Shares Decline amid Negotiations Between Russia and Ukraine

On Wednesday, key stock market indexes declined after strong gains on Tuesday, as progress in talks between Russia and Ukraine did not lead to an easing of shelling around Kyiv.

U.S. equities edged lower in early trading on Wednesday (at the time of writing), after seeing strong gains the day before with the S&P 500 up 1.23%, the Nasdaq Composite up 1.84% and the Dow Jones adding 0.97 %.

Overall, the market has recovered strongly over the past two weeks as investor concerns about a possible recession in the US eased and private sector employment data beat economists' forecasts. The S&P 500, Nasdaq Composite, and Dow Jones indexes rose by 5.9%, 6.3%, and 4% respectively over the last month. 

The gradual tightening of the Fed's monetary policy and the first hike in interest rates on March 16 is aimed at curbing rising inflation, with commodity and oil prices lowered in recent weeks. 

However, the lack of progress in negotiations to end Russia's war in Ukraine dampened investor optimism. The war undermines forecasts for the growth of international trade, pushes up energy prices and crops, undermining the recovery of global GDP after the impact of the COVID-19 pandemic. 

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No signs of agreements, no ceasefire in Ukraine

The promises of Russian diplomats at talks with the Ukrainian side in Turkey on Tuesday to "fundamentally" reduce offensive operations in Ukraine were not fulfilled. Russian troops continued shelling areas around Kyiv and other Ukrainian cities. The parties voiced their demands, but there were no significant “breakthroughs” in the agreements.

Pentagon spokesman John Kirby said that now in Ukraine there is simply a movement of Russian troops to the east, and not a real withdrawal and reduction of attacks.

Secretary of State Anthony Blinken on Tuesday said the US sees no signs that ceasefire talks between Ukraine and Russia are moving forward.

Ukrainian diplomats have expressed their desire to conclude an international agreement, according to which other countries will guarantee the security of Ukraine, similar to Article 5 of NATO, where an attack on one member country is considered an attack on all members. 

The head of the Ukrainian delegation at the talks with the Russian Federation, deputy from the presidential faction Servant of the People David Arakhamia said that the member states of the UN Security Council - the United States, Great Britain, China, Russia, and France, as well as other countries such as Turkey, can be guarantor countries. Canada, Germany, Italy, Poland, and Israel. 

The signing of a peace treaty is possible only after the withdrawal of Russian troops, it will not include the Donbass or Crimea, its provisions must first be approved in a referendum by the Ukrainians, and then ratified by the parliaments of Ukraine and the guarantor countries.

During peace talks between Ukrainian and Russian officials in Istanbul, US President Joe Biden held telephone conversations with British Prime Minister Boris Johnson, German Chancellor Olaf Scholz, French President Emmanuel Macron and Italian Prime Minister Mario Draghi. The leaders of the countries discussed efforts to contain the Russian economy and provide military and humanitarian assistance to Ukraine.

Since the beginning of the invasion of Ukraine on February 24, Russian troops have killed at least 1,189 civilians and wounded 1,901, according to the UN. Ukrainian Human Rights Ombudsman Lyudmila Denisova said on Tuesday that 144 children were killed in the war and another 220 were injured.

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