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U.S. stocks fell and oil prices jumped, as concerns about rising energy prices and supply shortages rattled investors once again.

The S&P 500 and Dow Jones Industrial Average ticked down 0.6% and 0.5%, respectively, in early trading Wednesday. The tech-focused Nasdaq Composite Index lost 0.9%. Major U.S. stock indexes jumped Tuesday, as investors shrugged off worries that inflation will push the nation’s economy into a recession.

On Wednesday, however, some of that confidence among investors faded after Brent crude, the international benchmark, moved higher again. Futures on Brent crude recently traded at $120.32 a barrel, up 4.2%. Earlier in the session, futures for U.S. stock indexes wavered and then ticked lower. But losses deepened as oil prices jumped. 

Oil prices rose after Russia said on Tuesday that oil exports via a pipeline from Kazakhstan to the Black Sea may temporarily fall by around 1 million barrels a day—representing about 1% of global oil demand—citing storm damage. Repairs could take up to two months, Russian officials said.

“Things will stay highly sensitive to the events unfolding in Ukraine,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, noting that sharp moves in energy prices will continue to weigh heavily on indexes. “There is still real pressure on oil prices that is adding to inflationary concerns.”

A sharp rally in U.S. government bond yields slowed. The yield on the 10-year U.S. Treasury note edged lower to 2.356% in recent trading, from 2.375% the day before. Yields on U.S. government bonds zoomed higher this week after Federal Reserve Chairman Jerome Powell said the central bank was prepared to raise interest rates in half-percentage-point steps if needed to tame inflation. Yields climb when bond prices fall.

Russia’s stock market is set to have a partial reopening Thursday, almost a month after it shuttered trading following the country’s invasion of Ukraine. Investors and analysts expect that the reopening could send Russian stocks into freefall.

In recent days, global markets seemed to have turned a corner, despite anxieties about mounting inflation and the war in Ukraine. The S&P 500 has advanced 1% or more in five of the last six sessions, bringing it up 8.1% over that period and erasing all of the losses the benchmark index has seen since Russia invaded Ukraine. Major indexes in Europe and Asia have seen similar moves. 

The recent rally has come even as Russia’s attacks on Ukraine intensify, Western countries continue to pile on sanctions and pricing pressures show no signs of abating. On Wednesday, fresh data on inflation showed that consumer prices in the U.K. rose 6.2% in February compared with a year earlier, up from 5.5% in January, marking the highest rate since March 1992. 

In European markets, the Stoxx Europe 600 lost 1.1% in recent trading, erasing earlier gains once oil prices moved solidly higher. London’s FTSE 100 nudged down 0.1%. European oil giants Shell and BP each rose 3.3% or more.

In early trading in New York,  shares of energy companies also moved higher. Occidental Petroleum, Exxon Mobil and Chevron each gained 0.8% or more.

Meanwhile, shares of meme stocks—which have largely slumped this year—enjoyed a resurgence. Shares of GameStop climbed 5.3% after the company’s chairman, Ryan Cohen, disclosed his firm bought 100,000 shares of the company’s stock on Tuesday. Shares of AMC Entertainment Holdings, which tend to move in correlation with GameStop, climbed 4.9%.

Traders worked on the floor of the New York Stock Exchange on Tuesday.

Photo: BRENDAN MCDERMID/REUTERS

Shares of Adobe slumped 7.3%. The software company reported higher profit and better-than-expected revenue growth Tuesday, but said it expects a hit to annual revenue from the war in Ukraine.

In European bond markets, the yield on the benchmark 10-year German bund traded around 0.497% after topping 0.5% this week. The last time it traded around that level was the fall of 2018.

Other signs emerged Wednesday that investors were eyeing assets they perceive as safer. The ICE U.S. Dollar index, which tracks the currency against a basket of others, rose 0.2% in recent trading. Gold prices advanced 0.4%. 

In Asia, major indexes finished higher. Hong Kong’s Hang Seng gained 1.2%, while Japan’s Nikkei 225 jumped 3%. China’s Shanghai Composite advanced 0.3%.

—Georgi Kantchev contributed to this article.

Write to Caitlin McCabe at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source: WSJ

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