US stocks fell as investors expressed concern about the further escalation of the war in Ukraine, which led to a shortage of commodities.
The S&P 500 fell 0.3% in early New York trading, a modest pullback for the broad market index after it closed 1.3% higher on Thursday. The Nasdaq Tech Composite fell 0.4% and the Dow Jones Industrial Average fell 0.3%, or 108 points.
Stocks have surged over the past three days, leading the S&P 500 to its best weekly performance of the year. It is up 4.5% this week. Investors said they are assessing the impact of the war in Ukraine on the US economy and that companies continue to have strong fundamentals. The recent rise in oil prices has the potential to dampen sentiment and heighten concerns about inflation, investors said.
“The sentiment remains fragile and the risk of further escalation remains a real concern despite the past two weeks of gains,” said Michael Hewson, chief market analyst at CMC Markets.
Oil prices fluctuated at elevated levels, with Brent oil falling 0.4% after rising more than 8% on Thursday. The world benchmark traded at $106.28 per barrel. Traders remain worried about cuts in oil supplies due to long-term sanctions against Russia amid signs that the conflict could drag on.
Russian and American officials said on Thursday that talks between Moscow and Kiev on a ceasefire have not made progress. President Biden is due to speak with Chinese leader Xi Jinping on Friday and is expected to try to keep Beijing from supporting Russia in the war in Ukraine.
Traders worked on the floor of the New York Stock Exchange on Wednesday.
Photo: Spencer Platt/Getty Images
The benchmark 10-year Treasury yield fell to 2.167% from 2.192% on Thursday, reversing direction after four straight days of gains. Prices rise when yields fall.
Shares of GameStop memes fell 9% after the company reported an unexpected loss in the latest quarter on Thursday after the markets closed. FedEx shares fell 3.7% after the company reported lower shipments and said profit margins were under pressure.
Overseas, the Stoxx Europe 600 pan-continental index fell 0.4%.
The Russian stock market remained closed and the central bank has not yet said if it will reopen next week. The Central Bank kept the key rate at 20%. The ruble gained 1.3% against the dollar, trading at around 105 rubles to the dollar, after the Russian state avoided default by making coupon payments on dollar-denominated sovereign bonds on Thursday.
“The markets were set for a Russian technical default, people were surprised,” said Ludovic Subran, chief economist at Allianz. He added that this contributes to the strengthening of the currency.
Russian government bonds also rose. The bond maturing next year is trading at about 55 cents on the dollar, compared with 25 cents earlier in the week, according to AdvantageData.
In Asia, most major benchmarks have risen. Chinese stocks were mixed, with the Shanghai Composite rising for the third consecutive trading session and amplifying the momentum catalysed by politicians in Beijing, signaling support for capital markets earlier in the week. The Hong Kong Hang Seng Index fell 0.4% on Friday but still closed more than 4% higher for the week.
Write to Anna Hirtenstein at [email protected]
Corrections and additions
European stocks began trading at 4 am ET. An earlier version of this article erroneously described moves at Thursday’s close as taking place on Friday morning.
Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8