NEW YORK (AP) — Stocks gave up early gains and closed broadly lower on Friday, capping a turbulent week of trading on Wall Street as uncertainty over the war in Ukraine and soaring inflation continue to rattle the steps.
The S&P 500 fell 1.3% after rising 0.7% at the start. The benchmark index marked its fourth losing week in the past five, although it surged mid-week and had its best day since the summer of 2020. The Dow Jones Industrial Average fell 0, 7% and the Nasdaq composite of 2.2%. Both also posted a weekly loss.
European equities fared better, closing strongly higher. Oil prices ended up 3.1% after flip-flopping earlier.
The moves are the latest swings in global markets, which have been rocked by dramatic hour-to-hour reversals in recent weeks as investors struggle to guess how The Russian invasion of Ukraine will send prices for oil, wheat and other commodities produced in the region. This increases the risk that the economy will struggle with a toxic combination of persistently high inflation and stagnant growth. The Federal Reserve is expected to raise interest rates at its meeting next week.
Despite some positive moves in stocks early on Friday, uncertainty over further developments in the Ukraine conflict and what the Fed will do likely kept investors in a sell-off mood heading into the weekend, investment strategist Willie Delwiche said. at All Star Charts.
“It’s still a headline-driven market,” Delwiche said. “We’re in this environment where you get these exaggerated daily fluctuations, but you don’t make any progress.”
Early Friday, before Wall Street opened, the pendulum swung towards optimism. European stocks and US stock futures rose sharply after Russian President Vladimir Putin’s comments that some analysts deemed surprisingly upbeat. Putin cited “some positive developments” in negotiations with Ukraine, although he gave no details.
The S&P 500 opened with a 0.7% gain, but quickly turned to a loss after a reading on US consumer sentiment fell more than economists expected. Households expect high inflation to continue in the short term, causing unease. The S&P ended down 55.21 points at 4,204.31.
The Dow fell 229.88 points to 32,944.19, while the Nasdaq fell 286.15 points to 12,843.81 after losing an early gain of 0.8%. The Russell 2000 Small Business Index fell 32 points, or 1.6%, to 1,979.67.
Further swings are likely for the markets due to continued uncertainty regarding the war in Ukraine and inflation. President Joe Biden announced on Friday that together with the European Union and the Group of Seven countries, the US to revoke ‘most favored nation’ trade status for Russia. This decision authorizes customs duties on Russian imports.
Amid all the uncertainty, US stocks remain around 10% below their peak from earlier this year, while crude oil prices remain more than 40% higher for 2022 so far.
A barrel of US crude oil rose 3.1% to settle at $109.33. It briefly topped $130 earlier this week. Prices have fluctuated as concerns over disrupted supplies clash with hopes for peace and the possibility that countries other than Russia could increase production. Brent, the international standard, rose 3.1% to settle at $112.67 a barrel.
Markets were already jittery ahead of Russia’s invasion as central banks are poised to raise interest rates and remove post-pandemic support for the economy. The Federal Reserve and other central banks are hoping to stamp out the highest inflation in generations, though they also risk triggering a recession if they raise rates too high or too quickly.
The Federal Reserve is widely expected to raise its key short-term interest rate by a quarter of a percentage point next week, which would be the first increase since 2018. The 10-year Treasury yield is recovered to around 2% to get back to where it was in February, before concerns over the war in Ukraine pushed it down below 1.70%.
Inflation has risen enough that politicians around the world know they could be in trouble because of it.
Brazil’s state-owned oil company Petrobras hiked the prices of fuel sold to its distributors by up to 25% on Friday, citing the war between Russia and Ukraine, as official data showed inflation accelerating in February .
The company said in a statement announcing the increase the day before that for weeks it refrained from passing on costs, but persistently high oil prices forced the adjustment to ensure supply to the Brazilian market.
In the United States, a report released on Thursday showed consumer-level prices jumped 7.9% last month from a year earlier, the highest rate of inflation since 1982. It is likely to get worse in the short term due to the post-war oil boom and all the financial sanctions imposed by the US and its allies on Russia.
Biden has said he wants to limit the economic pain of American households, but acknowledged that “standing up for freedom” comes at a cost.
AP writers David Biller, Elaine Kurtenbach and Damian J. Troise contributed. Veiga reported from Los Angeles.
Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.