4.02pm: Equities end lower
US stocks closed with losses after the markets declined in the final hour of the trading session, as investors maintained caution about the ongoing Russia-Ukraine war.
At the closing, the Dow Jones Industrial Average lost 0.7% or 231 points, at 32,943, while the Nasdaq Composite plunged 2.2% at 12,844, and the S&P 500 shed 1.3% at 4,204.
This week, the Dow has lost about 1.5%, while the S&P 500 is down by almost 2.3%, and the Nasdaq is off by 2.8%.
12.05pm: Markets mixed amid geopolitical uncertainty
US stocks were mixed Friday, extending the volatility spell, as investors tried to build a rally on Russian President Vladimir Putin’s comments on progressing talks with Ukraine about key issues, while the White House moved to ban normal trade with Moscow.
At noon, the Dow Jones Industrial Average added 109 points, or 0.3%, at 33,283, while the Nasdaq Composite and the S&P 500 both declined, losing 0.9% and 0.2%, respectively.
US President Joe Biden Friday moved to suspend normal trade with Russia, tightening sanctions against the Kremin for its brutality against Ukraine. This will result in higher tariffs on Russian goods, and prohibit Russia to borrow from international institutions including the International Monetary Fund and the World Bank.
“It’s a strange world where markets rally on comments from the Russian president, but that’s what happened during the session today,” said Chris Beauchamp, chief market analyst at online trading platform IG. “Putin’s hints that negotiations might be showing some progress was enough to engender a rally across markets, although some of the optimism has been trimmed.”
There is as yet no sign of any real deal emerging and Russia’s previous aims still appear to be in place, so this rally might go the way of so many others of late, with markets still unable to find the foundations for a sustainable bounce, Beauchamp noted.
Next week, investors are expecting the Federal Reserve to announce a rate hike in measures to control inflationary pressures on the markets.
“With US headline inflation at 7.9%, and likely to go higher it’s pretty much certain that we will see an interest rate rise this week of 0.25%,” commented Michael Hewson, chief market analyst at CMC Markets UK. “There are some on the FOMC who are probably in the camp that want to see a 50bps rate rise, however in light of the Russian invasion of Ukraine and the resultant surge in global commodity prices we could well see a bit of caution.”
The Fed’s bigger problem is how it manages its messaging for future rate rises against a backdrop of surging input prices which are likely to slow the US economy over the course of the rest of the year, Hewson noted.
On the corporate front, shares of DocuSign tanked 22% after publishing its weak guidance for the first quarter and fiscal year.
Among the big tech companies, Meta Platforms plunged 3.7%, while Zoom Videos lost 3.8% o Friday.
10.05am: Markets jump after signs of progress in talks
US stocks made decent gains Friday morning amid signs of progress in talks between Russia and Ukraine after the Russian President, Vladimir Putin commented that “certain positive shifts” have occurred in the diplomatic discussions between the two war-torn countries.
At the open, the Dow Jones Industrial Average jumped 315 points or 0.1% at 33,489, while the Nasdaq Composite gained 0.4%, and the broader S&P 500 added 0.6%.
Despite the jump, the Dow is on its way to the fifth straight week of losses as the Russia-Ukraine war has continued to escalate.
“We were already seeing stock markets making cautious gains in morning trade but they were given a boost by comments from Vladimir Putin,” noted Craig Erlam, UK & EMEA, OANDA. “While I would love nothing more than to believe what he said to be true, I would caution that Putin has said a lot in recent weeks, almost all of which has been untrustworthy.”
On Friday, oil prices were trading flat, with Brent Crude Oil (LSE:BRENT) easing back to $109.93 a barrel, following Putin’s comments.
Erlam noted that the US and others are looking to strike agreements with sanctioned countries which will also help alleviate some of the pressures that have contributed to oil hitting levels that many consider recessionary if maintained.
6.30am: US stocks set for a modest rally
US stocks are set for a modest rally on Friday even as oil prices jump again, with markets staying volatile as investors eye developments from the Russian war on Ukraine.
Futures for the Dow Jones Industrial Average gained 0.2%, while those for the S&P 500 index and the tech-laden Nasdaq-100 both added 0.3%. All three major US indexes are on track for weekly losses of 1.3% or more.
Wall Street fell Thursday after cease-fire talks between Russia and Ukraine yielded little progress and data showed US inflation reached a four-decade high in February.
Global stock markets have continued to swing wildly this week, as investors have grown increasingly fearful that the war in Ukraine will stunt economic growth and keep inflation at multidecade highs.
Thursday’s US CPI data showed that inflation last month was largely driven by an increase in energy prices, and the data didn’t account for March, when oil prices have spiked amid the war in Ukraine.
On Friday, Brent crude futures rose 2% to near $112 a barrel, hovering close to their highest level in years, despite retreating in recent days.
The prospect of a boost in supply has helped assuage some fears about a supply crunch. Earlier this week, the United Arab Emirates said it would push the Organization of the Petroleum Exporting Countries to pump more oil.
Fast-changing sanctions imposed on Russia by the West have created uncertainty and discussions about a possible cease-fire have failed to advance an agreement on a deal to protect civilians in Ukraine
President Biden is expected to announce Friday that the US will join major allies and the European Union in calling to revoke normal trade relations with Russia. European Union leaders have already said they are ready to move quickly with further sanctions.