Rising geopolitical tensions weighed on stocks and bond yields on Thursday, erasing gains from the major indexes for the week.
The S&P 500 Index is down 2.1%, while the Dow Jones Industrial Average is down 1.8%. The technology-focused Nasdaq Composite was down 2.9%.
The losses were widespread, with nine out of the 11 S&P 500 groups declining. The S&P, Dow and Nasdaq indices are now on track to post weekly losses.
Stocks have come under pressure from escalating tensions between Russia and Western allies over Ukraine. The White House has warned that a Russian invasion may be imminent, and diplomatic efforts so far have been inconclusive.
The developments sent stocks lower over the course of the week. Moscow said I pulled some troops, This led to a price hike in the markets earlier in the week. Western officials said Wednesday that Russia was in fact continuing its military build-up.
“We have to focus more on what is being done on the ground, rather than what is being said,” said Paul Jackson, global head of asset allocation research at Invesco. My assumption is that this will be settled diplomatically. If the markets go down a lot, I think it will be a buying opportunity.”
He said he did not expect a big change from Russia while its ally China, Hosts the Winter Olympics. Mr Jackson said the games are wrapping up this weekend, so “we still have some time before we feel like things have really squandered on a permanent basis”. “In the meantime, it’s a publicity stunt.”
The geopolitical tensions come at a time when investors are already grappling with rising inflation and preparing for the Federal Reserve to raise interest rates this year. These shifts have disrupted the stock and bond markets for most of the year.
Despite the volatility this week, some investors said they expect inflation and monetary policy to remain center stage in the coming months.
High and rising inflation has rightly become the main concern of investors. It affects consumer spending, business expectations, politics and, most importantly, the direction of monetary policy.”
Strategists in a note to clients on Thursday.
On Thursday, new data showed that weekly jobless claims in the US, a proxy for layoffs, came in at 248,000, up from the previous week. Economists had expected claims to continue to fall, given the tight labor market.
The yield on the US 10-year Treasury fell to 1.972% in recent trading from 2.044% on Wednesday. Gold prices rose about 1.6%.
Footage released by the Russian Defense Ministry on Wednesday showed trains moving tanks across the Crimean bridge, as Russia said it was moving troops from locations near the Ukrainian border. A NATO official said the Russian military build-up around Ukraine continues. Photo: Press Service of the Russian Ministry of Defense / Environmental Protection Agency / Shutterstock
The Russian ruble weakened by about 1% against the dollar. The currency has fluctuated in recent days as investors have tried to gauge the severity of the tensions.
In corporate news,
It rose 11% after the food delivery company announced a Revenue jump.
It fell 16% after posting a larger loss.
It rose 4% after it was reported Profit beyond estimates And its profits increased.
It rose 2.7% after reporting revenue and earnings above Wall Street expectations, as well as an increase in its share buyback program.
It decreased by 7.5% though Reporting record sales, making it one of the worst-performing companies in the S&P 500. It said its auto sector has seen a sharp decline in revenue due to supply chain issues.
Trader at the New York Stock Exchange on Wednesday.
Photo:
Courtney Crowe/The Associated Press
Offshore, the Stoxx Europe 600 Continental Index was down 0.7%.
Asian standards were mixed. The Shanghai Composite was little changed, while Hong Kong’s Hang Seng was up 0.3%. Japan’s Nikkei 225 is down 0.8%.
Write to Anna Hirtenstein at [email protected] and Gunjan Banerji at [email protected].
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