US Stocks rebound on Powell Comments, Russia-Ukraine talk hopes

The US stocks rebounded on Wednesday, 02 March 2022, with the Dow, the Nasdaq, and the S&P500 indexes all settling significantly above neutral line.

The strength on Wall Street came amid hopes for a diplomatic resolution to Russia's invasion of Ukraine and after Federal Reserve Chairman Jerome Powell provided clarity on the interest-rate outlook. Also, boosting market sentiments was payroll processor ADP report showing U.S. private sector employment jumped by much more than expected in the month of February.

Also, boosting market sentiments was Federal Reserve Chair Jerome Powell signals that interest rate hikes could start this month despite uncertainties surrounding the conflict in Ukraine.

At the close of trade, the Dow Jones Industrial Average index advanced 596.40 points, or 1.79%, to 33,891.35. The S&P500 index surged 80.28 points, or 1.86%, to 4,386.54. The tech-heavy Nasdaq Composite Index gained 219.56 points, or 1.62%, to 13,752.02.

Advancing stocks outnumbered declining ones on the NYSE exchange by 2439 to 908 and 138 closed unchanged. In the NASDAQ, 3092 issues advanced, 1586 issues declined, and 290 issues unchanged.

All 11 major S&P 500 sector indexes advanced, with top performing issues were financials (up 2.55%), materials (up 2.24%), energy (up 2.22%), information technology (up 2.19%), and industrials (up 2.19%).

Fresh gains in U.S. stocks appeared to coincide with reports Russian delegates were ready to resume talks with Ukraine officials on Wednesday evening, though there was no immediate response from the Ukrainian side.

Federal Reserve Chair Jerome Powell signals that interest rate hikes could start this month despite uncertainties surrounding the conflict in Ukraine. Mr. Powell said he would propose a quarter-percentage point rate increase in the central bank's meeting in two weeks amid high inflation, strong economic demand, and a tight labour market. The hint that the interest-rate increase would be more modest than the 50-basis point hike some investors had anticipated was seen as the sweet spot for banks.

ECONOMIC NEWS: US Private Sector Employment Jumps In February- US private sector employment surged by 475,000 jobs in February, payroll processor ADP reported on Wednesday. The report also showed a substantial revision to the January data, with the revised data showing employment spiked by 509,000 jobs compared to the previously reported loss of 301,000 jobs. The stronger than expected job growth partly reflected a sharp increase in employment in the service-providing sector, which added 417,000 jobs. Employment in the leisure and hospitality sector helped lead the way higher, surging up by 170,000 jobs during the month. The report also showed employment at large businesses spiked by 552,000 jobs in February, more than offsetting the loss of 96,000 jobs at small businesses.

US Economy Has Expanded At Modest To Moderate Pace, Notes Fed's Beige Book - The Fed's Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, noted that many districts reported that the surge in Covid-19 cases temporarily disrupted business activity as firms faced heighted absenteeism. The US economy grew at a modest to moderate pace from mid-January through early February as the Omicron variant of Covid-19 disrupted businesses and held back consumer spending, the Federal Reserve said Wednesday. While the Beige Book said manufacturing activity continued to grow at a modest pace, all districts noted that supply chain issues and low inventories continued to restrain growth, particularly in the construction sector. The report also said employment increased at a modest to moderate pace, although widespread strong demand for workers remained hampered by equally widespread reports of worker scarcity. The Fed noted consumer spending was subsequently generally weaker than in the prior report, which was released in early January.

Among Indian ADR, INFOSYS gained 1.94% to $22.59, Wipro added 2.95% to $7.32, HDFC Bank gained 1.42% to $61.23, ICICI Bank rose 1.89% to $18.85, Tata Motors grew 3.78% to $29.89, and WNS Holdings added 3.19% to $83.05, while Dr Reddys Labs fell 2.72% to $51.23 and Azure Power Global sank 5% to $17.18.

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