Global stocks fall on conflict in Ukraine and looming US rate hikes

Global stocks fell on Friday, pressured by uncertainty surrounding the conflict in Ukraine and expectations that the Federal Reserve will raise U.S. interest rates next week.

The Nasdaq and S&P 500 fell, weighed down by technology and growth stocks. Oil prices stabilized for the day but fell for the week in volatile trading.

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Investors remained focused on Ukraine, where Russian forces beating on Kiev have regrouped northwest of the capital. Ukrainian President Volodymyr Zelenskiy said his country had “already reached a strategic turning point” in the conflict.

The United States announced a ban on imports of Russian seafood, vodka and diamonds and made it harder for Russia to access International Monetary Fund funds, as Washington and its allies stepped up sanctions.

Financial markets swung wildly during the war in Ukraine, now in its third week, as investors also braced for central banks to tighten monetary policy to tame inflation just as the economy world was starting to slow down.

U.S. consumer confidence fell more than expected in early March due to inflation fears, according to a report on Friday, while data released on Thursday showed consumer prices in February recorded their largest annual increase in 40 years.

Next week the Fed is expected to start raising interest rates and the Bank of England is expected to continue its rate hikes, especially after UK economic growth figures in January came in stronger than expected. .

“While investors have accepted that the Fed will likely start raising rates next week, it remains unclear how far and how fast the Fed moves from here,” wrote chief strategist Lindsey Bell. markets and money from Ally in a note. Friday.

“With the market taking action (in the form of volatility) and possibly reducing demand, the Fed may not have to act as quickly. Still, the pace of inflation will be the main driver of policy changes during most of this year.”

As of 4:50 p.m. EST (2150 GMT), the MSCI gauge of stocks across the world was down 1.15%.

The Dow Jones Industrial Average fell 229.88 points, or 0.69%, to 32,944.19, the S&P 500 lost 55.21 points, or 1.30%, to 4,204.31 and the Nasdaq Composite fell 286.15 points, or 2.18%, to 12,843.81.

Investors may be put off by the statistical cost of the S&P 500, analysts at Bank of America say. The benchmark US stock index is statistically expensive on 14 out of 20 measures. [LIVE/]

Europe’s benchmark STOXX 600 index closed 1% higher, making it the first weekly gain after three straight weeks of losses.

Emerging market stocks lost 1.55%. MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 1.67%, while the Japanese Nikkei lost 2.05%.

Oil futures have soared since Russia’s invasion of Ukraine, hitting their highest levels since 2008 during the week and falling sharply as supply appeared to come online.

Brent crude futures stabilized 3.05% at $112.67 a barrel and U.S. crude 3.12% at $109.33.

The dollar rose to a five-year high against the safe-haven yen, while commodity-linked currencies slumped.

The dollar was last up 0.78% against a basket of six global peers at 99.12. The index was on track for a 0.56% increase for the week, following last week’s 2% rise, which was its biggest weekly percentage increase since April 2020.

The greenback hit its highest level in five years against the Japanese yen, down 0.99% to 117.28 yen.

The euro was last down 0.65% at $1.0912.