Pressure on Wall widens as optimism for de-escalation in Ukraine fades

LAST UPDATE: 21:50

The four-day uptrend in the US market seems to be fueled by contradictory statements by Russian officials about the outcome of the latest negotiations with the Ukrainians over the conflict in Ukraine, with Wall Street indices recording losses in Wednesday’s trading.

Losses that widen as the meeting continues, as the statements of Federal Reserve officials calling for a faster removal of the US Federal Reserve from its extremely facilitative policy to date are increasing. On Wednesday, it was the turn of Kansas City Fed Chairman Esther George, who, speaking at the New York Economic Club, said that “a rapid transition to a neutral policy stance is appropriate.”

On the board, the Dow Jones industrial average lost 143.42 points or 0.41% and moved to 35,150.77 points, the broader S&P 500 fell 34.35 points or 0.74% to 4,597.25 points, while the technology Nasdaq recorded losses of 153.66 points or 1.05% and traded at 14,465.97 points.

The shift in the market is fueled by Russia’s stance, which appears to remain in “offensive mode”, with Russian troops continuing to bomb Kiev and Chernihiv outskirts despite Moscow’s commitment yesterday to reduce its military operations in Ukraine. and focus on the eastern parts of Donbass.

At the same time, Kremlin spokesman Dmitry Peshkov said talks between the Russian and Ukrainian delegations in Istanbul on Tuesday had yielded no “hopeful” or “progress”.

“At the moment we can not talk about anything particularly promising or any progress. There is still a lot of work to be done,” Peshkov said, adding that he was only pleased that Ukraine had set its terms in writing.

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 annexed territories. .

Peshkov’s statements contradict the assessments of the negotiators of the two sides. Ukrainian negotiator Mikhail Pontolyak said on Wednesday he was optimistic after talks with Russia in which Moscow said it would reduce military operations near Kyiv and Chernihiv.

The head of the Russian diplomacy, Vladimir Medinsky, stated for his part that the talks with the Ukrainian side continue. He added that Russia’s position on Crimea and Donbass has not changed, and stressed that Ukraine has expressed its willingness to meet key Russian demands.

Doubts about the progress of the Russia-Ukraine talks were confirmed by Ukrainian President Volodymyr Zelensky in his message last night, where he stressed that the indications from the negotiations look positive, but have not stopped the Russian bombing.

In addition to Ukraine, investors are also evaluating 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 are also watching the bond market as the yield on the 2-year US bond slightly exceeded the yield on the 10-year bond 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.