All three major U.S. stock benchmarks closed lower Thursday, with the Dow Jones Industrial Average, S&P 500 index and Nasdaq Composite booking their largest quarterly drop in two years, capping a first quarter in which the Federal Reserve’s monetary tightening and the Russian invasion of Ukraine have weighed on sentiment.
How did stock indexes perform?
-
The Dow Jones Industrial Average
DJIA
dropped 550.46 points, or 1.6%, to close at 34,678.35. -
The S&P 500
SPX
fell 72.04 points, or 1.6%, to finish at 4,530.41. -
The Nasdaq Composite
COMP
shed 221.76 points, or 1.5%, to end at 14,220.52.
On Wednesday, the Dow and S&P 500 snapped a four-day winning streak, while the Nasdaq Composite dropped 1.2% after back-to-back gains.
In March, the Dow rose 2.3%, the S&P 500 climbed 3.6% and the Nasdaq Composite advanced 3.4%, according to Dow Jones Market Data. For the first quarter, the Dow dropped 4.6%, the S&P 500 slid 4.9% and the Nasdaq tumbled 9.1%, the data show.
All three major U.S. stock benchmarks saw their largest percentage decline since the first quarter of 2020, according to Dow Jones Market Data.
What drove markets?
Despite a recent winning run, it’s been a rough first quarter for the U.S. stock market.
Yet “the worst quarter in two years isn’t so bad as the S&P 500 index is roughly 5% away from record highs,” said Edward Moya, senior market analyst at Oanda, in a note. “Wall Street will have a lot to debate over the next few months but a choppy stock market seems likely as no clear answers will be had on when peak inflation happens and how aggressive will the Fed be with tightening until geopolitical risks are resolved.”
Investors were digesting a heavy slate of U.S. economic figures Thursday, including data on personal consumption and expenditures. The PCE core price index, the Fed’s favored inflation measure, rose 5.4% year over year in February, up from 5.2% a month earlier.
There’s room for inflation readings to show “signs of stabilizing and decreasing within the next couple months,” said Andrew Patterson, a senior international economist in Vanguard’s investment strategy group, in a phone interview Thursday. “If they’re still trending upwards towards June, that’s when we’re really starting to talk about all the options the Fed has at its disposal.”
In other economic data released Thursday, consumer spending rose 0.2% in February, below forecast. Meanwhile, data on weekly jobless claims showed first-time applications for unemployment benefits rose 14,000 last week to 202,000.
Investors were also taking note of news that President Joe Biden on Thursday announced more releases from the U.S. Strategic Petroleum Reserves. Biden plans to order the release of 1 million barrels of crude oil per day for the next six months from the reserve, the officials told reporters.
In addition, the Organization of the Petroleum Exporting Countries and its allies, including Russia, agreed, as expected, early Thursday to stick with a plan to boost output by 432,000 barrels a day in May. OPEC+ has resisted pleas to more rapidly boost production.
Meanwhile, the U.S. is targeting Russia’s technology sector in the latest round of sanctions aimed at punishing Moscow over its invasion of Ukraine. The Treasury’s Office of Foreign Assets Control said Thursday it is targeting operators in the sector “to prevent it from evading unprecedented multilateral sanctions and procure critical western technology.”
See also: Heavy fighting rages near Kyiv as Russia appears to regroup
Which companies were in focus?
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Shares of Walgreens Boots Alliance Inc.
WBA
dropped 5.7% after the drugstore chain reported fiscal second-quarter profit and sales that beat expectations.
How did other assets fare?
-
The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
fell 3.3 basis points to 2.324%. During the first quarter, the 10-year yield rose 82.8 basis points, for the largest first-quarter gain since March 2021, according to Dow Jones Market Data. Yields and debt prices move opposite each other. -
The ICE U.S. Dollar Index
DXY,
a measure of the currency against a basket of six major rivals, was up 0.6% Thursday. -
In oil futures, West Texas Intermediate crude for May delivery
CLK22
fell 7% to settle at $100.28 a barrel, the lowest finish since March 16, according to Dow Jones Market Data. -
In gold futures
GC00,
gold for June delivery
GCM22
rose 0.8% Thursday to settle at $1,954 an ounce. -
Bitcoin
BTCUSD
was down 3.6% at $45,551. -
In European equities, the Stoxx Europe 600
XX:SXXP
closed 0.9% lower and dropped 6.5% during the first quarter. London’s FTSE 100
UK:UKX
fell 0.8% Thursday and finished the first quarter up 1.8%. -
The Shanghai Composite
CN:SHCOMP
fell 0.4% Thursday, while the Hang Seng Index
HK:HSI
dropped 1.1% in Hong Kong and Japan’s Nikkei 225
JP:NIK
lost 0.7%.
—Steve Goldstein contributed to this report.