U.S. stock indices ended Tuesday with mixed results as oil prices retreated sharply, with investors awaiting inflation data scheduled for release before Wednesday's market open. The Dow Jones Industrial Average declined by 34.29 points, or 0.07%, closing at 47,706.51. The Nasdaq Composite edged up 1.16 points, or 0.01%, to finish at 22,697.10, while the S&P 500 dropped 14.49 points, or 0.21%, settling at 6,781.50. Chinese equities listed in the U.S. broadly advanced, with the Golden Dragon Index climbing 1.96%. Nio Inc. surged 15%, XPeng Inc. rose 2.28%, and Alibaba Group Holding Ltd. gained 3.17%.
In European trading, Germany's DAX 30 index jumped 574.56 points, or 2.46%, to close at 23,968.94. The UK's FTSE 100 increased by 163.79 points, or 1.60%, ending at 10,413.31. France's CAC 40 advanced 142.00 points, or 1.79%, finishing at 8,057.36. The Euro Stoxx 50 rose 156.35 points, or 2.75%, to 5,841.55. Spain's IBEX 35 climbed 492.16 points, or 2.90%, settling at 17,436.76, and Italy's FTSE MIB gained 1,190.54 points, or 2.70%, closing at 45,215.50.
Asian markets also posted gains: Japan's Nikkei 225 rose 2.88%, South Korea's KOSPI advanced 5.35%, and Indonesia's Jakarta Composite Index increased 1.41%.
In cryptocurrency markets, Bitcoin rose over 1.7% to $69,835, while Ethereum gained over 1.4% to $2,031.20.
Oil prices experienced significant declines. The April West Texas Intermediate crude futures contract fell $11.32 to settle at $83.45 per barrel, a drop of 11.94%. The May Brent crude futures contract decreased by $11.16 to close at $87.80 per barrel, down 11.28%.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, fell 0.36% to 98.823. By the close of New York forex trading, one euro traded at $1.1644, up from $1.1578 in the previous session. The British pound rose to $1.3460 from $1.3388. The dollar bought 157.63 Japanese yen, down from 158.33, and traded at 0.7770 Swiss francs, compared to 0.7799 previously. Against the Canadian dollar, the U.S. currency settled at 1.3570, down from 1.3591, and declined to 9.1371 Swedish krona from 9.2100.
Precious metals saw gains with spot gold closing at $5,192.84 per ounce and spot silver finishing at $88.288 per ounce.
House Speaker Johnson downplayed concerns about gasoline prices, describing them as "temporary fluctuations" that would resolve quickly following military operations. When questioned about the potential for prices exceeding $5 per gallon, Johnson dismissed such worries, emphasizing that the military action was carefully designed with limited scope and nearing completion. He attributed most of the price increase to the temporary closure of the Strait of Hormuz, predicting its reopening within weeks would lead to price normalization.
Bank of America suggested that a sustained oil price shock could create conditions for more accommodative Federal Reserve policy. The bank noted that while markets currently view rising oil prices as an inflation threat, supply shocks actually pose risks to both aspects of the Fed's dual mandate. The analysis indicated that monetary policy typically tightens only when consumer demand is strong enough to withstand supply shocks, as occurred during the 2022 Russia-Ukraine conflict. However, current conditions differ with slower job growth, moderately elevated inflation, and more limited fiscal stimulus compared to that period.
A $33 billion credit fund faced redemption requests exceeding 7%. Sources indicated that Cliffwater's flagship private credit fund, which manages approximately $33 billion in assets as an interval fund, might receive redemption requests surpassing 7%. The firm had not yet decided whether to impose limits if redemptions reached 5% or 7%. This development follows similar investor withdrawals from other private credit firms, including Blackstone and BlackRock, amid concerns about loan quality and exposure to software companies potentially affected by artificial intelligence, hinting at emerging liquidity pressures in the $1.8 trillion private credit market.
U.S. existing home sales unexpectedly increased in February, with improved affordability driving demand. The National Association of Realtors reported that contract closings rose 1.7% to an annual rate of 4.09 million units, exceeding expectations. The improvement stemmed from lower mortgage rates and modest price increases. The association's housing affordability index reached its most favorable level since 2022. The median existing-home price increased 0.3% annually to $398,000, representing one of the smallest gains since the pandemic-driven housing boom. Inventory rose 4.9% year-over-year to 1.29 million units, the highest February level since 2020.
Boeing announced delays in deliveries of some 737 MAX aircraft due to wiring issues. The company identified scratching on wires in undelivered planes, traced to a machining error. While repairs might take only days per aircraft, the delay could affect overall delivery pace for the month. Boeing maintained its target of delivering approximately 500737 MAX aircraft this year. The company delivered 43 narrow-body 737s in February, contributing to a total of 51 aircraft deliveries for the month, the highest February figure since 2017.
The Pentagon is implementing Google's AI agents to automate routine non-classified tasks. A senior defense official stated that Google is deploying Gemini AI agents for approximately 3 million Defense Department personnel. Initially operating on unclassified networks, the agents can perform tasks independently after being assigned by users. Discussions are underway regarding deployment on classified cloud platforms. This collaboration follows previous internal criticism at Google over Project Maven, which involved using AI to analyze drone footage, ultimately leading the company not to renew that contract.
Nvidia is increasing its investment in Thinking Machines Lab, providing AI chips to support training and running the startup's AI models. Founded by former OpenAI executive Mira Murati, Thinking Machines will use Nvidia's upcoming Vera Rubin AI accelerators under a multi-year agreement. The chips, expected to be deployed early next year, will provide at least 1 gigawatt of computing capacity. Terms of the investment were not disclosed, described only as "significant."
A new coalition including Google and Tesla aims to reduce electricity costs by utilizing underused grid capacity. The group, named Utilize, plans to work with state legislators, regulators, and utilities to address energy affordability issues exacerbated by rising demand from AI data centers and other sources. The coalition intends to release a study showing potential consumer savings of up to $180 billion over the next decade through system improvements. Other members include Carrier, Sparkfund, SPAN, and Verrus.
Amazon returned to the bond market with plans to issue up to 11 tranches of bonds maturing in periods ranging from 2 to 50 years. The longest-dated portion, maturing in 2076, was initially priced to yield approximately 1.55 percentage points above Treasury rates. HSBC Holdings, Citigroup, Goldman Sachs, and JPMorgan Chase are managing the offering. This issuance represents the latest in a series of substantial bond sales by major cloud computing companies preparing to invest trillions in AI infrastructure, with investor demand remaining robust as recent offerings have been multiple times oversubscribed.
Comments