Stocks fall and investors seek safety as war in Ukraine rages

Stocks fell on Friday, with European indices hitting their lowest point in about a year, as fighting intensified in Ukraine and governme...


Stocks fell on Friday, with European indices hitting their lowest point in about a year, as fighting intensified in Ukraine and government officials accused Russia of bombing The largest nuclear power plant in Europestarting a fire which was later extinguished.

On Wall Street, the S&P 500 fell 0.8% even after a stronger than expected jobs report for February. Treasuries rose as investors sought safe investments; the 10-year bond yield fell about 11 basis points to around 1.74%.

Equities in Europe were hit harder, with the Stoxx Europe 600 falling 3.6% to its lowest level since March 2021. Germany’s DAX fell 4.4%.

Stocks have zigzagged in recent weeks as tension in Ukraine escalated and sanctions against Russia, imposed in the days following its invasion of Ukraine, mounted. Several large explosions rocked the Ukrainian capital, Kyiv, on Friday, and thousands of people rushed to escape the conflict.

Western countries’ financial sanctions have included the freezing of hundreds of billions of dollars of Russian assets and the making of many types of foreign investment in the country. extremely difficult. A series of Western companies have also pulled out of Russia: Apple, Ikea and TJX, the owner of TJ Maxx and Marshalls, said they have halted business there. Energy companies, including TotalEnergies, BP and Shellalso said they would withdraw from their oil projects with the country.

The financial impact was most evident in European markets and global commodities. Germany’s DAX index has lost more than 10% this week and is down almost 20% from its early January high. Investors pulled $6.7 billion out of European stocks this week, Bank of America said. It’s the biggest release since at least 2004, when the bank started tracking data.

Wall Street fared better but the S&P 500 ended the week down 1.3%.

In Moscow, the Russian stock exchange remained closed for the fifth consecutive day on Friday. Russian stocks traded in other countries crashed, and in some places their trading was halted altogether. On Friday, the New York Stock Exchange announced that it had halted trading in three Russia-focused exchange-traded funds, including the MSCI Russia ETF.

Russia and Ukraine are major producers of several key commodities, so the escalating conflict has pushed prices higher as buyers fear supply shortages. The price of Brent crude oil has gained around 21% this week and was trading at around $118 a barrel on Friday; palladium, a key metal used in the automotive industry, rose about 25%; and wheat increased by more than 40%.

“Markets appear to be stuck between a rock and a hard place with higher inflation, impending rate hikes and growing fears of the Russia-Ukraine conflict,” said Anu Gaggar, global investment strategist for Commonwealth. FinancialNetwork. “Markets are still trying to gauge the ripple effects of this conflict on the economy, leading to greater volatility.”

In the United States, the average price of a gallon of regular gasoline jumped 11 cents on Friday to $3.83, the biggest one-day rise since 2005, when Hurricane Katrina hit oil fields in the Gulf of Mexico and closed refineries. Over the past week, the price has risen 26 cents to $3.57 a gallon as traders feared Russian oil exports could be blocked. A year ago the price was $2.75.

The release of a solid job number in the United States was not enough to stop the sell-off on Friday. The government said US employers created 678,000 jobs last month, a continuation of the rapid rebound in the labor market. The report also showed that the unemployment rate fell to 3.8%.

The report comes as the Federal Reserve prepares to withdraw economic support and raise interest rates this year in a bid to control inflation. The February jobs report also showed that wage growth came flat after a series of rapid increases, which is good news for the Fed and economists who worry about the start of an inflationary spiral in which wage and price increases push each other higher.

Between the flat wage growth figure and uncertainty over the ripple effects of the conflict in Ukraine, “there is less pressure on the Fed to accelerate rate hikes,” Gaggar said. Central bank chairman Jerome H. Powell said interest rates would rise a quarter point later this month.

The approach the Fed could take moving forward was echoed by Charles Evans, president of the Federal Reserve Bank of Chicago, on CNBC on Friday. Mr Evans said the jobs report ‘doesn’t change what Chairman Powell was sort of prepositioning for the Fed the other day’.

Next week, investors will be watching for the release of the Consumer Price Index, a closely watched indicator of inflation released by the Department of Labor. The January forecast beat analyst forecasts and showed prices jumped 7.5% on the year and 0.6% from the previous month.

Jeanna Smialek and Clifford Krauss contributed report.

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Newsrust - US Top News: Stocks fall and investors seek safety as war in Ukraine rages
Stocks fall and investors seek safety as war in Ukraine rages
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