U.S. stocks tumbled Friday, weighed down by investor anxieties about the Federal Reserve’s plans for monetary tightening and tensions between Russia and Ukraine.
The S&P 500 sank 1.3% in afternoon trading. The Nasdaq Composite tumbled 2%. The Dow Jones Industrial Average erased about 262 points, or 0.8%. All three indexes are on pace to post losses for the week.
Markets have traded choppily this week, as investors have digested shifting expectations about the prospective pace of central banks’ monetary tightening alongside geopolitical concerns. Data on Thursday showed that inflation hit 7.5% in January, a four-decade high. A Federal Reserve official said the central bank might have to move more drastically to curtail consumer prices, spooking investors.
Those events injected fresh uncertainty into a stock market that is on fragile footing. But on Friday, volatility grew after fears intensified that a Russian invasion of Ukraine could be imminent.
Oil prices surged higher Friday afternoon. Brent crude, the international oil benchmark, jumped 3.6% to $94.66 a barrel.
The yield on the benchmark 10-year Treasury note retreated, a day after topping 2% for the first time since mid-2019. The yield, which settled Thursday at 2.028%, recently traded at 1.958%. Yields and bond prices move inversely.
Before Thursday’s downturn, the U.S. stock market seemed to show signs of stabilizing. The S&P 500 had risen in seven out of the last nine sessions going into Thursday. But concerns that the Fed may more aggressively hike interest rates this year frazzled investors again.
Early Friday, it seemed that stocks might recover. All three major U.S. indexes opened higher. But stocks turned lower as the session continued. Only three sectors in the S&P 500—energy, utilities and consumer staples—recently traded higher.
“Inflation is currently in the public eye. It has become a political question,” said
Florian Ielpo,
head of macro at Lombard Odier Investment Managers. “This is something that is concerning us, we have a rising risk of monetary policy mistakes. This is the number one risk we see in 2022.”
In individual trading,
rose 17% after it reported a jump in revenue for its core unit, despite losing $881 million on its closed home-flipping business last year. Fintech company
tumbled 16% after its sales forecast came in below Wall Street’s expectations. It plunged 21% Thursday.
dropped 3.2% Friday after it reported a lower profit. The Wall Street Journal reported that the private-equity firm was nearing a deal to buy
point-of-sale terminal business.
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Read More: Stocks Fall Amid Ukraine Concerns, Inflation Data