Global equity markets posted notable gains on Wednesday as hope of a slowdown in Middle East fighting and a stabilizing energy complex allowed investors to step back from the heightened moves that followed the conflict. The softer tone in oil and a retreat in volatility supported advances across U.S. and European bourses, although Asian markets were largely left behind and endured fresh losses.
Traders described the trading as a pause - driven variously by profit-taking, position-squaring, tactical trades or a technical rebound amid optimism that the conflict could wind down. The result was a synchronous easing in oil prices, the U.S. dollar and broader market volatility, while Wall Street, European shares, several emerging market currencies and silver saw a strong rebound.
Market performance snapshot
- Asia was broadly weaker, with South Korea among the hardest-hit markets.
- European equities rose between 1% and 3%.
- U.S. stock indexes closed higher as well.
- Eight sectors in the S&P 500 advanced, led by consumer discretionary, while energy, consumer staples and materials lagged.
- Individual movers included Amazon, up 4%, and Cisco, up 2.5%.
- Emerging market currencies experienced sharp swings intraday before closing stronger - examples include the Brazilian real, South African rand and Mexican peso.
- South Korea's won recovered from a 17-year low and India's rupee rebounded from a record low. The Australian dollar was the largest gainer among G10 currencies.
- Bitcoin climbed about 8% to trade above $73,000, reaching a one-month high.
- U.S. Treasury yields rose again, gaining roughly 5 basis points at the short end and producing further bear-flattening of the curve; the 2s/10s spread closed at 54 basis points, the flattest close so far this year.
- Oil prices were steady as U.S. crude inventories rose; European LNG prices fell by about 10%.
- Precious metals moved higher: gold rose about 1% and other metals gained as much as 3%.
Economic activity remained surprisingly robust in February
Purchasing managers' index surveys for February, which were compiled before the most recent Middle East developments, showed that business activity was running at a firmer-than-expected pace in many regions. Service-sector PMIs indicated U.S. activity climbed to its strongest point in more than three-and-a-half years. China saw the strongest activity in three years by its measures, and growth momentum in Europe accelerated as well. These stronger-than-anticipated service-sector readings came on the heels of fairly upbeat manufacturing PMIs.
Fed chair nomination moves to Senate
President Donald Trump formally sent Kevin Warsh's nomination to the U.S. Senate on Wednesday to succeed as chair of the Federal Reserve. The confirmation path is expected to be contentious. Some senators have raised concerns about the administration's inquiries into current Fed Chair Jerome Powell and Governor Lisa Cook, while others warn that Warsh could be perceived as closely aligned with the White House, an argument that has prompted debate about the central bank's institutional independence.
Near-term market movers to watch
- Any new developments in the Middle East
- Australia trade data for January
- Taiwan industrial production for January
- United Kingdom PMI for February
- Remarks by European Central Bank President Christine Lagarde
- Speeches by ECB officials Luis de Guindos, Olli Rehn and Sharon Donnery at an IIF event in Brussels
- Euro zone retail sales for January
- Brazil unemployment figures for February
- U.S. weekly jobless claims
- U.S. Challenger job-cut announcements for February
- Preliminary U.S. productivity data for Q4
- U.S. import prices for January
- Comments from U.S. Federal Reserve Vice Chair for Supervision Michelle Bowman
Investors and market observers said they will be watching these data points and speeches closely as potential catalysts for renewed market moves.
Note: This analysis reflects market moves, survey data and political developments reported for the day. It avoids commentary beyond the facts presented and does not include external endorsements or product promotions.