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U.S. dollar hits 2-decade high, defense stocks gain as Russia escalates war

Yahoo Finance’s Ines Ferre joins the Live show to break down how stocks are moving in early trading.

Video Transcript

JULIE HYMAN: Yahoo Finance's Ines Ferre is over at the YFi Interactive watching the action today. What's going on?

INES FERRE: Yeah, Julie, and stocks are drifting higher. Of course, we do expect to see more fireworks today at 2:30 after Jerome Powell speaks. And also, sometimes the day after Fed day is where you see a lot of fireworks. But right now, we're looking at the Dow that's up about half of a percent. You've got the NASDAQ composite that's higher and the S&P 500 up about 6/10 of a percent.

You've got Treasury yields, which have paused their recent rally. So this is helping equities. So you're looking at the 10-year Treasury at 3.53, down about 4 basis points. Also, the US dollar index is at multi-decade highs. So this is putting a cap on how high equities are going because remember, we have seen recently that correlation where when the dollar goes higher, you're seeing equities go lower.

But today, a little bit of a different picture because you're looking at industrials, which are higher. And that's because of defense stocks. Those are higher. I'll get to that in just a second. But look at that. Industrials is the leader right now, followed by real estate, consumer staples. You've got energy that's in the green as well. The energy has seen bigger gains earlier this morning, paring back some of those gains.

Getting to where we're at with defense stocks, this has to do with the headline about Russia escalating the war in Ukraine. So we are watching defense stocks going higher. And I'm just going to pull up the chart here so you can see some of these gains. Lockheed Martin up more than 2%. You've got Northrop Grumman up also 3% and also as well as General Dynamics, Raytheon. You get the idea. I'm going to pull up, though, a year to date chart because you can see some of the year to date gains for these stocks, guys.

BRAD SMITH: Yahoo Finance's own Ines Ferre continuing to track on the defensive space as well here. Appreciate the breakdown this morning.