Stocks rise on Wall Street amid Russian-Ukrainian hopes
NEW YORK — Stocks began to rise again on Friday as markets seize on signs of peace in Ukraine amid concerns about the impact of war on inflation and the economy.
The S&P 500 was up 0.6% in early trading, a day after closing its fifth loss in the past six days. European stocks were even higher, while crude oil prices tentatively added more gains after surging in recent weeks.
European stocks and U.S. equity futures made sharp moves higher early Friday, before Wall Street markets opened, and some analysts pointed to Russian President Vladimir Putin’s comments as surprisingly upbeat. Putin cited “some positive developments” in negotiations with Ukraine, although he gave no details.
The Dow Jones Industrial Average rose 339 points, or 1%, to 33,513 as of 9:50 a.m. EST, and the Nasdaq composite rose 0.5%. They all remain down for the week, even though the S&P 500 surged in the middle of it to its best day since the summer of 2020.
Markets have swung wildly in recent weeks, not just day-to-day but hour-to-hour, as investors struggle to handicap just how much Russia’s war in Ukraine will drive up prices of oil, wheat and other commodities where the region is a major producer. This increases the threat that the economy is headed for a toxic combination of persistently high inflation and stagnant growth.
Despite Putin’s comments, there is still great uncertainty in the markets, which means that sharp price swings are likely to continue. President Joe Biden will announce on Friday that the United States will revoke Russia’s “most favored nation” trade status. Other major economies would have to do the same, which would allow tariffs on Russian imports.
Amid all the uncertainty, US stocks remain around 10% below their peak from earlier this year, while crude oil prices remain more than 40% higher for 2022 so far.
A barrel of U.S. crude oil rose 1.2% to $107.20 on Friday after bouncing between gains and losses earlier in the morning. It briefly topped $130 earlier this week. Prices have fluctuated as concerns over disrupted supplies clash with hopes for peace and the possibility that countries other than Russia could increase production.
Brent, the international standard, rose 1.4% to $110.91 a barrel.
European stocks rebounded more than the rest of the world, with Germany’s Dax gaining 3% and France’s CAC 40 up 1.9%. Asian markets earlier in the day were mixed, with Japan’s Nikkei 225 falling 2.1% and Shanghai stocks adding 0.4%.
Markets were already nervous before the invasion of Russia, as central banks around the world prepared to raise interest rates and remove support for the economy put in place after the pandemic. The Federal Reserve and other central banks are hoping to stamp out the highest inflation in generations, though they also risk triggering a recession if they raise rates too high or too quickly.
Inflation has risen enough that politicians around the world know they could be in trouble because of it.
Brazil’s state-owned oil company Petrobras on Friday raised the prices of fuel sold to its distributors by up to 25%, citing the war between Russia and Ukraine, as official data showed inflation accelerated in February .
The company said in a statement announcing the increase the day before that for weeks it refrained from passing on costs, but persistently high oil prices forced the adjustment to ensure supply to the Brazilian market.
Prices rose 1% in February, the most for the month since 2015 and pushing 12-month inflation to 10.5%, according to data released Friday by the national statistics institute.
In a radio interview earlier this week, the Brazilian president said Petrobras was wrong to set prices in line with international levels and that his administration was looking for a solution. He also said ordinary people would not be able to afford a massive increase to match international prices. President Jair Bolsonaro plans to run for re-election in October despite falling approval ratings.
In the United States, a report released on Thursday showed consumer prices jumped 7.9% last month from a year earlier, the highest rate of inflation since 1982. It is likely to get worse in the short term due to the post-war oil boom and all the financial sanctions imposed by the United States and its allies on Russia.
Biden said he wanted to limit economic pain for American households, but acknowledged that “standing up for freedom” comes at a cost.
AP writers David Biller and Elaine Kurtenbach contributed.