By Sinéad Carew

NEW YORK, (Reuters) – Stocks rebounded Friday. The U.S. Dollar fell and oil prices dropped as investors welcomed talks of renewed diplomacy following Russia’s invasion. As coordinated Western sanctions left Russia’s energy sector largely unaffected, it was also boosted by talk of renewed diplomacy.

Concerns about an invasion pushed oil prices above $100 per barrel on Thursday for the first time since 2014. [O/R]

Wall Street indexes extended previous session’s rally against Nasdaq, and registered gains for the week.

Closed up by 2.43%. For the week, it was down 0.7%.

Russian President Vladimir Putin exhorted Ukraine’s military leaders to be overthrown and for peace. Kyiv authorities called citizens to defend their capital.

EU nations agreed to block the European assets of Putin, his foreign minister Sergei Lavrov and announced that they would seek U.S. sanctions. Volodymyr Zelenskiy, the Ukrainian president, pleaded for stronger sanctions.

China’s Foreign Minister Wang Yi claimed that China values Ukraine’s sovereignty, as well Russia’s security issues, and welcomed direct Russia-Ukraine dialog as soon as it can. [nL1N2V02LS]

Russia stated that it would send a delegation of diplomats to Ukraine to discuss the matter, however Ned Price, spokesperson for U.S. State Department said this was an effort to “shoot a gun” at diplomacy.

The market went through several stages. The markets heard about the invasion Wednesday night, and they began selling. Markets then heard the words sanctions and began to buy. “Then, they heard the word Diplomacy Friday and continued to buy,” John Augustine from Huntington National Bank Columbus, Ohio, said.

A few weeks ago, some investors were cautious when it came to riskier assets. However, the Federal Reserve was expected to increase U.S. interest rate.

Chris Zaccarelli is chief investment officer of Independent Advisor Alliance, Charlotte, North Carolina. He stated that the market only looks at the near-term and that they have seen what they were afraid to happen so that there’s no other reason for concern about the invasion in Ukraine.

Zaccarelli now focuses on the Federal Reserve’s actions. To combat inflation,… increase rates at a higher rate than most people think.

The finished up 2.51% after closing 0.28% higher on Thursday while the S&P 500 gained 2.24% after rising 1.5% the previous day and the added 1.64% after rallying 3.3% on Thursday.

Russia’s major stock index finished up 20% following Thursday’s record 33% decline. The index was last at around 15%. After-hours trading has seen gains but they were somewhat pared back.

Graphic: Russian stock market plunging far more than during other crises-https://fingfx.thomsonreuters.com/gfx/mkt/xmvjoekmepr/Pasted%20image%201645779548050.png

OIL PRICE DROP

The price of a barrel was $97.93, down by 1.16%. Meanwhile, the U.S. West Texas Intermediate crude oil settled down 1.3% to $91.59.

To $1,887.24 an troy ounce, safe-haven gold declined 0.8% It climbed to $1,973.96, the highest level since September 2020.

To 1.965%, the yield on Treasury notes fell 0.7 basis points. At 1.568%, the two-year Treasury yield was up 2.2 base points. This is a typical rate that moves with expectation.

“The bond markets are trying to figure out what Fed Chair Powell will be saying next week during his testimony before Congress. The Fed has been a favorite target of the bond market. Huntington’s Augustine stated that the global geopolitical risk in the eyes the gold and dollar have declined.”

A day after registering the largest percentage gain for a daily period in three months, U.S. dollars fell. Investors speculated that the Fed would be cautious in raising rates quickly due to sanctions against Russia and U.S. inflation statistics.

It fell 0.589% while the euro rose 0.73% to $1.1273.

Russian rouble rose to $83.54, a rebound from its previous record-breaking low of 89.986.

U.S. data released Friday revealed that consumer spending rose more than anticipated in January, despite price pressures increasing. Annual inflation reached levels last seen 40 years ago.