NEW YORK, RAW – Wall Street has ended sharply higher as signs of de-escalating tensions along the Russia-Ukraine border fuelled a risk-on session.
All three major indices notched solid advances on Tuesday, with market-leading tech and tech-adjacent stocks providing the biggest boost and putting the Nasdaq out front.
Geopolitical heat was turned down a notch after Russia said it had withdrawn some of its troops near the Ukraine border, prompting bullish equities sentiment and causing crude prices to slide on easing supply concerns.
The announcement received guarded responses, and the United States and NATO said they had yet to see evidence of a drawdown.
Stocks briefly pared gains slightly late in the session, when US President Joe Biden said that while diplomatic efforts were ongoing.
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“Nice rally today, thanks to (Russian President Vladimir) Putin,” said David Carter, managing director at Wealthspire Advisors in New York.
“Markets have been moving based on Putin or (Federal Reserve chairman Jerome) Powell,” Carter said. “Putin and his intentions with Ukraine and Powell and his intentions regarding interest rates.”
The CBOE market volatility index backed down from a three-week high.
On the economic front, a report from the Labor Department showed producer prices surged in January at twice the expected rate, reinforcing economist expectations that the Federal Reserve will take on stubbornly persistent inflation by aggressively hiking key interest rates.
“Inflation data suggests prices are rising, but markets already knew this,” Carter said.
The market has now priced in better than even odds that the central bank will raise the Fed funds target rate by 50 basis points at its March monetary policy meeting.
The Dow Jones Industrial Average rose 422.67 points, or 1.22 per cent, to 34,988.84, the S&P 500 gained 69.4 points, or 1.58 per cent, to 4,471.07 and the Nasdaq Composite added 348.84 points, or 2.53 per cent, to 14,139.76.
Nine of the 11 major sectors in the S&P 500 closed green, with tech shares enjoying the largest percentage gain, jumping 2.7 per cent. Energy stocks, weighed by sliding crude prices , fell 1.4 per cent.
Fourth quarter reporting season is entering its last stretch, with 370 of the companies in the S&P 500 having reported. Of those, 78.1 per cent have beaten analyst estimates, according to preliminary Refinitiv data.
The Philadelphia SE Semiconductor index surged following Intel Corp’s announcement of a $US5.4 billion deal to buy Israeli chipmaker Tower Semiconductor.
Restaurant Brands International rose after the fast food operator beat quarterly profit and revenue estimates.
Hotelier Marriott International also beat Street expectations due to rising occupancy rates, sending its shares sharply higher.
Other travel-related companies advanced, with the S&P 1500 airlines index and hotels/restaurants/leisure index gaining ground.
Shares of cloud infrastructure company Arista Networks jumped after forecasting better-than-anticipated current quarter revenue.