(Bloomberg) — Stocks rallied and haven trades fizzled on Tuesday amid optimism that geopolitical tensions in Ukraine may be easing.
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Europe’s Stoxx 600 and U.S. index futures climbed after Russia announced the start of a pullback of some forces after drills that raised U.S. and European alarm about a possible military assault on its neighbor.
Energy shares underperfomed as oil retreated from the highest since 2014 and natural gas prices dropped on a possible cooling in the crisis. Treasury yields advanced, while the dollar and gold fell. The ruble jumped.
Meanwhile, iron ore tumbled as China ramped up a campaign to stop prices overheating.
Among individual stock moves, Glencore Plc jumped to a 10-year high after saying it expects long-running corruption probes by U.S. and U.K. authorities to be resolved this year as the world’s biggest commodity trader reported its highest-ever profit and almost $4 billion in shareholder returns. Banco BPM SpA climbed to highest level since May 2016.
Diplomatic efforts are continuing, with German Chancellor Olaf Scholz set to meet Russian President Vladimir Putin a day after his visit to Ukraine. While U.S. officials have warned a Russian invasion may be imminent, Moscow has repeatedly denied that one is planned.
Markets have been whipsawed this week as the Ukraine crisis reached its most urgent level yet, adding to existing concerns over high inflation and the withdrawal of stimulus by the Federal Reserve. Fed officials came out with another round of views on the policy outlook on Monday.
“What we are seeing is a Fed that is reacting to inflationary prints even though many of the pressures on inflation are factors that the Fed really can’t solve,” Kristina Hooper, chief global market strategist at Invesco, said on Bloomberg Television. “So that certainly increases the risks and reduces the clarity.”
Here are some key events this week:
U.S. PPI, Tuesday
EIA crude oil inventory report, Wednesday
FOMC minutes, Wednesday
China CPI, PPI, Wednesday
G-20 finance ministers, central bank…