Optimism About Peace Talks May Lead To Strength On Wall Street

The major U.S. index futures are currently pointing to a higher open on Tuesday, with stocks likely to add to the gains posted in the previous session.

The markets may benefit from optimism about an end to the war between Russia and Ukraine, as Turkish President Recep Tayyip Erdogan opened the latest round of peace talks between the two countries.

Russia appeared to be de-emphasizing ground operations near Kyiv and concentrating more on the Donbas region.

Buying interest may also be generated in reaction to a continued slump by the price of crude oil, with crude for May delivery tumbling $6.14 to $99.82 a barrel after plunging $7.94 to $105.96 a barrel on Monday.

U.S. stocks ended on a positive note on Monday thanks to some strong buying in the final hour, as hopes about a peace deal between Russia and Ukraine helped offset concerns about inflation and imminent monetary tightening by the Federal Reserve.

The major averages all ended higher, with the tech-heavy Nasdaq outperforming with a sharp uptick. The Dow, which slipped to 34,552.23 around noon, losing more than 300 points in the process, ended the session with a gain of 94.65 points or 0.3 percent at 34,955.89.

The S&P 500 settled with a gain of 32.46 points or 0.7 percent at 4,575.52, nearly 60 points off the session’s low of 4,517.69. The Nasdaq, which saw a brief spell in negative territory around noon, ended stronger by 185.60 points or 1.3 percent at 14,354.90.

Russia and Ukraine are set to resume diplomatic talks in Turkey on Tuesday. Russia has reportedly signaled that it may scale down its war and aims to concentrate on eastern Ukraine.

Ukraine President Zelenskyy also said he wants to make a deal with Moscow over Donbas and he is willing to discuss adopting a neutral status.

Energy stocks drifted lower, tracking weak crude oil prices. Oil prices tumbled amid concerns about the outlook for energy demand after Shanghai decided to impose fresh lockdown restrictions to curb the spread of Covid-19 infections.

Tesla Inc. shares soared more than 8 percent following an announcement from the company that it would seek investor approval for a stock split.

Apple shares drifted down in morning trading on reports the company is planning to cut iPhone and AirPod output amid a drop in demand due to high inflation. However, the stock recovered and eventually ended the day with a gain of about 0.5 percent.

Microsoft climbed more than 2 percent. Walmart, Salesforce.com, Visa, Home Depot, P&G and Nike also closed higher.

AMC Entertainment shares soared nearly 45 percent. The movie theater company’s CEO Adam Aron said more “transformational” M&A deals are on the way.

Chevron declined more than 2 percent. Caterpillar, Goldman Sachs, 3M, JP Morgan Chase, Intel and Boeing also closed weak, albeit with less pronounced losses.

Commodity, Currency Markets

Crude oil futures are tumbling $6.14 to $99.82 a barrel after plunging $7.94 to $105.96 a barrel on Monday. Meanwhile, after falling $15.10 to $1,944.70 an ounce in the previous session, gold futures are plummeting $50.10 to $1,894.60 an ounce.

On the currency front, the U.S. dollar is trading at 122.59 yen compared to the 123.86 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1123 compared to yesterday’s $1.0985.

Asia

Asian stocks rose broadly on Tuesday as Turkish President Recep Tayyip Erdogan opened the latest round of peace talks between Ukraine and Russia in Istanbul with a speech.

Russia appeared to be de-emphasizing ground operations near Kyiv and concentrating more on the Donbas region.

China’s Shanghai Composite Index closed 0.3 percent lower at 3,203.94 despite speculation that authorities could reduce bank reserve requirements to support credit expansion and prop up economic growth. Hong Kong’s Hang Seng Index gained 1.1 percent to settle at 21,927.63.

Japanese shares led regional gains after the Bank of Japan vowed to defend a key yield cap, offering to buy unlimited government bonds for the first four days of this week in the face of mounting inflationary pressures.

