Stocks were mostly flat on Tuesday as traders continue to assess the odds of a recession and the latest developments in Ukraine that is keeping oil over $100 a barrel.
The S&P 500 was about flat, taking a breather after two gains in a row. Nasdaq Composite shed 0.4%, pulling back after a 1.9% gain in the prior session. The Dow Jones Industrial Average traded about 100 points higher, or 0.3%, helped by gains in Merck and Chevron.
Treasury yields rose broadly Tuesday, but rates on some shorter-term bonds continued to trade above their longer-dated counterparts. The 5-year yield climbed to 2.6%, while the 30-year rate traded around 2.525%. However, the key part of the yield curve briefly uninverted Tuesday, with the 2-year yield trading marginally below its 10-year counterpart.
These so-called yield curve inversions, which are closely watched by investors, have historically preceded recessions. Investors are awaiting the release of Federal Reserve meeting minutes Wednesday which could offer further clues on the central bank’s rate-hike path and the odds of a recession. Deutsche Bank became the first major bank to forecast a recession in the U.S.
Meanwhile, Twitter shares rose more than 6% on news that Elon Musk will join the company’s board of directors. It comes a day after he revealed a 9.2% stake in the social media giant, which saw its best day since its IPO on Monday.
Investors continue to keep an eye on Europe, as the war between Ukraine and Russia continues. Ukraine President Volodymyr Zelenskyy pledged to pursue allegations of war crimes against Russian forces, noting that more than 300 people were killed and tortured in a suburb near the capital of Kyiv. (Click here for the latest.)
“Markets have been resilient given the war in Ukraine, continued price pressures, and uncertain global economic outlook, with investors’ ‘buy the dip’ mentality driving equity returns,” said Mark Hackett, Nationwide’s chief of investment research.
Oil prices continued their climb on Tuesday, with West Texas Intermediate rising 0.7% at $104.03 per barrel and Brent crude gaining 0.5% to $108.09. The market has been volatile since the onset of the war amid concerns over supply disruptions.
The moves come after a tech-led rally that saw the Nasdaq Composite rise 1.9% on Monday, led by shares of Twitter. The blue-chip Dow rose about 100 points to begin the trading week, while the S&P 500 advanced 0.8%, both posting their second straight day of gains.
“In the near-term, we believe indiscriminate selling has created attractive entry points, particularly into some high-growth-potential stocks,” Tony DeSpirito, CIO of U.S. fundamental equities at BlackRock, said in a note.
The new quarter has kicked off after the major averages finished their worst quarter in two years. Investors are preparing for the first-quarter corporate earnings season, which is set to begin next week.