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U.S. Stocks Close Out Q1 on a Down Note as War in Ukraine Continues

Market Watch – April 1, 2022

April 1, 2022

U.S. stocks closed slightly higher following a volatile session Monday, while bond yields remained near three- year highs, as investors braced themselves for a new period of rising rates from the Fed. By Monday’s close, the Nasdaq was up 185 points, while the Dow and S&P 500 recorded more modest gains. In Canada, the TSX fell 28 points, with the energy sector retreating from recent highs as concerns over demand from China weighed on oil prices.

North American markets registered solid gains, and oil prices recorded their largest declines in more than a week on Tuesday, as Brent crude fell about 2% to settle around $110 a barrel. In Canada, the TSX was up 109 points, buoyed by Shopify, which rose 5.8%.

Major North American markets were slightly in the red on Wednesday, as rising commodity prices and a lack of progress in cease-fire talks between Russia and Ukraine weighed on investors. Meanwhile, the loonie on Wednesday strengthened to its highest level in nearly five months against the greenback, hitting 80.4 US cents. U.S. stocks finished the first quarter on a down note Thursday, with their biggest quarterly decline in two years, as investors grapple with rising rates, inflation and the war in Ukraine. For Q1, the S&P 500 fell nearly 5%, while the Nasdaq and Dow lost 9.1% and 4.6%, respectively. The TSX also closed lower on Thursday, with the energy, financials and materials sectors all losing ground.

Finally, the closely watched yield curve between 2-year and 10-year U.S. Treasuries was around 4 basis points Thursday, after briefly inverting on Tuesday. An inversion is generally viewed as a reliable signal of a recession within the next 12 to 24 months.

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