- In late-day trading on Friday, US equities extended losses as risk sentiment deteriorated after Ukraine's top diplomat said he didn't see progress in negotiations with Russia.
- Ukrainian Foreign Minister Kuleba's comments came after Interfax quoted Russian President Putin as stressing daily attempts to de-escalate hostilities, news that boosted risk appetite in early New York trading. Meanwhile, President Biden called on lawmakers in the US to join Western partners in ending regular trade relations with Russia on Friday.
- The S&P 500 index finished at session lows, finishing the worst weekly performance since January 21. The growing war in Ukraine and sanctions against Russia have stoked inflation fears and threatened to stifle development, putting global markets on edge. On Friday, the dollar rose on haven demand, reaching its highest level since July 2020.
- Markets swung back and forth between panic selling and dip-buying of beaten-down stocks, sending the S&P to the biggest daily losses and gains since 2020. Oil in New York swung in an arc from above $130 a barrel to almost $103 a barrel, indicating that volatility was not limited to equities markets. Bonds also swung, with the 10-Year Treasury yield rising from around 1.7% to over 2%.
- Those huge swings occurred during a week in which inflation accelerated at its quickest rate in 40 years in February, bolstering anticipation that the Federal Reserve will begin hiking interest rates next week to limit inflation, which some economists believe will rise above 8%. If the European Central Bank's decisions on Thursday are any indication, policymakers may place a higher priority on fighting inflation than supporting economic recovery.
- Bond dealers raised inflation forecasts on Friday, with the 30-year bond reaching its highest level since 2013. The long-dated breakeven, which represents the market's projection for price rise over the next three decades, is now at 2.60%, joining short-term maturities at historically high levels.
- In the aftermath of Russia's invasion of Ukraine, consumer sentiment in the US plummeted to its lowest level since 2011, while year-ahead inflation forecasts soared to a four-decade high, according to a University of Michigan sentiment index.
