• US equities are higher for a fourth session, with the S&P 500 breaking to its highest levels since Russia invaded Ukraine.
• The index is trading in the 4430s, up 0.6% on the day and over 5.5% on the week.
• That would mark the best week of gains since November 2020.

US equities are on the front foot for a fourth successive session, with the S&P 500 breaking out to its highest levels since the day Russia initiated its invasion of Ukraine (on February 24) in the 4430s. The main US index is higher by about 0.6% on the day taking its weekly gain to more than 5.5% after a brief dip below 4200 was viewed as a buying opportunity for a second week running. That means the index is on course for its best weekly gains since November 2020. Crucially, the S&P 500 is no longer trading in “correction” territory as it was at the start of the week and is now only about 7.5% lower versus record highs printed at the start of the year.

The Nasdaq 100 index is up about 1.4% and on course to post weekly gains of about 7.5%, though remains about 15% below November’s record levels. The Dow was last up 0.25% and on course for weekly gains of just shy of 5.0%, taking it to within 6.5% of record levels printed at the start of the year. Strength in the equity space this week seemed initially to have been driven by optimism about alleged progress towards a Russo-Ukraine peace deal. Though the reporting in recent days on this has been much more mixed and conflicting, hope for a ceasefire remains and seems to be driving some optimism in the market.

Meanwhile, some traders might have been surprised by the way equities rallied in wake of a much more hawkish than expected Fed policy announcement on Wednesday, but, on reflection, investors seemed to take the view that a more aggressive stance regarding lifting rates is appropriate against the backdrop of high inflation and a tight labour market. So long as future hawkish Fed policy shifts are deemed as the appropriate policy to maximise long-term US growth prospects by investors, equities may continue to greet such announcements positively.

Moving on to Friday’s gains; traders attributed the strength to news that Russia had averted a historic default on a foreign bond payment. Other traders said the call between US President Joe Biden and Chinese President Xi Jinping was a positive for sentiment given both sides framed the discussion as constructive. The US is trying to persuade China not to provide military aid to the Russians, who have requested it.