US stocks fall, oil rises above $115 as war anxiety escalates | Russo-Ukrainian War

News of what Ukrainian officials said was an unprecedented attack on a nuclear power plant sent tremors through markets.

By Bloomberg

Stocks fell, while the dollar rose along with bonds, as fears of heightened war risks rattled global markets. Oil rose above $115 a barrel after news broke that the United States is considering banning imports of Russian crude for its invasion of Ukraine.

The S&P 500 fell for the fourth time in five days as commodities saw their biggest weekly rise since 1974 as Russia’s growing isolation stifled a major source of materials, sparking fears of prolonged shortages and accelerating inflation. The White House is weighing whether an oil ban would actually hurt the Russian economy or whether crude would simply flow to other markets and drive up gasoline prices. The greenback hit its highest level since 2020 while 10-year yields fell to around 1.7%. The common European currency has approached a key support level that dates back to the creation of the euro in 1999.

The S&P Dow Jones Indices will remove Russian stocks from their gauges, joining other global index compilers in avoiding the nation. Three major Russia-focused ETFs were halted on Friday after the New York Stock Exchange took action based on what it called a “regulatory concern.” A senior nuclear official has called for talks with Russia and Ukraine after the Kiev government said Vladimir Putin’s troops started a fire at Europe’s biggest nuclear complex during a bombardment. JPMorgan Chase & Co. economists said the war could hurt Russia’s economy as much as its devastating 1998 default.

Oil could hit $150 a barrel over the next three months if Russian crude continues to be largely shunned, said Damien Courvalin, head of energy research at Goldman Sachs Group Inc. Rising commodity prices has the potential to dampen growth and stoke inflation, creating a dilemma for central bankers around the world as they weigh the need for higher borrowing costs against the risk of delaying the recovery economic.

Jerome Powell’s efforts to limit the Federal Reserve’s takeoff this month to a quarter of a percentage point were bolstered by unexpected wage stagnation amid strong hiring seen in February’s jobs report. As employers added 678,000 people to payrolls and unemployment fell to 3.8%, average hourly earnings were little changed from January. This suggests that central bankers do not face an immediate wage and price spiral similar to that of the 1970s, reducing the urgency to take bolder steps to rein in inflation.

War jitters drive sharp swings in dollar and US yields

Some of the major movements in the markets:

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  • The S&P 500 fell 0.8% at 4 p.m. PT
  • The Nasdaq 100 fell 1.4%
  • The Dow Jones Industrial Average fell 0.5%
  • The MSCI World index fell 1.6%
  • Currencies
  • The Bloomberg Dollar Spot Index rose 0.6%
  • The euro fell 1.2% to $1.0931
  • The British pound fell 0.8% to $1.3243
  • The Japanese yen rose 0.5% to 114.85 per dollar
  • Obligations
  • The yield on 10-year Treasury bills fell 10 basis points to 1.74%
  • Germany’s 10-year yield fell nine basis points to -0.07%
  • The UK 10-year yield fell nine basis points to 1.21%
  • Merchandise
  • West Texas Intermediate crude rose 6.7% to $114.88 a barrel
  • Gold futures rose 1.7% to $1,969.70 an ounce with help from Sunil Jagtiani, Emily Barrett, Namitha Jagadeesh, Vildana Hajric, Isabelle Lee, David Marino and Emily Graffeo.

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