Stocks were falling on Friday as investors kept a close eye on developments between Russian and Ukraine.
By late morning, the
Dow Jones Industrial Average
fell 221 points or 0.5%, while the
dropped 0.7%. The
was down 1.3%. All three indexes were flickering between up and down earlier in the morning.
The good news: there was diplomatic progress on the Russia-Ukraine front. U.S. Secretary of State Antony Blinken and Russian foreign minister Sergei Lavrov are set to meet next week. President Joe Biden will also communicate with allies.
The bad news: Russian President Vladimir Putin said the situation is “deteriorating” at a press conference Friday. Plus, shelling intensified in Ukraine according to a report in The Wall Street Journal. And Thursday, U.S. Secretary of State Antony Blinken told the United Nations Security Council that Russia is likely to invade Ukraine within the next few days.
This comes after the stock market dropped Thursday, with the S&P 500 and Nasdaq falling more than 2% and the Dow seeing its worst day of the year, as news emerged that Russia was still building up troops near Ukraine. War is never good, and one of the concerns is that Russia, one of the world’s largest oil producers, will see its supply disrupted, by sanctions or otherwise. That would cause oil prices to spike, hurting a consumer that is already struggling with inflation.
The price of WTI crude oil fell 0.5% Friday to below $92 a barrel. It’s still up about 20% for the year, but it’s now down from its recent high of $95.82. Importantly, buyers have stepped in at $89 a barrel in light of the Russia issue.
The move down in oil Friday, though, is partly because markets have been in risk-off mode; market participants have been moving into safer assets to ride out the volatility in riskier assets like stocks and oil contracts. The price of the 10-year Treasury bond rose, sending the yield down to 1.93% from a Thursday close of 1.96% and down from its pandemic-era peak of 2%.
Markets are still far from an all-clear signal.
“We could still see some risk aversion creeping in as we near the close [Friday], given how quickly these situations can change,” wrote Craig Erlam, senior market analyst at Oanda.
In any event, equity and oil prices could easily bounce around—seemingly indecisively—until the Fed releases its interest rate decision in mid-March. Markets are expecting one or two rate hikes, but will also be listening for cues on how many rate increases are coming later on this year.
With the Fed risks well understood at this point, “the Russia-Ukraine situation may continue to dominate the narrative for now,” wrote Jonas Goltermann, senior markets economist at Capital Economics.
Overseas, the pan-European
ticked down 0.7%. In Asia, Hong Kong’s
Hang Seng Index
closed out the week with a daily loss of 1.9%, with bourses in the region taking cues from Wall Street’s dismal Thursday trading.
Here are five stocks on the move Friday:
(DKNG) stock was falling 16% after the company reported a loss of 35 cents a share, better than the estimate of an 81 cent loss, on sales of $473 million, above expectations for $446 million.
(FSLY) stock gained 0.6% after getting upgraded to Strong Buy from Outperform at Raymond James.
Tencent Music Entertainment Group
(TME) stock fell 5.6% after getting downgraded to to Sell from Neutral at Goldman Sachs.