- Investors sought refuge in large-cap US technology equities as oil prices fell, easing concerns that Russia's invasion of Ukraine would result in an immediate worsening of the inflation picture.
- After teetering on the edge of a correction as the confrontation with Russia cast a pall over global markets, the S&P 500 climbed 1.5%, the NASDAQ 100 gained 3.4%, and the Dow Jones industrial average was 0.3% higher. The Stoxx Europe 600 index plummeted 3.3%, with Russian stocks falling to new lows.
- As armed forces arrived, accompanied by missile and artillery fire, Russian President Putin stressed that Russia does not intend to "occupy" its neighbour, but that action was inevitable after the US and its allies violated Russia's "red line" by expanding the NATO alliance. Additional sanctions were imposed on Thursday by US President Biden, who also stated that the US would release more strategic oil if conditions warranted.
- Advances of up to 9% in WTI crude were trimmed back to just 1%. The 10-year Treasury yield has dropped to 1.96%. Gold has retraced its prior gains. The dollar and the yen rose in value elsewhere, while the euro and commodity-linked currencies fell.
- Because Russia remains a commodity powerhouse and Ukraine is a significant grain exporter, the conflict threatens to upset global raw material and food prices. Natural gas prices in Europe increased as high as 62% earlier in the session, while metals prices soared, adding to inflationary pressures.
- Inflation expectations money market signs are resurfacing. The 2-Year breakeven rates on US Treasury inflation-protected securities or the gap between those yields and those on traditional Treasuries are at an all-time high, according to a major news wire's data dating back to 2004.
- Investors continue to be concerned that Fed tightening will stifle growth in the world's largest economy. Fed's Mester said a rate hike in March is still reasonable, barring an unforeseen shift, while Fed's Bostic said he's open to four or more rate hikes, depending on the data. The Fed's projections for six quarter-point rises this year are in line with what was factored in before the Ukraine attacks.
