Geoffrey Smith and Liz Moyer

Wall Street closed lower on Thursday morning in New York, after an abrupt rally following the Federal Reserve’s initial interest rate increase in more than three years.

The Dow was at 9:32 am ET and had fallen 126 points or 0.4%. It was also down 0.4% and 0.6% respectively. After the Fed increased rates by 25 basis point, the Dow gained 1.5% Wednesday. It also signaled that at least six additional quarter-point hikes would be possible over the next twelve months.

Markets had anticipated the hike for some time, but they chose instead to concentrate on the Fed’s accompanying economic forecasts, which indicated that tightening could continue without creating a recession.

The mood was also helped by reports that a comprehensive peace plan had been drafted in Russia and Ukraine. But, Thursday’s Kremlin statement that significant progress had not been made was “wrong”, and Russia angrily reacted to Wednesday’s declaration of President Joe Biden as a war criminal by calling Vladimir Putin “war criminal”. This comment came in response to reports about a Russian strike at a Mariupol theater that was being used for shelter by hundreds civilians.

Analysts warned against the “magical thinking,” both by the Fed as well as some market participants. Noting that even a peaceful settlement between Russia and Ukraine won’t remove the current headwinds, they cautioned.

Paul Donovan (chief economist at UBS Wealth Management), stated that it would not be prudent to presume that actions will follow words. However, there may be a return to pre-war status quo. “Sanctions are likely to be unwound slowly…There has been an irreparable break in how the world works.”

The busiest day of the week in U.S. economy data will be Thursday. Weekly results came in slightly under expectations at 214,000. The February readings were up 6.8%, but they fell 1.9%. It was up 6.8% and down 1.9% respectively, which is higher than the expectations of a reading at 15. 

Corporate news: Accenture (NYSE: )’s quarterly report contained guidance that exceeded expectations, a warning about Russian business loss, and Dollar General (NYSE 🙂 met or slightly exceeded estimates of profit and revenue. After the bell, FedEx (NYSE.) reports.

Oil prices are rebounding in commodity markets as the Kremlin has downplayed peace negotiations, while Saudi Arabia and United Arab Emirates rejected pleas by U.K. Prime Minster Boris Johnson to purchase more oil. Futures had risen 7.3% to $101.88 per barrel by 9:41 ET while they were at $105.47 per barrel.

At $1,9452 an troy ounce, they were up 1.7%

This article was originally published on 7:12 am ET. It has been updated