US stocks rallied on Tuesday, thanks to easing geopolitical tensions in Ukraine. The Nasdaq 100 even outperformed major benchmarks as energy producers joined in the plunge in oil prices and 10-year Treasury yields topped 2%.
Markets dropped earlier because the crisis in Ukraine exacerbated and expectations for Fed tapering increased sharply. The US PPI also jumped more than expected in January, mainly due to companies suffering with supply chain and labor constraints.
Morgan Stanley managing director Mike Loewengart said: "Speculation around the Fed's action plan, which goes hand-in-hand with inflation, has no doubt been driving market volatility, but so have geopolitics. With tension cooling, at least for now, the market could welcome some certainty. So while the PPI read is hotter than expected, heightened inflation may already be priced into the market."
Today it is worth paying attention to such key events:
- EIA report on crude oil reserves;
- basic index of US retail sales;
- FOMC protocol;
- CPI of China.
Other key events for this week are:
- publication of EIA crude oil inventory report;
- release of data on US retail sales;
- publication of FOMC minutes;
- release of data on China CPI.
