that sent stocks sliding – while spurring a flight to the safest corners of the market such as bonds and the dollar. Oil rallied.
“Since gold and oil markets have been pricing in a meaningful impact on the marketplace from this crisis, it’s not out of the question that the stock market will follow those other markets and see an outsized reaction before long,” Maley noted.The S&P 500 fell 1.5 per cent, with banks and chipmakers leading losses. A gauge of small caps slid 2 per cent. Treasury 10-year yields sank seven basis points to 4.52 per cent.
“Investors have pushed back their expectations for the start of the Fed’s easing cycle – with geopolitics possibly replacing the Fed as one of the market’s top volatility influencers,” he noted.Meantime banks’ results offered the latest window into how the US economy is faring amid an interest-rate trajectory muddied by persistent inflation.
And the latest economic data did little to alter the reduced risk appetite – with consumer sentiment down as inflation expectations rose. Meantime, Pacific Investment Management Co. warned that the Fed could pivot back toward interest rate hikes if US inflation moves higher — with the asset manager preferring to buy bonds in other markets.