Stocks dipped Wednesday after jumping a day earlier when an apparent deescalation of Russian advances in Ukraine helped boost U.S. equities. Investors also eyed a fresh print on the state of consumer spending in the Commerce Department's latest retail sales report, which showed a larger-than-expected rebound in consumption at the start of the year.
The S&P 500 edged down. On Tuesday, the index closed higher by 1.6% in its first rise in four sessions. The jump came amid an announcement from Russia that it had pulled back troops near Ukraine and was seeking to continue diplomatic efforts with the West. However, President Joe Biden said during a news conference Tuesday afternoon that a Russian invasion of Ukraine remained "distinctly possible," while noting that diplomacy should be given "every chance to succeed."
Crude oil prices and energy stocks rose Wednesday to recover some of Tuesday's losses, as the latest geopolitical headlines appeared to reduce the threat of immediate military action and potential disruption of Russian energy supplies. West Texas intermediate crude oil futures rose above $93 per barrel, hovering near a seven-year high.
The latest move to the upside across the broader stock indexes represented a momentary relief rally after a three-day losing streak, but only modestly unwound year-to-date losses as concerns over inflation and the Federal Reserve's next move lingered. And with inflation running at multi-decade highs, uncertainty around the trajectory of domestic economic growth has remained an ongoing point of concern for investors. Wholesale prices surged by 9.7% in January over last year, representing a near-record jump.
"At the moment, the market is twisting and turning on headlines, and we wouldn't overplay it either way. There's still a lot of uncertainty around this geopolitical risk," Matthew Miskin, John Hancock Investment Management co-chief investment strategist, told Yahoo Finance Live. "We're looking at the earnings picture — still pretty good. Economic data is OK. But right now we're kind of stuck in this stagflation-type environment, where the economic data is kind of stagnating and yet inflationary pressures are still building."
"We're kind of in this air pocket here where we're still in this stagflation-type backdrop," he added. "We think growth [will] come back here in the next couple months, earnings stay solid, and equities offer a bit of an opportunity"
Another set of corporate earnings came in mixed. Roblox (RBLX) shares tumbled after the video-game company posted quarterly gross bookings that fell short of Wall Street's estimates, signaling some slowing growth as stay-in-place behavior eased. ViacomCBS (VIAC) missed expectations for fourth-quarter profit and announced the company's name was changing to Paramount in a nod to its streaming platform, Paramount+. Airbnb (ABNB), meanwhile, posted fourth-quarter sales and bookings that topped estimates, becoming one of the latest accommodations companies to highlight encouraging trends in the travel recovery.