U.S. stock indexes mostly rose on Friday, putting them on track for a second straight week of gains.
Investors have piled into U.S.-listed companies in recent sessions, suggesting many are gaining confidence that the economy will weather the escalating war in Ukraine and rising interest rates. .
The S&P 500 added 0.2%, on track for a gain of around 1.5% for the week. The index gained more than 6% last week. The Dow Jones Industrial Average rose 0.5%, while the tech-heavy Nasdaq Composite fell 0.4%.
The gains came despite a continued rise in benchmark Treasury yields. The yield on the benchmark 10-year Treasury bond jumped to 2.447% from 2.340% on Thursday. This would be the 12th increase in 15 sessions.
Bonds generally underperform in times of high inflation because the value of fixed cash flows is eroded. Yields and prices move in opposite directions.
The war in Ukraine has also raised concerns about inflation and disruptions in the supply of raw materials. President Biden has said the United States will react if Russia uses chemical weapons and called for the country’s expulsion from the Group of 20 industrial and developing countries, raising fears of further escalation.
“The markets are trying to price something that is fundamentally impossible to price because part of what happens in the world depends on Putin’s thinking, which no one knows,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “The longer the conflict lasts, the more inflation goes up, the less growth goes down. It is massively, radically uncertain.
The recent rebound in equities was driven by investors buying the decline, amplified by the surge in high inflation, he said. “Anytime there is a big drop you see money coming in and that has continued to a large extent. When you have 8% inflation, money is crucified and needs somewhere to go,” Mr. Kamal said.
Oil prices fell, with global benchmark Brent crude down 1.3% to $114 a barrel. Brent has gained around 5% this week as trading houses and refineries self-sanction measures to prevent Russian oil from starting to flow into the market, traders said.
Consumer confidence for March fell, according to a University of Michigan survey released Friday. The measure has fallen in recent months as consumers, especially lower-income households, have a more pessimistic outlook on the economy.
Overseas, the pancontinental Stoxx Europe 600 index rose 0.2%. Swedish engineering firm Trelleborg soared 23% after Yokohama Rubber announced it would acquire its tire business for $2.2 billion.
Russian shares fell 3.7% a day after the Moscow stock exchange partially reopened after a month-long shutdown, reversing part of Wednesday’s 4.4% jump. Gazprom fell 12% and Russia’s biggest lender, Sberbank, fell 3.5%.
The ruble appreciated almost 3% against the dollar, trading around 99.5 rubles to the dollar. It has weakened by 25% since the start of the year.
In Asia, major benchmarks were mixed. Chinese stocks came under pressure as a US watchdog said the delisting of US-listed Chinese stocks was still on the table. The Shanghai Composite Index fell 1.2% and the Hong Kong Hang Seng Index fell 2.5%. Japan’s Nikkei 225 edged up 0.1%.
Write to Anna Hirtenstein at [email protected]
Corrections & Amplifications
The S&P 500 closed up 1.4% on Thursday. An earlier version of this article incorrectly stated that it closed up 1.4% on Wednesday. Additionally, the University of Michigan consumer confidence survey for March was released at 10 a.m. ET. An earlier version of this article incorrectly stated that the survey was due for release at 11 a.m. (corrected March 25).
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