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Market Snapshot: S&P 500 logs best day since June 2020 as stocks surge, oil retreats and investors await Ukraine-Russia talks

U.S. stock indexes finished sharply higher Wednesday, as oil prices pulled back from the highest level in more than seven years and investors looked forward to a meeting between top Russian and Ukrainian diplomats to potentially calm the deadly conflict, even as fierce fighting continued.

What happened

The Dow Jones Industrial Average
DJIA,
+2.00%

rose 653.61 points, or 2%, to end at 33,286.25.

The S&P 500
SPX,
+2.57%

gained 2.6%, or 107.18 points, finishing at 4,277.88, its best daily percentage gain since June 5, 2020, according to Dow Jones Market Data.

The Nasdaq Composite Index
COMP,
+3.59%

advanced 3.6%, or 459.99 points, closing at 13,255.55, its best daily percentage gain since March 9, 2021.

On Tuesday, the Dow fell 185 points, or 0.56%, to 32,633, the S&P 500 declined 30 points, or 0.72%, to 4,171, and the Nasdaq Composite dropped 35 points, or 0.28%, to 12,796.

The S&P 500 had dropped nearly 5% over the last four sessions.

What drove markets

U.S. markets staged a powerful rally, joining the rest of global equities, as oil prices tumbled and investors monitored the latest developments in Eastern Europe.

Wednesday’s uptrend came ahead of a meeting between Russia’s and Ukraine’s foreign ministers in Turkey, as Reuters reported, with analysts looking for an apparent thawing of positions. Ukraine President Volodymyr Zelensky said he is no longer pressing for NATO membership, one of Russia’s stated reasons for its invasion. Reports also have indicated that Zelensky is ready for a diplomatic solution to the hostilities sparked by Moscow’s unprovoked invasion of Kyiv.

“Volatility is still with us, but in a green way today,” said James Ragan, director of wealth management research at D.A. Davidson & Co. “Day-to-day it can change. But you definitely have a tone that maybe there is a diplomatic solution. Obviously, there likely is a long way to go before that happens, but maybe there’s an inkling that it’s not going to get worse everyday.”

Also on Wednesday, U.S. lawmakers unveiled a new bill that would fund the federal government for the remainder of the fiscal year, as well as provide further aid for Ukraine. At that last minute, more money for COVID-19 relief was scrapped.

The German DAX
DAX,
+7.92%

and French CAC 40
PX1,
+7.13%

each surged, finishing up 7.9% and 7.1%, respectively on Wednesday.

Oil futures
CL.1,
-11.02%

slipped 12%, with the global benchmark
BRNK22,
+1.26%

down over 13% to $111 a barrel, a day after President Joe Biden announced a ban on Russian oil and gas imports, and as major brands including McDonald’s
MCD,
-0.14%

and Coca-Cola
KO,
+0.51%

added to the list of companies planning to exit Russia.

A pullback in commodity prices on Wednesday likely helped to improve the market tone, even as the Ukraine’s government banned the export of wheat, oats and other key staples to global food supplies in a bid to ensure the national can feed its people during Russia’s intensifying war.

“Some of the near-term fears haven’t gone away, but subsided,” Ragan said.

The surge in commodity prices resulting from the war in Ukraine threatens to push inflation higher in Europe and the U.S., in particular, raising the possibility of slower economic growth or even recession. Some banks have raised their inflation forecasts, lowered growth outlooks and considered the possibility of stagflation.

Read: USDA says Russia’s actions raise uncertainty for agricultural supply, cuts world wheat export estimate

In economic reports, U.S. job openings fell slightly in January to 11.3 million after setting a record at the end of 2021, but millions of workers continue to quit each month in what has become known as the “Great Resignation.”

The number of open positions slipped from a revised 11.5 million December, the Labor Department said Wednesday.

The jobs data comes ahead of Thursday’s February consumer-price index and a European Central Bank policy update, which could prove pivotal for investors.

Which companies were in focus?

Amazon.com Inc.
AMZN,
+2.40%

shares were in focus following a report that a U.S. congressional committee asked the Justice Department to investigate it and some executives for potential criminal obstruction of Congress. Shares rose 2.4%.

Papa John’s International Inc. PZZA said Wednesday it has suspended all of its corporate operations in Russia, as the pizza restaurant chain condemns Russia’s invasion of Ukraine. Its stock gained 4.5%.

Shares of General Electric Co. GE rallied 3.5% to extend their bounce off at 14-month low, after the industrial conglomerate disclosed a new $3 billion stock repurchase program.

Stitch Fix shares
SFIX,
-6.09%

shed 6.1% after the online apparel retailer chopped its financial forecasts for the full year, saying revenue may decline.

Shares of Bumble Inc.
BMBL,
+41.90%

surged about 42% after the online-dating company posted upbeat user-growth figures Tuesday evening. Bumble said it added 1.64 million paying users in the fourth quarter, up from 1.27 million a year prior, exceeding the FactSet consensus estimates.

How did other assets fare?

The yield on the 10-year Treasury note jumped 7.6 basis points to 1.946%, after the benchmark climbed to highs not reached since Feb. 25 based on levels at 3 p.m. Eastern Time. Yields and debt prices move opposite each other.

The ICE U.S. Dollar Index DXY, a measure of the currency against a basket of six major rivals, was down around 1.1%.

Gold futures for April delivery GCJ22 declined 2.7% to settle below $2,000 an ounce, booking its first loss in 5 sessions.

Bitcoin BTCUSD advanced about 8.8% to top $41,900 after President Joe Biden signed an executive order to explore regulation and use cases for crypto, which was viewed as constructive for the sector.

In European equities, the Stoxx Europe 600
SXXP,
+4.68%

closed 4.7% higher while London’s FTSE 100 UKX climbed 3.3%.

In Asia, the Shanghai Composite SHCOMP dropped 1.1%, while the Hang Seng Index HSI slipped 0.7% and Japan’s Nikkei 225 NIK retreated 0.3%.

Steve Goldstein contributed to this article

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