Mixed day on the stock markets

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Europe in the red, US stocks climb

It’s a mixed day in the markets as European indices slip a bit into the red, while Wall Street enjoys returns of over 1% on Tuesday.

US equities are managing decent gains even as yields continue to climb and traders are forced to consider the possibility of 75 basis point increases, the likes of which have not been seen in nearly three decades.

This was indicated by James Bullard, although he himself – one of the most hawkish members of the FOMC – admitted that this was not his base case at the moment. However, the prospect of an even more aggressive tightening does not please investors, despite the resilience they have shown in recent months.

The past few months have been turbulent for equity markets, with investors facing the prospect of higher inflation, faster rate hikes, weaker growth and a protracted war in Ukraine. And yet, as we navigate the early stages of the first quarter earnings season, we continue to see the kind of resilience we often associate with equity markets, especially those in the United States.

And it comes as organizations like the IMF and World Bank cut growth and raise inflation forecasts for this year and next. Understandably, some countries are faring worse than others, with the situation in the UK looking particularly grim.

And as Russia steps up its attacks and the talks appear to have hit a brick wall, the prospect of a ceasefire agreement looks increasingly unlikely anytime soon. This should keep commodity prices high and fuel further inflation and interest rate fears. The cost of living crisis will only get worse, it seems.

This article is for general information purposes only. It is not investment advice or a solution for buying or selling securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for everyone. You could lose all your deposited funds.

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