Stocks gain ground, oil prices fall as Ukraine tensions ease

NEW YORK — Stocks ended broadly higher on Wall Street Tuesday as investors welcomed signs that tensions might ease in Ukraine. The S&P 500 rose 1.6%, the tech-heavy Nasdaq rose 2.5%. and U.S. benchmark crude slid 3.6%. Moscow said some troops near Ukraine’s borders would begin returning to their bases, however U.S. President Joe Biden said that claim remains unverified. Bond yields rose after another indicator on inflation came in higher than expected. The yield on the 10-year Treasury rose to 2.05% after the government reported that inflation at the wholesale level surged 9.7% from a year earlier in January.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Stocks rose broadly in afternoon trading on Wall Street Tuesday as investors welcomed early signs that tensions appear to be easing in Ukraine.

The S&P 500 rose 1.4% as of 2:33 p.m. Eastern. Roughly 80% of stocks within the benchmark index notched gains. The Dow Jones Industrial Average rose 381 points, or 1.1%, to 34,947 and the Nasdaq rose 2%.

Technology stocks and companies that rely on consumer spending led the gains. Apple rose 1.8%, Ralph Lauren rose 4.9% and Nike rose 2.8%.

Smaller company stocks were outpacing the broader market. The Russell 2000 was up 2.7%.

Bond yields continued rising. The yield on the 10-year Treasury rose to 2.04% from 1.99% late Monday. The gains helped lift banks, which rely on higher bond yields to charge more lucrative interest rates on loans. JPMorgan Chase rose 1.8%.

Treasury yields have been gaining ground throughout 2022 as investors prepare for the Federal Reserve to start raising interest rates to fight inflation. The central bank is expected to start raising rates in March and traders see a 61% chance for a first hike of half a percentage point, double the traditional move.

U.S. benchmark crude oil prices slumped 3.5%. Oil prices have been volatile amid tensions over Russia potentially invading neighboring Ukraine. Some of that tension was relieved Tuesday after Russia said some troops would be returning to military bases, though it didn’t specifically say the troops pulling back were part of those amassed on Ukraine’s border.

Russia is a major energy producer and military action that disrupts supplies could jolt markets and global industries.

European markets, which have been sensitive to tensions between Russia and Ukraine, recovered some of their losses Tuesday after Russia said it was withdrawing some troops, however analysts noted that the rebound belied some skepticism.

“While this is an encouraging development, talk tends to be cheap and so far, there has been little evidence of that happening on the ground, which perhaps helps explain why today’s rebound has been cautious, relative to recent losses,’’ said Michael Hewson, chief market analyst at CMC Markets UK.

The concerns on Wall Street over the potential conflict were piled on to a long list of threats for the broader financial markets and global economy that include persistently rising inflation’s impact on businesses and consumers. A report from the Labor Department on Tuesday showed that wholesale inflation surged again in January, rising 9.7% from a year earlier.

“Today is clearly a rally on less geopolitical tensions and really ignoring the inflation picture,” said John Lynch, chief investment officer for Comerica Wealth Management.

Inflationary pressure is still gathering momentum, Lynch said, and that makes a half-percentage point hike from the Fed in March almost necessary to reinforce that the central bank is serious about fighting inflation.

Rising costs have been crimping operations for a wide range of businesses and prompting many to raise prices on finished goods from clothing to food. That has raised concerns that consumers could eventually pull back on spending, therefore hurting economic growth. Investors will get an update on retail sales on Wednesday when the Commerce Department releases its January report.

Investors also have their eye on the latest round of corporate earnings, including Airbnb late Tuesday, DoorDash on Wednesday and Walmart on Thursday.

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AP Business Writer Colleen Barry contributed from Milan.