The Dow & S&P 500 finish down after 4 days of gains as Russia attacks Ukraine

The Dow and S&P 500 both dipped on Wednesday, ending four-session winning streaks, on dwindling prospects of progress in peace talks between Ukraine and Russia, against a backdrop of a hawkish Federal Reserve stifling economic development.

A day after vowing to cut back operations, Russian soldiers blasted the outskirts of Kyiv and a beleaguered city in northern Ukraine. After beginning the year with two consecutive monthly drops, the S&P 500 recovered more than 5% in March. Nonetheless, the benchmark index is on course for its first quarterly fall since the first quarter of 2020, when the COVID-19 epidemic in the US was in full gear.

Stock prices have risen in response to news of talks to end Russia’s invasion of Ukraine. Commodity prices, such as gasoline and metals, have risen since the invasion, exacerbating already-high US inflation. “Ukraine is the controlling narrative for this market; if we get a settlement and the potential for lower energy prices, which is really the key, and then some sort of return to normalcy in terms of the global economy, that is a real positive for the market,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey.

The Dow Jones Industrial Average slid 65.38 points, or 0.19 percent, to 35,228.81, the S&P 500 dropped 29.15 points, or 0.63 percent, to 4,602.45, and the Nasdaq Composite plummeted 177.36 points, or 1.21 percent, to 14,442.28. As inflation rises, so does anticipation that the Federal Reserve will become more active in raising interest rates, putting a damper on economic development. With a 1.17 percent increase, the S&P energy index was the top sector on the positive side. It is up over 40% this year, which would be the best quarterly performance ever. The sector is presently one of just three that are up on the year and has well surpassed the next best performer, utilities, which are up roughly 4% on the year but finished at a record high for the fourth consecutive session.

Some investors have taken a defensive attitude in response to concerns about excessive Fed tightening and recent bond market signals, which are generally precursors to a recession. Nonetheless, economic data continue to point to a solid labour market. According to the ADP National Employment Report, private payrolls increased by 455,000 last month after increasing by 486,000 in February. Investors will be looking forward to Friday’s payrolls data. Lululemon Athletica Inc jumped 9.58 percent after anticipating full-year earnings and revenue above expectations, indicating that demand for sports gear remains robust.

Volume on US exchanges was 11.69 billion shares, compared to the 13.93 billion average for the whole session for the previous 20 trading days. On the NYSE, decliners outweighed advancers by a 1.24-to-1 ratio; on the Nasdaq, decliners outpaced advancers by a 1.98-to-1 ratio. The S&P 500 set 44 new 52-week highs and one new low, while the Nasdaq Composite set 51 new highs and 47 new lows.