May 23, 2022

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US stocks mixed after Putin claimed progress in Ukraine talks

US stocks mixed after Putin claimed progress in Ukraine talks

Technology stocks extended their declines on Friday, dragging broader indicators towards weekly losses, as volatility prevailed and inflation fears increased.

Stocks opened higher, as traders bought shares after the Russian president Russian President Vladimir Putin He said in televised statements that there were positive developments during the talks with Ukraine, even with the Russian forces Continue pound Ukrainian cities. By the afternoon, stock losses accelerated, with the S&P 500 and Nasdaq composite index firmly in the red and the Dow Jones Industrial Average briefly turning negative, as investors weigh the risks of heading into stock holdings at the weekend.

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Russian President Vladimir Putin

Markets react to that. “Everyone is on edge,” said Joseph Amato, chief equity investment officer at Neuberger Berman Group LLC. He said that the market is ready to rebound if the severity of the crisis subsides, and at the same time, the markets could be more volatile and prices would fall back if the crisis worsened.

The Dow Jones Industrial Average rose 90 points, or 0.3%, in afternoon trading. The S&P 500 was down about 0.2%, while the Nasdaq Composite was down 0.9% as technology stocks extended their weekly declines.

All three indices are on track to finish lower, with the Dow Jones Industrial Average set to close 1% lower for the week, which would be its fifth consecutive weekly loss. The S&P 500 and Nasdaq Composite are running at a loss of 1.8% and 2.2%, respectively for the week, which would cover the fourth weekly loss in the past five weeks for both indices.

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Some investors and traders said that big swings are now common for major stock indices, but even by those standards the jumps and falls this week have been extreme. On Monday, higher oil prices sent stocks lower, with the S&P 500 index posting its worst day in more than a year. Two days later, the benchmark index jumped 2.6 percent, its biggest gain since 2020.

Next week could bring more volatility. The Federal Reserve meets next Tuesday and Wednesday to vote on Whether the base rate will be raised And with you. Federal Reserve Fund futures contracts, which traders use to bet on interest rate movements, have a 96% probability of a 0.25 percentage point rate increase at the meeting. A month ago, Fed fund futures showed a 50% chance of a 0.50 percentage point rate increase.

Investors and traders say they are also preparing for more Western sanctions against Russia. President Biden said Friday that the United States will join key allies and the European Union in moving to The abolition of normal trade relations with Russia.

Mr. Amato said one of his biggest concerns is how the crisis in Europe could slow global economic growth and maintain inflation At multi-decade heights. Thursday’s US Consumer Price Index data showed that inflation last month was largely driven by Energy price increase. The data was not taken into account for March, when oil prices jumped.

Among the worst performers this week: technology companies. The high-tech Nasdaq Composite entered bear market territory on Monday, which is defined as having fallen 20% from its recent high. Traders said rising inflation pressured technology stocks.

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It fell 22% after the software maker issued softer-than-expected guidance.

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Shares rose 3.6% after it reported that revenue from the cloud business jumped 24% from a year earlier.

“Earnings growth expectations are slowing dramatically, while inflation is rampant. At the same time, inflation is rampant,” said Dan Morgan, senior portfolio manager at Synovus Trust Co., which owns shares in several tech heavyweights. On the growth of large profits severely affected.

Energy companies came into prominence this week, with the only sector in the S&P 500 on track to end the week on a positive note, rising alongside the price of oil. On Friday, Brent crude futures, the international oil standard, rose 2.4% to $108.56, after paring some gains after Putin’s comments. Oil prices are hovering near their highest level in years, although they have eased in recent days. Earlier this week, the United Arab Emirates said it would put pressure on the Organization of the Petroleum Exporting Countries (OPEC). To pump more oilhelping to allay some concerns about the supply crisis.

The volatility prompted investors to scramble to rebalance portfolios. In recent weeks, investors have moved in and out of safer assets as news reports about the conflict have changed rapidly. For example, the ICE US Dollar Index, which measures the US currency against a basket of other currencies, lost 0.1% after Mr. Putin’s comments, erasing the gains made earlier in the day.

Commodity prices are hot now. But the prices that investors pay in the open market for commodities like coffee, copper or corn have nothing to do with the price customers pay in the store. WSJ’s Dion Rabouin explains. Illustration: Adele Morgan

Meanwhile, the yield on the benchmark 10-year Treasury also reversed course, rising to 2.015% on Friday from 2.008% on Thursday. Yields rise when bond prices fall.

In Europe, the Stoxx Europe 600 Continental Index rose 0.9%, posting a weekly gain of 2.2%. Germany’s DAX jumped 1.4%, ending the week ahead 4.1%.

The Russian stock market remained closed on Friday. In foreign trade, the ruble rose against the dollar to trade at around 114 rubles per dollar. evaluation ruble price It has become difficult since Russia imposed measures to stop the sale of currency etc. Western banks shun Russian assets.

Global stock markets have swung wildly this week.


Photo:

Allie Joseph/The Associated Press

In Asia, stock markets were mixed, with Japan’s Nikkei 225 down 2.1%, while Hong Kong’s Hang Seng fell 1.6% to close at its lowest level since July 2016. In contrast, the Shanghai Composite added 0.4%. The three indices closed lower on a weekly basis.

This came after the Securities and Exchange Commission Temporarily named On Thursday, five Chinese companies listed in New York, including Yum China Holdings and BeiGene, as companies whose audit worksheets cannot be examined by US regulators. This led to a sharp sell-off in US-listed Chinese stocks, with the Nasdaq China Gold Dragon down 10%.

Alexander Osipovich contributed to this article.

Write to Caitlin McCabe at [email protected] and Corrie Driebusch at [email protected]

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