US stocks wobbled Friday and oil prices advanced, extending a volatile stretch for markets as investors assessed developments from the war in Ukraine.
The blue-chip Dow Jones Industrial Average rose 97 points, or 0.3%, in afternoon trading. The S&P 500 was down about 0.2%, while the Nasdaq Composite fell about 1%. Stock futures had turned higher after the Russian President
said in televised remarks that there had been positive developments during talks with Ukraine, even as Russian forces continue to pound Ukrainian cities.
Major indexes are on track to close the week lower, as volatility reigned and inflation fears heightened. The Dow industrials were recently down 1.1% for the week, which would mark its fifth consecutive weekly loss. The S&P 500 and Nasdaq Composite are on pace to lose 1.8% and 2.3%, respectively, for the week, which would cap the fourth weekly loss in the past five weeks for both indexes.
Big swings are now commonplace for major stock indexes, yet even by those standards this week’s jumps and falls have been extreme, some investors and traders said. On Monday, soaring oil prices sent stocks tumbling, with the S&P 500 posting its worst day in over a year. Two days later, the benchmark index jumped 2.6%, its biggest gain since 2020.
Next week could bring more choppiness. The Federal Reserve meets next Tuesday and Wednesday to vote on whether to raise the base interest rate and by how much. Fed-funds futures, used by traders to wager on interest-rate moves, see a 96% probability of a rate increase of 0.25 percentage point at next week’s meeting. A month ago, Fed-funds futures showed a 50% probability of a rate increase of 0.50 percentage point.
Among the worst performers this week: technology companies. The tech-heavy Nasdaq Composite entered bear market territory on Monday, defined as falling 20% from its recent high. Rising inflation has pressured tech stocks, traders said.
“Earnings growth expectations are slowing dramatically, and at the same time inflation is rampant. That means tech stocks that depend on big earnings growth are getting hit hard, ”said Dan Morgan, a senior portfolio manager at Synovus Trust Co., which owns shares of several tech heavyweights.
On Friday, Brent crude futures, the international oil benchmark, were up 2.7% at $ 112.28, having pared some gains after Mr. Putin’s comments. Oil prices are hovering near their highest level in years, despite retreating in recent days. Earlier this week, the United Arab Emirates said it would push the Organization of the Petroleum Exporting Countries to pump more oilhelping assuage some fears about a supply crunch.
The volatility has sent investors scrambling to rebalance portfolios. Investors in recent weeks have moved in and out of safer assets as news reports about the conflict have changed quickly. The ICE US Dollar index, for example, which measures the greenback against a basket of other currencies, lost 0.1% after Mr. Putin’s comments, erasing gains from earlier in the day.
Commodity prices are hot right now. But the prices investors are paying in the open market for commodities like coffee, copper or corn can have little to do with the price customers pay at the store. WSJ’s Dion Rabouin explains. Illustration: Adele Morgan
Meanwhile, the yield on the benchmark 10-year Treasury note also reversed course, rising to 2.015% Friday, from 2.008% Thursday. Yields climb when bond prices fall.
In New York trading, shares of
tumbled 20% after the software maker released softer-than-expected guidance.
In Europe, the pan-continental Stoxx Europe 600 added 1%, notching a 2.2% weekly gain. Germany’s DAX index jumped 1.4%, finishing the week ahead 4.1%
Shares of Italian aerospace manufacturer
and sportswear company Adidas were among the largest gainers in Europe, climbing 11% and 3.9%, respectively. Pearson jumped 18% after Apollo Global Management said it was evaluating a possible cash offer for the textbook publisher.
Russia’s stock market remained closed on Friday. In offshore trading, the ruble advanced against the greenback to trade at about 114 rubles per dollar. Assessing the price of the ruble has grown difficult since Russia imposed measures to stem the currency’s selloff and as Western banks have shunned Russian assets.
Investors are closely tracking the conflict. Meanwhile, fast-changing sanctions imposed on Russia by the West have clouded traders’ ability to forecast how trade and supply chains might be disrupted. President Biden said Friday that the US will join major allies and the European Union in moving to revoke normal trade relations with Russia.
Investors have grown increasingly fearful that the war will stunt global economic growth and keep inflation at multidecade highs. Thursday’s consumer-price index data in the US showed that inflation last month was largely driven by an increase in energy prices. The data did not account for March, when oil prices jumped.
Global stock markets have swung wildly this week.
Photo:
Allie Joseph / Associated Press
In Asia, stock markets were mixed, with Japan’s Nikkei 225 down about 2.1%, while Hong Kong’s Hang Seng Index fell 1.6% to close at its lowest level since July 2016. The Shanghai Composite, in contrast, added 0.4%. All three indexes ended lower on a weekly basis.
This came after the Securities and Exchange Commission provisionally named on Thursday five New York-listed Chinese companies, including Yum China Holdings and BeiGene, as firms whose audit working papers could not be inspected by US regulators. That prompted a sharp selloff in US-listed Chinese stocks, with the Nasdaq Golden Dragon China Index tumbling 10%.
—Alexander Osipovich contributed to this article.
Write to Caitlin McCabe at caitlin.mcca[email protected] and Corrie Driebusch at [email protected]
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