Shares looked set to open lower on Friday as the war in Ukraine and changes in US monetary policy continued to loom.
Future for the
Industrial average of the Dow Jones
It fell 180 points, or 0.5%, on Friday after the index rose 417 points on Thursday to close at 34,380.
S & P500
futures marked a start with 0.6% in the red, with the
on track to open 0.7% lower.
Overseas, the pan-European
it fell by 0.1%, while that of Hong Kong
Hang Seng Index
it slid 0.3%, after posting its largest two-day gains since 1998 on Wednesday and Thursday.
As US stocks fell on Friday, the major indices were on track to end the week higher after a three-day rally. Investors continue to watch the latest headlines on the Russia-Ukraine war – which has rocked equity and commodity markets for the past three weeks – as well as digest a changing monetary policy environment.
The Federal Reserve pulled away from the pandemic-era stimulus earlier this week, with the Federal Open Market Committee announcing the first interest rate hike since 2018 amid turbulent global economic growth. The central bank is raising rates by 25 basis points, with markets pricing in seven more hikes this year as the Fed battles historically high inflation.
“The markets are trying to make sense of an aggressive FOMC that has announced a dovish rate hike and believes it can aggressively tighten while maintaining growth,” said Jeffrey Halley, analyst at broker Oanda. “It didn’t help the lack of clarity in the Ukraine-Russia talks about what much of the recent price action in the market’s asset classes has been built on.”
Not much has changed on the Ukrainian front. There have been mixed messages on the state of diplomatic talks as the Russian offensive on Ukrainian cities continues. The United States has made additional pledges of military support to Ukraine and President Joe Biden will speak with Chinese President Xi Jinping about the conflict on Friday.
“Biden will reportedly point out that the US will impose costs on China if it supports Russia in the conflict,” said Jim Reid, a strategist at Deutsche Bank. “US intelligence warned him [Russian President Vladimir Putin] the rattle of the nuclear saber was likely to increase if the war dragged on. This is something that hasn’t come out three weekends ago, so worrying news.
In the commodities sector, oil prices remained volatile and hovered above $ 100 a barrel amid warnings of lack of supply and pessimism over the findings of peace between Russia and Ukraine. Sanctions on Russia have disrupted energy supply chains and oil has risen by as much as 30% within a few weeks.
West Texas Intermediate crude oil futures, the US benchmark, increased by 1.5%, exceeding $ 104.50 a barrel; Oil prices bottomed below $ 94 on Tuesday after starting the week trading above $ 106. Prices rose 9% on Wednesday.
“What gave the rally momentum was a warning from [International Energy Agency] of a “supply crisis,” describing Russian sanctions as the “biggest supply crisis in decades,” Halley noted. “Of course, the IEA is simply telling everyone the obvious and what seems to be lost on the markets is that nothing will change if an agreement is enacted with Ukraine.”
Here are 3 titles moving on Friday:
“Meme” preferred stock and retail investors
GameStop (ticker: GME) fell nearly 7% in US pre-market trading after the game retailer reported a surprise fourth-quarter loss at the end of Thursday, even though sales were above expectations. Other meme titles were lower, with
AMC entertainment (AMC) down close to 2% e
Bath to bed and beyond (BBBY) down 2%.
Write to Jack Denton at firstname.lastname@example.org