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Bears extend command of US stock market

US stock indices closed 1.5-2.5% lower on Wednesday, February 23. The key driver was the crisis unfolding in East Ukraine. After Russia announced the start of a special military operation in Donbass, the demand for risk-sensitive assets took a pounding.

Meanwhile, the Fed's rapid move away from near-zero rates only compounds the challenges now facing the stock market. Apparently, nothing can prevent a sharp sell-off today. Needless to say, growth stock will come under the heaviest pressure.

Closes
NASDAQ Composite: 13,037 (-2.57%)
S&P 500:  4,225.50 (-1.84%) 
DJIA: 33,113 (-1.38%)

In technical terms, the picture for high-risk stocks looks unchanged, with SPX 500 CFDs still trading within a downward medium-term trend.  The key 4,200 support level was breached.  Bearish sentiment prevails and we could see the benchmark tumble to 4,100 on the back of global geopolitical turmoil (see below the CFD chart on the SPX 500 from MT4).

Negative drivers for the stock market continue to be high inflation stateside and expectations of rate hikes by the Federal Reserve in the near future, as well as the conflict in East Ukraine.

Macro and geopolitics

Negative drivers for the stock market continue to be high inflation stateside and expectations of rate hikes by the Federal Reserve in the near future, as well as the conflict in East Ukraine.

Corporate news

TJX Cos. sank 4.2% on news that the owner of a chain of discount stores reported Q4 profit and revenue that fell short of the median consensus.

Virgin Galactic Holdings Inc. surged 3.5%. The company confirmed that it still aims to start sending tourists into space this year.

Papers Nucor Corp. dipped 0.6% after CFO Jim Frias announced that he will be stepping down after 12 years in office.

 

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