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Stocks Jump Amid Ukraine Talks Before Fed Decision: Markets Wrap

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(Bloomberg) — U.S. stocks climbed on Wednesday after the Kremlin hinted at progress in peace talks with Ukraine, adding to positive sentiment stoked by China’s vow to stabilize its markets. Treasuries and the dollar slipped ahead of the Federal Reserve rates decision.

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The S&P 500 rose for a second day, led by technology and retail shares. West Texas Intermediate crude advanced, but stayed below $100 a barrel.

A Ukrainian proposal to become a neutral country but retain its own armed forces “could be viewed as a certain kind of compromise,” Kremlin spokesman Dmitry Peskov said Wednesday, fueling optimism a negotiated solution may be possible. Earlier, China vowed policies to spur economic growth and boost its battered financial markets.

A quarter-point Fed rate increase, the first since 2018, to fight high inflation is widely anticipated but there’s less certainty beyond that. Data Wednesday showed U.S. retail sales slowed in February, suggesting that consumers are pulling back spending as inflation limits purchasing power. Russia’s invasion of Ukraine has sent gasoline prices to a record and is adding to cost pressures more broadly through soaring commodities.

“We will be closely watching the Fed’s dot plot, which we expect to signal five or six interest-rate hikes this year, more than December’s projections but in line with market expectations,” wrote Lauren Goodwin, portfolio strategist at New York Life Investments. “A dot plot projecting more hiking would likely be a hawkish signal and could result in an earlier yield curve inversion.”

Elsewhere, the London Metal Exchange froze electronic trading in nickel immediately after it restarted from a week-long suspension, after a systems glitch allowed prices to plunge past a new daily limit that was supposed to help restore order following last week’s historic short squeeze.

Here are some key events to watch this week:

Bank of England rate decision, Thursday

ECB President Christine Lagarde, Executive Board member Isabel Schnabel, Governing Council member Ignazio Visco and Chief Economist Philip Lane speak at a conference, Thursday

Bank of Japan rate decision, Friday

Some of the main moves in markets:

Stocks

The S&P 500 rose 0.9% as of 9:30 a.m. New York time

The Nasdaq 100 rose 1.4%

The Dow Jones Industrial Average rose 0.9%

The Stoxx Europe 600 rose 2.4%

The MSCI World index rose 1.4%

Currencies

The Bloomberg Dollar Spot Index fell 0.3%

The euro rose 0.3% to $1.0989

The British pound rose 0.3% to $1.3082

The Japanese yen was little changed at 118.28 per dollar

Bonds

The yield on 10-year Treasuries advanced two basis points to 2.16%

Germany’s 10-year yield advanced five basis points to 0.38%

Britain’s 10-year yield advanced four basis points to 1.61%

Commodities

West Texas Intermediate crude rose 1.8% to $98.18 a barrel

Gold futures fell 0.5% to $1,920 an ounce

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*U.S. Import Prices Jump 1.4% February, Export Prices Spike 3.0%

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