Stocks rallied, erasing losses in a volatile week.

Investors ignored Russia’s invasion of Ukraine to focus on the good news on Friday: that President Vladimir V. Putin could enter talks with his Ukrainian counterpart. That hope boosted stocks, and the S&P 500 ended a roller-coaster week with gains.

The S&P 500 index rose 2.2%, its best day in nearly a month, taking it to a 0.8 percent gain for the week after two consecutive weeks of losses. New data released on Friday shows a key inflation gauge hit a new 40-year high in January Nor does it discourage investors.

Friday’s gain echoes trading in Europe and Asia after Kremlin says Putin is ready talks with Ukraine – although the President of Russia has since hinted that he does not seriously plan to join them. The Nikkei in Japan closed nearly 2% higher and the Stoxx Europe 600 gained more than 3%.

“Stocks are “a purely sentimental market right now,” said Ross Mayfield, an investment strategist at Robert W. Baird in Louisville, Ky. ”

Oil prices continue to fluctuate. Brent crude, the international standard, fell 1.2% to $97.93 a barrel, recovering from a previous 2% drop. Oil climbed as high as $105 a barrel on Thursday, then fell back below $100 after President Biden said the US was working with other countries to coordinate freeing up supplies from petroleum reserves. West Texas Intermediate, the benchmark US crude, also fell to $91.59 a barrel on Friday.

Markets have been rattled for weeks by the prospect of war in Ukraine, with two straight weeks of losses. Last week, investors sold their shares entered the holiday weekend as the US issued dire warnings that an invasion could be imminent, resulting in a 2.8% drop in two days.

Stocks fell on Tuesday and Wednesday as Putin sent troops into two breakaway regions of Ukraine and the West began to announce sanctions on Russia. On Thursday, the S&P 500 began to plummet after Russia began air strikes on major Ukrainian cities, but it eventually narrowed its initial losses and closed with a gain of 1, 5%.

Investors have grappled with the potential impact of the invasion on regional air travel, banking in Europe and raging global inflation, among other worries. Those concerns have helped push the S&P 500 and Stoxx Europe 600 down more than 7% so far this year — their worst since the start of the coronavirus pandemic in early 2020.

The potential for talks between Russia and Ukraine helped lift the bank’s stock index 4% on Friday, cutting a five-day slide. Aviation shares also rebounded. Shares of Delta Air Lines and American Airlines were up 3%.

The recent rise in energy prices is sure to exacerbate inflation, which has plagued policymakers and stock investors around the world. Central banks such as Federal Reserve pledges to raise interest rates to cool the economy, but conflict could also hurt growth (a reason not to raise rates), adding uncertainty to the outlook for both prices and the economy for the investors.

“The implications of the ongoing situation in Ukraine on the medium-term economic outlook in the United States will also be considered in determining the appropriate pace for displacement,” said Loretta J. Mester, president of the Bank Federal Reserve Bank of Cleveland, said in a statement on Thursday.

Sanctions will also spread across the global economy. On Thursday, Mr. Biden said the US would cut off the biggest banks of Russia and the largest companies from Western financial markets and technology export restrictions to Russia. He also said the United States is freezing trillions of dollars in Russian assets, including funds controlled by Russian elites and their families. European leaders agreed next Friday another round of sanctions targeting the Russian economy and Putin himself. Western powers still have room to impose harsher economic penalties should the conflict escalate further.

Kristina Hooper, director of global market strategy at Invesco, said the fighting in Ukraine has fueled short-term volatility, but the long-term economic impact on US investors could be tempered. more than.

“Many investors look at this from a historical perspective and admit, while conflicts can be terrible in human terms, they often have no real impact” on markets and the economy, she said. economy. Stocks rallied, erasing losses in a volatile week.

Fry Electronics Team

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