US stocks rally on falling oil prices, Dow closes up 2%

Traders work on the floor of the New York Stock Exchange. PHOTO: REUTERS

NEW YORK (AFP) - Wall Street ended Wednesday’s (March 9) trading well into positive territory, gaining back some ground lost in recent sessions thanks to a rise in oil prices even as Russia’s invasion of Ukraine continued.

The benchmark Dow Jones Industrial Average closed 2 per cent higher at 33,286.25, and the broad-based S&P 500 gained 2.6 per cent to 4,277.89.

The tech-rich Nasdaq Composite Index rose 3.6 per cent to finish at 13,255.55.

Oil prices dropped more than 11 per cent over the course of New York trading, which fueled the rally, though Peter Cardillo of Spartan Capital Securities warned of further turbulence ahead.

“Today’s rally is based on the decline in oil prices, but we haven’t yet seen the bottom in stock prices nor have we seen the highs in oil prices,” he said.

“For stocks, we are getting close but I don’t think we’ve seen the bottom yet, which means we can have another trip down.”

Equities have suffered and prices of commodities including oil have spiked in recent sessions after Russia invaded its neighbour, prompting fierce sanctions from western governments, including a US ban on Russia oil imports announced Tuesday.

McDonald’s closed 0.1 per cent lower after announcing Tuesday it would shutter all restaurants in Russia.

Coca-Cola finished up 3.6 per cent and Starbucks gained 4.3 per cent after both companies said they would halt operations in the country as well.

Traders also have grown skittish as the Federal Reserve has sent clear signals it will hike interest rates at its meeting next week for the first time since Covid-19 broke out to fight inflation.

Consumer price data set for release Thursday is likely to show inflation climbing again in February, even before the recent spike in energy prices.

Follow The Straits Times' live coverage on the Ukraine crisis here.

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