NEW YORK (AP) — Rescuers marched through Wall Street on Friday, even as deadly attacks continued to rage in Ukraine. Stocks rose, oil fell, and investors turned away from gold and other traditional safe havens they favor when fear is high.
The S&P 500 was up 1.9% in afternoon trading, following a wild Thursday when the benchmark jumped from a 2.6% loss to a 1% gain, 5%. Stocks have swung wildly with uncertainty about how much The invasion of Russia will drive up inflation, especially oil and natural gas prices, and weigh on the global economy.
These big swings are likely to continue in the hours and weeks to come, with so much uncertainty not only about Ukraine but also about interest rates. the The Federal Reserve is caught in a delicate dance where it must raise interest rates enough to contain high inflation, but not so much as to cause a recession.
Friday morning, at least, the mood was calmer. A measure of fear on Wall Street, which shows how worried traders are about upcoming swings in stock prices, fell 11%. Gold fell 2.1% after rallying for weeks on concerns over Russia and Ukraine. Treasury yields remained relatively flat, signaling that investors were not rushing for safety as they had immediately after the Russian invasion.
Reports that Russia is ready to send a delegation to Belarus for talks with Ukrainian officials have helped somewhat. A US government report, meanwhile, showed that inflation last month was roughly in line with economists’ expectations, although it remained high. It also showed that the main driver of the US economy, consumer spending, has strengthened more than economists expected.
Economic reports may be enough to convince the Federal Reserve not to raise short-term rates next month by double their usual increase, at least for now, said Brian Jacobsen, senior investment strategist at Allspring Global Investments. It’s something some Fed officials had suggested, and it’s something investors generally fear because higher rates put downward pressure on all kinds of investments. Regardless of its size, the rate hike would be the first since 2018.
However, all of the newfound calm in global financial markets came amid Russia pushing its invasion of Ukraine to the outskirts of the capital on Friday after unleashing airstrikes on towns and military bases and sent troops and tanks from three sides in what amounts to the largest ground conflict in Europe since World War II.
The Dow Jones Industrial Average was up 758 points, or 2.3%, at 33,982 as of 12:54 p.m. Eastern Time. The Nasdaq composite rose 1% after swinging between modest gains and losses. A day earlier, it briefly fell more than 20% below its all-time high, before suddenly surging again.
Prices for everything from stocks to Bitcoin have swung wildly on uncertainty over Russia and Ukraine, but perhaps the brightest market spotlight has been oil and natural gas. Russia is one of the world’s largest producers of oil and gasand European consumers are particularly dependent on it.
Oil prices fell on both sides of the Atlantic, a day after briefly surging above $100 a barrel, on fears that conflict and upcoming sanctions could disrupt supplies. Benchmark U.S. crude slid 2.6% to $90.36 a barrel. Brent crude, the international standard, fell 2.3% to $93.06.
Announcing sanctions against Russia on Thursday that he called tough, President Joe Biden said he “will do everything in my power to limit the pain the American people are feeling at the gas pump. petrol”. This led to some relief that sanctions had been not as bad as they could have beenand lower oil prices helped push up inventories.
“We are not going to do anything that unintentionally disrupts the flow of energy, as the global economic recovery is still underway,” National Economic Council Deputy Director Daleep Singh said Thursday.
Stocks also rose across much of Europe and Asia on Friday, recouping some of their steep losses immediately after the Russian invasion. London’s FTSE 100 gained 3.9% while France’s CAC 40 rose 3.6% and Germany’s DAX 3.7%.
Market participants could bet the crisis could slow central bank action to calm inflation by raising interest rates and rolling back other support to pandemic-stricken economies, said Ipek Ozkardeskaya of Swissquote. Bank SA.
“But really, it’s about volatility, high volatility that results from a high-tension environment,” Ozkardeskaya wrote in a comment. “It is impossible to say which direction the market will take in the next five minutes.”
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AP Business Writer Yuri Kageyama contributed.
Stan Choe, The Associated Press
