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Stocks and crypto fall after huge inflation numbers and failed peace talks between Russia and Ukraine

March 10, 2022, 10:33 PM UTC

Stocks and cryptocurrencies sank on Thursday after U.S. inflation data came in at a four-decade high and peace talks between Russia and Ukraine failed to yield results.

“Bottom line for investors: Strap in for a bumpy ride, but keep your wits about you and don’t react emotionally,” Mike Loewengart, managing director of investment strategy at E*Trade, told Bloomberg.

The Dow Jones Industrial Average sank 0.34% and 112 points on the day to trade to $33,174, while the S&P 500 dropped 0.4% to $4,259.

Tech stocks led the Nasdaq 1% lower to $13,129, despite Amazon’s 6% jump after it announced a stock split and a $10 billion buyback plan, and Crowdstrike’s 12.5% rise after posting strong earnings results.

Cryptocurrencies also fell on Thursday, with Bitcoin down roughly 6% to under $40,000, while Ethereum dropped around 3% to trade near $2,615.

The down day for equities and crypto came after Russian foreign minister Sergei Lavrov met with his Ukrainian counterpart Dmytro Kuleba in Turkey to discuss a 24-hour ceasefire, but efforts proved unfruitful.

Fears of stagflation or even recession also reverberated around Wall Street after the February Consumer Price Index (CPI) released today revealed a 7.9% jump in prices compared to a year ago, the highest number seen since 1982.

While energy and food prices were major contributors to February’s increase in consumer prices, more broad-based effects have also taken effect, and prices are up across for all kinds of goods. Roughly two-thirds of the components of CPI rose at a rate of 4% or faster, compared with less than half of the components in January.

Economists were quick to caution that February’s wild inflation numbers may not be an end to rising consumer prices, especially because the effects of Russia’s recent invasion of Ukraine happened late in the month, and have yet to be fully priced into CPI.

“It was hoped a few weeks ago that these readings would mark the high of this inflation episode.

No longer,” Mohamed El-Erian, President of Queen’s College Cambridge and senior adviser at Gramercy Capital, wrote on Thursday. “With so many price pressures in the pipeline, even this 40-year high print will go higher.”

President Biden also released a statement touting a robust jobs recovery after Thursday’s release of inflation data, calling the rise in consumer prices “Putin’s price hike.”

Oil continues its price reprieve after recent rally

Brent crude oil prices sank 1.8% to trade below $110 per barrel on Thursday, in another day of reprieve for the commodity after prices hit a 14-year high of $139.14 per barrel on Monday. 

West Texas Intermediate crude oil fell even further, dropping roughly 3% on the day, to trade around $105 per barrel after reaching levels as high as $130 per barrel earlier in the week.

Gold and commodities remain volatile

Commodities continue to experience volatile trading as Russia’s invasion of Ukraine has left markets around the world reeling.

Gold prices rose 0.66% on Thursday, as the safe-haven asset continues to trade around $2,000 per troy ounce. Silver and platinum went in opposite directions rising 1.7% and falling 0.9%, respectively.

Food-related commodity prices continue to experience rocky trading sessions as well, with wheat prices dropping nearly 10% on Thursday, as coffee prices dipped 2.84%. 

Corn prices continued to edge higher, jumping roughly 3% on the day, as Soybeans rose 4.7%.

“The violent gyrations of the market seem completely attached to Ukraine-Russia peace talks,” Timothy Lesko, senior wealth advisor at Mariner Wealth Advisors, told CNBC. “The fall in commodity prices seemed to trigger a relief rally that is unwinding a bit as peace talks seemed fruitless.”

Inflation pushes treasury yields higher

Inflation data also caused 10-year Treasury yields to jump to nearly 2%, levels not seen since February 25, and the 30-year rate moved the highest figure seen since May 2021 at 2.37%. Two-year Treasuries also rose mildly to above 1.7% on the day.

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