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S&P 500 Sinks as Russia-Ukraine Conflict Offsets Blowout Jobs Report -Breaking


© Reuters.

By Yasin Ebrahim — The S&P 500 fell Friday, as a strong monthly jobs report was offset by an escalating Ukraine-Russia conflict that is poised to push inflation much higher.

It fell 1.2%.

As Russia intensified its attack against key Ukrainian cities, Friday’s Russian aggression caused investors to withdraw from stocks and invest in safe-haven gold and bonds.

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 payrolls rose by 678,000 to February. That is more than the consensus of 400,000 jobs. The decline was 3.7%.

However, the number was not up, despite reports that companies had to increase wages in order to lure 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.

The Russia-Ukraine Conflict is likely to interrupt supplies of key commodities such as wheat, corn, and oil. This will increase 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.

Financial stocks and technology were the largest sectors to keep the market from going into red. The former was under pressure due to declining bank stocks, falling Treasury yields and concerns about global economic growth.

Regional banks including SVB Financial (NASDAQ:), Invesco (NYSE:), Signature Bank (NASDAQ:) were sharply down, falling more than 88% despite Goldman Sachs’ reiteration of its buy rating for the stock.

As megacap tech fell, tech stocks were pulled lower. Meanwhile semiconductor stocks saw a 3% drop due to losses in NVIDIA(NASDAQ:), and Advanced Micro Devices(NASDAQ:). Broadcom gains were offset by losses in NVIDIA.

Broadcom (NASDAQ 🙂 announced fiscal first quarter results that exceeded Wall Street’s expectations. The top and bottom line numbers topped Wall Street, pushing its shares up more than 22%.

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 (~50 weeks,” Credit Suisse said in a note as it reiterated its $700 price target on the stock.

Kroger (NYSE 🙂 was up more then 6% in the meantime after Kroger detailed its long-term plans for growth. This included a pledge to return between 8% and 11% to shareholders, as well as a lift from digital growth initiatives.

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.