ASX set to rise as tech giants drive Wall Street higher – Sydney Morning Herald

Russias invasion of Ukraine has been unsettling markets and adding to lingering concerns about persistently rising inflation and global economic growth.

What weve seen over the course of last several weeks is capital markets have looked toward removing some of the worst case scenarios, said Bill Northey, senior investment director at US Bank Wealth Management.

Energy prices have been extremely volatile as the conflict continues, but have been easing over the last few days. Pressure on prices is also being relieved as Chinese authorities lock down Shanghai because of a surge in COVID-19 cases, which could crimp global demand for oil.

US crude oil prices fell 1.6 per cent and Brent crude, the international standard, slid 6.8 per cent. Prices are still up more than 30 per cent globally, but were up more than 50 per cent as of just last week.

Falling oil prices weighed down energy companies, which had some of the biggest losses on Tuesday. Chevron fell 1.2 per cent

More than 85 per cent of the stocks in the benchmark S&P 500 rose. Technology and communication stocks helped power the rally, along with big retail chains, automakers and other companies that rely on consumer spending. Apple rose 1.9 per cent and Netflix added 3.5 per cent. Ford Motor climbed 6.5 per cent and General Motors gained 4.6 per cent.

European markets rose, while Asian markets closed mixed overnight.

The yield on the 10-year Treasury note, which influences interest rates on mortgages and other consumer loans, fell to 2.39 per cent from 2.47 per cent late on Tuesday. It briefly dropped below the 2-year Treasurys yield, what Wall Street calls an inversion of the Treasury yield curve. Investors take note of this because prolonged yield inversions have accurately predicted previous US recessions. The 2-year Treasury yield rose to 2.36 per cent.

The brief inversion in the yield curves may just be a blip, given that in the times when theyve preceded a recession, theyve remained inverted for some time and, even then, its taken an average of 18 months before a recession followed, Bell said.

Developments in that part of the yield curve over the next couple of days, next couple of weeks, will be really important to watch, she said.

Bond yields had been rising as Wall Street prepares for higher interest rates after years of ultra-low interest policies from central banks around the world. The rate hikes are part of a strategy to help temper the impacts of rising inflation.

The Federal Reserve has already announced a 0.25 per cent hike of its key benchmark interest rate and is prepared to continue raising rates.

Wall Street is also reviewing the latest economic updates this week. US consumer confidence bounced back in March, according to a report from business research group The Conference Board.

The Commerce Department will release its February report for personal income and spending on Thursday and the Labor Department will release its employment report for March on Friday.