US stocks gain, oil drops as investors eye Fed hike decision

Stocks advanced as a selloff in oil gathered momentum while New York manufacturing data came in much weaker than expected, easing fears about more aggressive Federal Reserve tightening that could stifle economic growth.

The equity market rebounded after a three-day slide, with defensive groups like consumer staples and utilities leading gains in the S&P 500. Treasury 10-year yields dropped from the highest level since 2019, joining a decline in the U.S. dollar. Shares of airlines jumped as crude hovered near $95 a barrel. U.S.-listed Chinese shares continued to push lower amid concern about the nation’s ties to Russia and persistent regulatory pressures.

Prices paid to U.S. producers rose strongly in February on higher costs of goods, underscoring inflationary pressures that set the stage for the Fed’s first rate increase since 2018 on Wednesday. Still, officials will have to balance curbing higher prices without hampering the economic rebound. A separate report showed New York state manufacturing activity weakened considerably in early March as orders fell and delivery times lengthened.

The prime ministers of Poland, the Czech Republic and Slovenia are making an unexpected trip to Kyiv to meet with Ukrainian President Volodymyr Zelenskiy and plan to announce a “broad package” of support measures. China said it wants to avoid being impacted by U.S. sanctions over Russia’s war, in one of Beijing’s most-explicit statements yet on American penalties that are contributing to a market selloff in the world’s second-biggest economy.

Here are some key events to watch this week:

• EIA crude oil inventory report, Wednesday
• FOMC rate decision and Fed Chair Jerome Powell news conference, Wednesday
• 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 0.5% as of 9:50 a.m. New York time
• The Nasdaq 100 rose 0.6%
• The Dow Jones Industrial Average rose 0.6%
• The Stoxx Europe 600 fell 0.6%
• The MSCI World index fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.4% to $1.0989
• The British pound rose 0.6% to $1.3075
• The Japanese yen rose 0.2% to 117.94 per dollar

Bonds

• The yield on 10-year Treasuries declined five basis points to 2.08%
• Germany’s 10-year yield declined four basis points to 0.33%
• Britain’s 10-year yield declined three basis points to 1.56%

Commodities

• West Texas Intermediate crude fell 7% to $95.75 a barrel
• Gold futures fell 1.9% to $1,924.10 an ounce

–With assistance from Andreea Papuc and Robert Brand.