Topline
The stock market fell on Friday—with the Dow Jones Industrial Average wrapping up its second straight week of losses—as investors remain on edge about ongoing tensions between Russia and Ukraine as well as the Federal Reserve’s tightening monetary policy.
Key Facts
Stocks added to the previous session’s losses on Friday: The Dow Jones Industrial Average fell 0.7%, over 200 points, while the S&P 500 lost 0.7% and the tech-heavy Nasdaq Composite 1.2%.
Investors continue to worry about rising tensions between Russia and Ukraine, as top federal officials now expect an invasion in the next few days and prospects for avoiding war look less likely, according to a report from The Wall Street Journal.
U.S. Secretary of State Antony Blinken told the United Nations on Thursday that the situation is at a “moment of peril,” with Russia and Ukraine exchanging fresh accusations of violating cease-fires at the border on Friday.
Meanwhile, investor anxiety about the Federal Reserve’s tightening monetary policy continues with the central bank expected to aggressively raise interest rates this year to combat decades-high inflation.
Making matters worse, Wall Street experts are now warning that if the Federal Reserve raises rates too quickly that could spark a sharp economic downturn, market turmoil and even the next recession.
Investors also digested a slew of corporate earnings and news: Shares of video streaming service Roku fell over 20% as the company blamed slowing revenue growth on supply chain issues, and chipmaker giant Intel saw shares drop 5% after the company said it would need to boost spending to catch up with rivals.
Crucial Quote:
“Wall Street is feeling very jittery as it looks to the left and sees intensifying geopolitical risks with the Ukraine situation and then it looks to the right and sees the potential for aggressive Fed tightening,” says Edward Moya, senior market analyst at Oanda. Going into next week, “many investors are preferring to hold cash given the intensifying situation at the Ukraine border.”
What To Watch For:
The Russia-Ukraine tensions are “getting too much credit” for recent market volatility, says Vital Knowledge founder Adam Crisafulli, who is more concerned with the ongoing “implosion” of tech stocks, which have been “decimated these last few months, a process that seems to be accelerating.” Combined with continued uncertainty in markets over the Federal Reserve’s tightening monetary policy, stocks likely won’t stage a “meaningful and sustained rally… for several weeks,” he predicts.
Further Reading:
Recession Risks Are ‘Rising’ As Federal Reserve Scrambles To Fight Inflation, Experts Say (Forbes)
Dow Falls 600 Points As Russia-Ukraine Tensions Reach A ‘Crucial Moment’ (Forbes)
Stocks Fall After Federal Reserve Confirms March Interest Rate Hike To Fight Surging Inflation (Forbes)
