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S&P 500 Falls as Intensifying Russia-Ukraine War Offsets Big Jobs Beat  -Breaking


© Reuters

By Yasin Ebrahim — The S&P 500 slipped to a weekly loss Friday, as the escalating Russia-Ukraine conflict roiled investor appetite and overshadowed a much better than expected monthly jobs report.  

They fell 0.8% and 0.5% respectively, or 179 points. The dropped 1.7%.

After Russia seizes a Ukrainian nuclear power plant, and then escalates its attacks on multiple cities on Friday night, investors were forced to withdraw from risk assets like stocks and move into safer-haven bonds or gold.  

Data showing that the U.S. created more employment than anticipated in February has offset rising geopolitical tensions, with the unemployment rate falling to its lowest level since February 2020.

Nonfarm employment increased by 678,000 in February. This is well beyond the consensus expectation of 400,000 new jobs. However, it fell more than anticipated to 3.7%.

In contrast, it was flat and did not meet expectations of a 0.5% increase in monthly growth despite many reports that employers had increased wages to draw workers.

“The flat average hourly earnings number was a relief to see given the increasing inflationary worries,” Eric Diton, president and CEO of The Wealth Alliance, told in an interview on Friday.

However, the Russia-Ukraine war is expected to cause disruptions in key commodities like wheat, corn and oil, which will accelerate inflation.  

“In terms of total natural resources, Ukraine is fourth in the world by total value, and first in Europe in terms of farmable land area,” Diton added. The Ukraine-Russia Conflict is an inflationary tailwind.”

The rise in oil prices has continued to drive energy stocks higher. There are reports that the White House may ban Russia’s oil imports into the United States. This is on top of concerns about tighter global energy supplies.

The biggest market sectors that were in red included technology and financial stocks. These are due to falling stock stocks and lower Treasury yields, as well as concerns over global growth and falling expectations for Fed rate increases.

Regional banks including SVB Financial (NASDAQ:), Invesco (NYSE:), Signature Bank (NASDAQ:) were sharply down, falling more than 8 percent despite Goldman Sachs’ reaffirmation of its Buy rating for the stock.

The trend in big tech continued to decline, with losses at chipmakers NVIDIA and Advanced Micro Devices (NASDAQ) reversing gains at Broadcom.

Broadcom (NASDAQ) posted fiscal-quarter results which exceeded Wall Street expectations in both top and bottom lines. This sent its shares higher by more than 3%

The chipmaker also guided fiscal second-quarter growth well above expectations on “broad-based demand, lean channel inventory and growing backlog despite stable albeit extended lead times  [of about] 50 weeks,” Credit Suisse said in a note as it reiterated its $700 price target on the stock.

Kroger (NYSE) was up over 6% in the meantime after Kroger detailed its long-term growth strategies, which included a promise to return approximately 8% to 11% shareholders. This is in addition to an increase from digital initiatives that will help to boost its digital growth.

Gap (NYSE:) reported a narrower-than-expected fourth-quarter loss and upbeat guidance, but concerns about supply chain disruptions and rising labor costs weighed on sentiment, forcing the stock to cut its intraday gains.