Wall Street Ends Down Sharply on Ukraine Conflict Fears

Wall Street stocks ended sharply lower on Friday for the second straight session, as investors fretted about deepening tensions between Russia and Ukraine.

Most of the 11 major S&P 500 sector indexes declined, led by technology and consumer discretionary. The energy sector index surged as oil prices hit seven-year highs.

With investors already fretting about inflation and rising interest rates, selling on Wall Street accelerated after Washington warned that Russia had massed enough troops near Ukraine to launch a major invasion, and that an attack could begin any day.

“We just have to see how this plays out over the weekend and whether or not international leadership can bring this under wraps,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York. “If not, then the knock-on effects could be material, and that’s what the markets is worried about.”

Apple Inc., Amazon.com Inc., Nvidia Corp. and Microsoft all fell, and weighed more than any others on the S&P 500’s decline.

According to preliminary data, the S&P 500 lost 85.76 points, or 1.90%, to end at 4,418.32 points, while the Nasdaq Composite lost 400.02 points, or 2.83%, to 13,784.13. The Dow Jones Industrial Average fell 510.12 points, or 1.45%, to 34,731.47.

The latest sell-off follows a slump on Thursday, when data showed consumer prices surged 7.5% in January, the biggest annual increase in 40 years. Comments from St. Louis Fed Bank President James Bullard about aggressive rate hikes have also rattled investor sentiment.

Traders are pricing in a half-point rate hike in March with just a scant chance of a smaller quarter-point raise, and heavy bets for a policy path that would bring rates to a range of 1.75%-2.00% by the end of the year.

A University of Michigan survey showed U.S. consumer sentiment fell to its lowest in more than a decade in early February on expectations that inflation would continue to rise in the near term.

The CBOE volatility index, also known as Wall Street’s fear gauge, was up for a second straight session and hit its highest level since the end of January.

“The market volatility from January is not over and we expect continued choppiness as investors weigh the prospect of a more aggressive Federal Reserve in the face of rising inflation,” said Richard Saperstein, chief investment officer, Treasury Partners.

Online real-estate platform Zillow Group Inc. jumped after beating Wall Street estimates for quarterly sales, boosted by an 11-fold revenue increase in its homes segment.

Under Armour Inc. slumped after warning that its profit margin would be under pressure in the current quarter.

© 2022 Thomson/Reuters. All rights reserved.

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