US: Stocks rally on pullback in oil prices

[NEW YORK] Wall Street stocks surged on Tuesday following another steep drop in crude prices as the Federal Reserve kicked off a closely-watched policy meeting.

Brent oil futures finished under US$100 a barrel for the first time in nearly three weeks, tumbling mainly on worries about weakened Chinese demand due to fresh Covid-19 restrictions.

"The market is breathing a big sigh of relief that commodities prices - mainly food and energy, oil and grains prices - are coming down," said Adam Sarhan of 50 Park Investments.

"At the same time, you have bargain hunters showing up," Sarhan said. "We are oversold and the market is due for a nice rally."

The Dow Jones Industrial Average finished up 1.8 per cent at 33,544.34 The broad-based S&P 500 gained 2.1 per cent to 4,262.45, while the tech-rich Nasdaq Composite Index leaped 2.9 per cent to 12,948.62.

US producer price increases remained elevated in February but came in at 0.8 per cent, a bit below expectations. Still, the Fed is expected to begin a series of interest rate increases on Wednesday to curb inflation.

US air carriers were standouts, with American Airlines and Delta Air Lines both up more than 8 per cent after lifting their revenue forecasts in light of recovering demand following the latest Covid-19 wave in the country.

But petroleum-linked equities - which have had a banner performance for much of 2022 - suffered, with Chevron losing 5 per cent and Halliburton dropping 4.3 per cent.

AMC Entertainment jumped 6.9 per cent after announcing a US$28 million investment in Hycroft Mining Holding Corporation in a diversification bet away from movie theatres. Hycroft soared 9.4 per cent. AFP