Text size
Getty Images
The stock market fell Wednesday as markets digest Tuesday’s big rally. Increased sanctions on Russia and military efforts from allied nations haven’t exactly helped.
Dow Jones Industrial Average
fell 236 points, or 0.7%, while the
S&P 500
dropped 0.6% and the Nasdaq Composite declined 0.8%.
“Short-term, the market is due for a pause,” wrote Frank Cappelleri, chief market technician at Instinet.
The market’s dip comes after stocks rallied on Tuesday, bringing the major indexes to impressive gains from their recent lows. The S&P 500, heading into the open on Wednesday, is up more than 8% from its March 8 closing low of the year. The buying has come even as the Federal Reserve has made clear it will lift interest rates many times in the next couple of years to fight inflation. That has sent the 2-year Treasury yield up to 2.13% from 1.87% just before the Fed laid out its projected rate-hiking path last week. Higher rates would drag economic growth lower, perhaps into recession.
“The big question now is whether all this prospective Fed tightening will push the economy into recession or whether policymakers can achieve the much sought-after “soft landing” that avoids one,” writes Deutsche Bank strategist Jim Reid.
Wednesday, Secretary-General of the North Atlantic Treaty Organization Jens Stoltenberg said more troops will be sent to the alliance’s eastern flank in response to Russia’s ongoing aggression.
Tuesday evening, news broke that the White House is preparing sanctions on members of Russia’s lower house of parliament, Duma. This comes as fighting in Ukraine continues. President Joe Biden and NATO allies are expected to announce additional sanctions on Russia when they meet in Brussels this week.
The pressing fear is further sanctions on Russian commodities, which would restrict the global supply and lift prices, creating even more burdensome inflation for consumers to deal with. The Bloomberg Commodity Index is up 29% for the year, though it’s down from its March 8 peak, a welcomed site for stock investors.
While concerns around the Russia situation weren’t helping the broader stock market, defense stocks were gaining.
Raytheon Technologies
(ticker: RTX) gained 1%, while
Lockheed Martin
(LMT) rose 1.1%, and
Northrop Grumman
(NOC) advanced 0.7%.
Here are some stocks on the move Wednesday:
GameStop
(GME) had gained 11% Wednesday after Chairman Ryan Cohen snapped up 100,000 more shares in the meme stock, taking his holding up to 11.9%.
Adobe
(ADBE) had fallen 7% after the software company reported better-than-expected earnings but provided an outlook for the current quarter that fell short of Wall Street estimates.
Tesla
(TSLA) rose 2.4%. The stock jumped 7.9% on Tuesday after the electric-vehicle giant opened its first European car factory in Germany.
T-Mobile US
(TMUS) stock gained 0.3% after getting upgraded to Overweight from Sector Weight at KeyBanc Capital Markets.
BP PLC
(BP) stock rose 3% after getting upgraded to Overweight from Equal Weight at Morgan Stanley.
Write to Joe Woelfel at joseph.woelfel@barrons.com
Read More: Stocks Slip, Bond Yields Rise, and Oil Jumps
