internet giant Baidu led gains with a 15% surge. A variety of other sectors tracked upward too, with jewelry maker Chow Tai Fook rising 2.3% and developer Country Garden up by 2.2%.
Japan's Nikkei Stock Average ended flat at 27685.47, amid speculation that Masayoshi Amamiya had been nominated as the next Bank of Japan Governor. Financial stocks advanced with Sumitomo Mitsui Financial Group rising 2.1%, Mitsubishi UFJ Financial Group 3.2% higher and Japan Post Bank up 1.0%. Steelmaker JFE Holdings fell 8.5% after it lowered its FY earnings guidance on weaker demand. Mitsubishi Chemical added 0.6%.
Indian stocks ended lower, extending Monday's losses as the market continued to pull back from a recent rally. The benchmark Sensex index fell by 0.4% to settle at 60286.04. Declines were broad-based. Tata Steel led losses, slumping 5.2%. Drug developer Sun Pharmaceutical Industries and auto maker Maruti Suzuki India shed 1.7% each, while IT-services provider HCL Technologies was 1.6% lower.
Europe
European stocks closed mixed as investors awaited remarks from Federal Reserve Chairman Jerome Powell. The pan-European Stoxx Europe 600 rose 0.2%, the German DAX fell 0.2% and the French CAC 40 dropped 0.1%.
"Powell looks to ensure market sentiment remains heavily central bank focused, with today's scheduled appearance at the Economic Club of Washington raising uncertainty for traders," IG analyst Joshua Mahony wrote. "With the Federal Reserve looking to remain data dependent, traders are faced with a swift opportunity to see how Friday's bumper US jobs report and services sector rebound impact the outlook going forward."
In the UK, the FTSE 100 index closed 0.4% higher, spurred by a strong performance from oil and gas stocks. The property and financial sectors suffered losses. BP posted record profit of $27.7 billion for 2022 and raised its dividend, and Shell's shares experienced decent gains on the back of these numbers as well as a rebound in oil prices, CMC Markets analyst Michael Hewson said in a note. BP was the session's biggest riser, up 8%, followed by Airtel Africa, up 3.2% and BT Group, up 2.6%. Pearson, Melrose Industries and Compass Group were the day's biggest fallers, down 2.8%, 2.6% and 2.3% respectively.
North America
US stock indices swung up and down on Tuesday as traders reacted to remarks from Federal Reserve Chair Jerome Powell, his first since the job market's surprisingly strong showing on Friday.
Stocks started Tuesday morning lower but gained ground shortly after Mr. Powell began speaking in a broadcast conversation with Carlyle co-founder David Rubenstein. A flurry of selling then sent indices back into the red, but they returned to positive territory later in the afternoon.
The S&P 500 closed 1.3% higher and the Nasdaq Composite added 1.9%. The Dow Jones Industrial Average rose 0.8%. Each is up slightly so far this week.
The ricochets up and down were evidence that tactical trading considerations -- not the substance of Mr. Powell's remarks -- were driving Wall Street's reaction, said David Bahnsen, chief investment officer at The Bahnsen Group.
"I really thought his messaging was shockingly consistent with what he said last week," Mr. Bahnsen said. "The market move is clearly and obviously related to people who tried to front-run his remarks having to cover their positions."
Bets in fed-funds futures markets show that traders are still firmly convinced that another quarter-percentage-point interest rate rise will likely be the Fed's next move when central bankers convene in March, according to CME Group's tracker.
In the longer run, Wall Street has grown optimistic that the Fed is approaching the end of its most aggressive series of interest rate increases since the 1980s. But Friday's stronger-than-expected jobs data had raised questions about whether the Fed will need to raise rates more, or keep them higher for longer, to temper inflation.
Some investment shops warn it is still too early to celebrate the Fed's victory over rising prices.
"I think the Fed will have to retain a restrictive stance with rates. The labor market is too strong and that will continue to feed wage and services inflation," said Dan Boardman-Weston, chief executive at BRI Wealth Management.
That sentiment has threatened to puncture a market rally that in recent weeks drove up riskier assets, from high-yield bonds and the tech-heavy Nasdaq to bitcoin and shares in companies like the used-car seller Carvana.
A decline in quarterly earnings reported Tuesday morning by Carrier Global, a maker of heating and air-conditioning equipment, sent the stock down 3.6%. Chemicals giant DuPont, on the other hand, gained 6.9% after posting a better-than-expected adjusted profit.
Shares of Bed Bath & Beyond fell 48% after the beleaguered retailer gained financial breathing room by reaching a deal to sell additional equity, diluting existing shareholders' stakes.
