Fall on the Wall as hopes for de-escalation in Ukraine fade

The continuing stalemate in the negotiations between Russia and Ukraine for a peace agreement, despite yesterday’s optimistic statements about the progress of the talks, but also the growing voices of Federal Reserve officials for a more aggressive increase in interest rates, put the US back on a downward trajectory.

Today’s meeting started cautiously, with investors assessing yesterday’s optimistic statements of the Kiev and Moscow negotiators after the talks in Istanbul on the one hand, and on the other the statements of the Russian “camp” today that nothing has changed substantially.

Dmitry Peshkov said on Wednesday that talks between the Russian and Ukrainian delegations in Istanbul on Tuesday had not yielded any “hopeful” or “progress”, adding that he welcomed the fact that Ukraine had set its terms. writings.

The Kremlin spokesman also stressed that Crimea is part of Russia and that the Russian Constitution excludes the possibility of discussing the fate of any Russian province with anyone, while Kyiv in its proposals speaks of a 15-year period of consultations on the status of the annexed region. .

Peshkov’s statements in conjunction with the ongoing bombardment of Russian troops on the outskirts of Kiev and in the northern city of Chernihiv, despite Moscow’s commitment yesterday to reduce its military operations and focus on the eastern part of Donbass, show that Russia in an “attack mode”, confirming the assessments of Ukrainian and Western officials that Moscow is not in the mood for a serious escalation of the war.

Pentagon spokesman John Kirby even said that the movement of Russian troops in the Kiev region was not a retreat but rather a reorganization of Russian forces.

Investors’ skepticism was exacerbated by a statement from Kansas City Fed Chairman Esther George, who told the New York Economic Club that below, a rapid transition to a neutral policy stance is appropriate. ”

George’s statement adds to a number of other Fed officials’ positions that converge in favor of a faster tightening of monetary policy by the US Federal Reserve, which raises concerns about the impact on the US economy, which is growing significantly, but still enjoying significant fiscal growth. .

In this context, investors also evaluate the latest data released earlier for the US economy, which showed a slight downward revision of US GDP for the fourth quarter of last year to 6.9% from 7% previously, but also better-than-expected data on new jobs, with U.S. companies adding another 455,000 jobs in March, according to a report by Automatic Data Processing with Moody’s Analytics on national employment.

Investors also continued to watch the bond market closely, as the yield on the 2-year US bond slightly exceeded the 10-year yield on Tuesday afternoon, temporarily reversing the yield curve.

The phenomenon is widely seen as a warning sign of a possible economic downturn, although some analysts warn that it is not a very good timing tool for investors. Yields, meanwhile, appear to be broadly lower for Wednesday.

Indicators – statistics

In the midst of this complex climate, volatility in the dashboard was for another session intense, with the indicators moving in a wide range but eventually closing away from the day lows, with the exception of the technological Nasdaq.

In particular, the Dow Jones industrial average closed down just 65.38 points or 0.19%, at 35,228.81 points, although intra-conference it lost about 200 points.

A similar picture was recorded by the broader S&P 500, which closed away from the day low with losses of 0.61% at 4,603.20 points, although during the session it flirted again with the correction area, from which it came out only yesterday after the + 1.2% that drove him above the 4,587.77 points, which he needed to get out of the correction area which is defined as a fall of at least 10% from the last high.

The strongest pressure was received on Wednesday by the technological Nasdaq, which closed with a fall of 177.36 points or 1.21%, to 14,442.27 points.