U.S. stocks edged lower Monday as investors kept watch on tensions over Ukraine and continued to worry over the speed and scope of expected rate hikes by the Fed.
What’s happening
-
The Dow Jones Industrial Average
DJIA
fell 179 points, or 0.5%, to 34,579. -
The S&P 500
SPX
was down 0.2% at 4,411. -
The Nasdaq Composite
COMP
rose 0.3% to 13,835.
On Friday, the Dow Jones Industrial Average fell 504 points, or 1.4%, to 34738, the S&P 500 declined 1.9%, to 4419, and the Nasdaq Composite tumbled 2.8% on Ukraine fears. Through Friday’s close, the S&P 500 was down 7% this year.
What’s driving markets
Worries over Ukraine eased somewhat Monday after Russian Foreign Minister Sergei Lavrov, in what appeared to be a scripted meeting with Russian President Vladimir Putin, suggested continuing talks with the U.S. and its allies over security issues. Putin responded affirmatively.
On Friday, stocks tumbled and investors piled into traditional havens, including Treasurys and gold after Jake Sullivan, the White House national security adviser, warned that a Russian invasion of Ukraine could occur “any day now.”
German Chancellor Olaf Scholz was visiting Ukraine and Russia on Monday with fears that time is running out to prevent a war. Over the weekend, U.S. President Joe Biden and Putin held a phone conversation, with no tangible progress. Ukraine has requested a meeting with Russia.
Meanwhile, “equity markets are more at risk from the fallout from the war on inflation than on a potential invasion of Ukraine,” said Sam Stovall, chief investment strategist at CFRA, in a note.
St. Louis Fed President James Bullard, who last week spooked financial markets with his comments about supporting a half-point rate hike in the wake of data showing inflation running 7.5% year-over-year, reiterated his call for the Fed to “front load” rate increases in the face of persistently high inflation.
Bullard, in an interview with CNBC, said he didn’t think the Fed’s rate moves would sink the economy or deeply unsettle financial markets.