The Nikkei 225 Index climbed 1.1 percent to close at 28,252.42, while the dollar hit a six-year high versus the yen on the decisive BoJ move to contain rising bond yields.

Australian markets rose for the sixth straight session, with tech companies and financials outperforming. Block Inc. shares soared 6.8 percent and Xero added 3.3 percent.

Miners and energy stocks declined as commodity prices fell on concerns over demand after China’s moves to combat a Covid-19 outbreak.

The benchmark S&P/ASX 200 Index rose 0.7 percent to 7,464.30 – marking its highest level since January 13 after retail sales figures for February beat forecasts.

Seoul stocks eked out modest gains after central bank data showed that consumer confidence held up relatively well in March despite increasing global risks.

Inflation expectations also rose, raising speculation the Bank of Korea will resume policy rate hikes in May.

The Kospi inched up 0.4 percent to 2,741.07. Samsung Electronics, LG Energy Solution and SK Hynix climbed 1-2 percent while state-run Korea Electric Power Corp. fell as much as 2.8 percent.

Europe

European stocks are moving higher for a third day running on Tuesday amid hopes for Russia-Ukraine peace talks.

Negotiators began face-to-face talks in Istanbul today after Ukraine said it is willing to become neutral and compromise over the status of the eastern Donbas region as part of a peace deal.

While the U.K.’s FTSE 100 Index has jumped by 1.4 percent, the German DAX Index and the French CAC 40 Index are up by 3.2 percent and 3.3 percent, respectively.

Sweden’s Alfa Laval has jumped after it won its largest order ever to supply brewery systems to Golden Brewery, the largest brewery in the United States.

Danish pharmaceutical company Novo Nordisk has also rallied. The U.S. FDA has approved a higher dosage of the drugmaker’s 2 mg of Ozempic for the treatment of adults with type 2 diabetes.

AstraZeneca has also advanced after the European Commission granted marketing authorization to Evusheld, a Covid-19 vaccine alternative.

Bellway has fallen. After reporting increases in revenue and profit, the housebuilder has warned over potentially significant costs on building safety.

Mulberry Group shares have surged. After a solid trading update for the second half, the luxury handbag maker said that full-year profit and revenue were set to be “moderately ahead” of expectations.

French healthcare group Sanofi has gained about 1 percent after raising its peak sales target for eczema-treatment product Dupixent to more than 13 billion euros ($14.3 billion).

Investors shrugged off results of a closely-watched survey showing that Germany’s consumer confidence is set to weaken more than expected in April, hurt significantly by the war in Ukraine.

The forward-looking consumer confidence index dropped to -15.5 from a revised -8.5 in March, the market research growth GfK said. Economists had expected a reading of -14.

Separate data from Destatis showed that Germany’s import price inflation moderated slightly in February but remained at an elevated level.

Import prices grew 26.3 percent on a yearly basis in February, slower than the 26.9 percent increase in January. The rate was forecast to remain stable at 26.9 percent, which was the strongest since October 1974.

U.S. Economic Reports

Standard & Poor’s is scheduled to release its report on home prices in major metropolitan areas in the month of January at 9 am ET.

Also at 9 am ET, New York Federal Reserve President John Williams is due to make opening and closing remarks at the New York Fed Web Series on Culture: Trust in Banks: Where Are We Now?

The Conference Board is scheduled to release its report on consumer confidence in the month of March at 10 am ET. The consumer confidence index is expected to dip to 107.0 in March from 110.5 in February.

At 10:45 am ET, Philadelphia Federal Reserve President Patrick Harker is due to speak on the economic outlook before an event hosted by the Center for Financial Stability.

The Treasury Department is scheduled to announce the results of this month’s auction of $47 billion worth of seven-year notes at 1 pm ET.

At 9:30 pm ET, Atlanta Federal Reserve President Raphael Bostic is due to speak on Economic Leadership from America’s Founding to the Global Pandemic at the University of Southern California’s George Washington Leadership Lecture Series.