US weekly: All 3 major US indices ended higher for the second consecutive week

All 3 major US indices ended higher for the second consecutive week amid mixed macroeconomic signals, ongoing Russia-Ukraine crisis, interest rate hike concerns and rising crude oil prices. Among sectors, Tech, energy and materials sectors led to the upside while health care closed the week in the red.

The US market closed on the lower side after Fed chairman Jerome Powell raised concerns over surging inflation on Monday. After rising for 4 consecutive days last week, NASDAQ closed 0.4% lower. Investors have been worried about the growing geopolitical tensions.

U.S. stocks ended higher on Tuesday after investors digested Fed Chair Powell comments that the central bank could go for bigger interest rate hikes in its coming policy meetings in order to put a check on surging inflation. All the three major indexes ended in positive territory.

The increasing oil price and renewed inflation fear sent the market south on Wednesday. Investors closely watched the outcome of the emergency meeting to be held in Brussels. The WTI crude jumped about 5% to touch almost $115 per barrel.

The market made a comeback on Thursday as investors continued to monitor Russia's war in Ukraine and adjust to the Fed's monetary tightening plans. The White House in a statement said that the US will expand its sanctions on Russia in response to its invasion of Ukraine.

The market remained volatile on Friday but ended the week on a positive note. Biden said he would support removing Russia from the G20. For the week, S&P ended 1.8% higher and Nasdaq by 2%.

Highlights from this week:

Sharp rate hike expected: Concerns over an increasingly hawkish stance by the Federal Reserve seemed to weigh on equity sentiment early in the week, while prompting a sell-off in the bond market. On Monday, Fed Chair Jerome Powell repeated in a speech to the National Association for Business Economics that the central bank could deliver rate increases of larger than 25 basis points at future meetings to control inflation.

Macroeconomic update: The week’s macroeconomic data was a mixed bag. Feb new home sales declined 2.0% despite a rise in inventories to their highest levels since 2008. Feb pending home sales fell 4.1%, defying expectations. Conversely, IHS Markit’s gauge of manufacturing activity rose much more than expected in March and hit its highest level since September 2020, while its services gauge indicated the most activity since July 2021. Meanwhile, weekly jobless claims fell much more than expected and hit levels last seen in September 1969.

Update on Treasuries: Treasuries were sharply lower, with yields jumping, adding to a rally this week amid increased expectations of a more aggressive Fed monetary policy tightening cycle as it tries to combat the surge in inflation. 10-year Treasury rates are up more than 60 basis points (0.60%) so far in March, rising more than 30 basis points last week, bringing the 10-year yield to its highest level since May 2019.

Crude Oil prices: The US benchmark WTI crude rose by 9% this week to $112 a barrel after huge fall in the last weeks. The Energy sector continued to outperform by a wide margin as crude oil prices rebounded, with supply concerns mounting due to ongoing war in Eastern Europe.

Russia-Ukraine conflict: Concerns that Russia might deploy lower-yield nuclear weapons if its advance remained stalled hampered sentiment. Meanwhile, the US President imposed new sanctions on Russia this week and sent a stern warning, saying NATO would respond 'in kind' if Russia uses chemical or biological weapons in Ukraine. He also added that the US will send more aid and it would take up to 100,000 Ukraine refugees.