US stocks rose as oil fell from record highs as investors watched Russia’s invasion of Ukraine and how the jump in commodity prices is likely to affect inflation and Federal Reserve monetary policy.
The S&P 500 added 0.5% in morning trading on Thursday after rising sharply on Wednesday. The technology-focused Nasdaq Composite Index rose 0.1% and the Dow Jones Industrial Average rose 0.7%.
U.S. crude oil prices briefly rose above $ 115 a barrel for the first time since 2008 before trading back to $ 110.12 a barrel as refineries refrained from buying Russian oil, reducing global energy supply. . Crude Brent futures, the international benchmark, fell 1.1 percent to $ 111.67. Investors are worried that the continued rise in oil prices could portend a combination of slower growth and higher inflation.
Moscow’s invasion of Ukraine injects instability into wider markets. Investors are trying to assess how avoiding Russian goods, including oil, will lead to already high inflation and how aggressively central banks will raise interest rates when faced with additional price pressures and uncertain economic prospects.
“The inflationary impact of the spikes in oil and natural gas is clear. Inflation will be more sticky. Interest rates will be raised by central banks worried about inflation, and this will have a bad effect on growth, “said Edward Park, chief investment officer at British investment firm Brooks Macdonald. “Stagflation is the big concern for 2023.
Moscow’s invasion of Ukraine injects instability into wider markets.
Photo: Ali Joseph / Associated Press
Natural gas prices in Europe rose 2.1%, based on a jump this week. Investors are worried that natural gas supplies to Europe could be disrupted as a result of the war. According to analysts, about a third of Russian gas exports to Europe pass through Ukraine.
Shares of energy companies, which are likely to benefit from higher oil prices, have been hesitant about prices. ConocoPhillips and Occidental Petroleum fell about 1%.
Shares of Snowflake fell 13% after the company issued weaker-than-expected sales guidelines. Shares of Okta fell 6.4% after the software business provided guidance suggesting that aggressive investment would lead to greater-than-expected short-term losses to the end result. Kroger added more than 9.8% after announcing that its sales and profits rose.
The Pan-Continental Stoxx Europe 600 fell 0.3%. Russia’s stock markets remained closed for the fourth day in a row as the government sought to limit the sell-off while also imposing capital controls on the ruble.
Since Russia invaded Ukraine in late February, the United States and allies have imposed heavy sanctions on Russia. WSJ’s Shelby Holiday is immersed in how these sanctions affect everyone, from President Vladimir Putin to ordinary Russian citizens. Photo: Pavel Golovkin / Associated Press
The London Stock Exchange has stopped trading more than 50 Russian stocks. MSCI Inc. Index Providers and FTSE Russell said they would cut Russian stocks from their benchmarks next week, and S&P Dow Jones Indices is considering doing the same.
The roll fell 4.6 percent on Thursday against the green dollar to 112 rubles a dollar, according to FactSet. Traders say the reluctance of investors and brokers to touch the currency has limited the ease with which they can trade it. Currencies in nearby countries have also fallen against the dollar as investors worry about economic spillovers. The Polish zloty fell 0.9% and the Hungarian forint 0.6%.
In the US bond markets, yields on benchmark 10-year government securities rose to 1.896% from 1.862% on Wednesday. Profitability and prices are moving backwards.
Major stock indexes in Asia have largely won. South Korea’s Kospi jumped 1.6 percent and Japan’s Nikkei 225 rose 0.7 percent. China’s Shanghai Composite fell 0.1%.
Write to Caitlin Ostroff at [email protected]
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