US open: Dow Jones up more than 600 points as commodity prices ease
Major indices were firmly in the green early on Wednesday as commodity prices eased and Chinese leader Xi Jinping asked France and Germany to help support peace talks between Russia and Ukraine.
As of 1525 GMT, the Dow Jones Industrial Average was up 1.96% at 33,272.67, while the S&P 500 was 2.15% firmer at 4,260.30 and the Nasdaq Composite came out the gate 2.69% stronger at 13,139.13.
The Dow opened 640.03 points higher on Wednesday, reversing losses recorded in the previous session after president Joe Biden banned the importation of Russian oil into the US after oil hit a 13-year high of $130 to start the week.
Early on Wednesday, US oil benchmark West Texas Intermediate crude was down 5.0% to $117.51 a barrel, while Brent crude fell 5.26% to $121.25 after hitting $124.63 and $128.75 per barrel, respectively, at the end of the previous session.
However, the yield on the benchmark 10-year note rose to 1.918% as market participants continued to focus on the overall trend of rising inflation.
Turning to the Russia-Ukraine conflict, China's President Xi Jinping called for "maximum restraint" and said Beijing was "pained to see the flames of war reignited in Europe".
Xi told French President Emmanuel Macron and German Chancellor Olaf Scholz on Tuesday that the three countries should jointly support peace talks between Russia and Ukraine, according to state broadcaster CCTV. The Chinese leader was also said to have described the situation in Ukraine as "deeply worrying" and that the priority should be preventing it from escalating or "spinning out of control".
However, China has still refused to publicly condemn Russia's attack on Ukraine or even refer to it as an invasion and has previously voiced opposition to what it has branded as illegal sanctions against Moscow.
On the macro front, US mortgage applications jumped 8.5% in the week ended 4 March for their first rise in five weeks, with Americans taking advantage of a drop in mortgage rates, according to the Mortgage Bankers Association.
"Mortgage rates dropped for the first time in 12 weeks, as the war in Ukraine spurred an investor flight to quality, which pushed US Treasury yields lower. Looking ahead, the potential for higher inflation amidst disruptions in oil and other commodity flows will likely lead to a period of volatility in rates as these effects work against each other”, said MBA economist Joel Kan.
Elsewhere, the number of job openings in the US increased to 11.3m in January from 10.92m in December 2021, according to the Bureau of Labor Statistics' monthly JOLTs job report. Hires and total separations were little changed at 6.5m and 6.1m, respectively. However, job openings decreased in several industries, with the largest decrease in accommodation and food services. Job openings increased in the "other services" and durable goods manufacturing categories.
In the corporate space, Campbell Soup matched estimates with adjusted quarterly earnings per share of $0.69 each but said sales had fallen on labour and supply constraints.
Carnival and United Air Lines both traded higher at the open amid a solid performance among travel stocks, while Nike and Starbucks also recorded solid gains as fears that higher gas prices would dent consumer spending seemingly disappeared.