(Bloomberg) — Stocks fell Friday and U.S. futures trimmed earlier losses after Ukraine said a nuclear-plant fire caused by Russian shelling of the area was extinguished. Investors also awaited monthly U.S. jobs data.
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S&P 500 contracts edged lower, after earlier sliding as much as 1.7% following news of the fire. European equities also saw moderate losses after an earlier slump in futures, with bond proxies such as utilities in the green. An Asian equity index declined to the lowest since 2020.
The latest escalation in Russia’s invasion of Ukraine sent jitters through the market before sentiment eased as local emergency services said the blaze was contained, and Ukraine told the International Atomic Energy Agency there had been no change reported in radiation levels. Russian troops have occupied the site of Europe’s largest nuclear power plant.
Treasuries pared gains triggered by haven demand, while oil extended its biggest weekly surge in almost two years. Gold was steady, the dollar ticked up and the euro slipped.
Risk appetite in global markets has plummeted after Russia’s invasion of its neighbor and the ensuing sanctions by the U.S. and its allies, while commodities are surging on supply concerns. Energy, metal and grain costs have soared as traders shun Russia’s oil and other resources.
European equities and financial stocks saw their largest outflows ever in the week up to March 2, while investors fled to cash, Bank of America Corp. wrote citing EPFR Global data.
“The headlines about the Russian shelling of that nuclear plant are clearly driving a flight to quality trade,” said Chamath de Silva, senior portfolio manager at BetaShares Holdings in Sydney.
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The Russian stock market will be closed to trading for a fifth straight day, marking a record in the country’s modern history, as it attempts to stave off the impact of global sanctions for domestic investors.
Away from the conflict, traders are also evaluating the monetary policy outlook and awaiting the monthly U.S. employment report.
Chair Jerome Powell on Thursday reaffirmed that the Federal Reserve is set to start a series of interest-rate hikes to curb inflation, while indicating it will move judiciously and is alert to inflation risks.
“Rising commodity prices are a big concern for the market, prompting fears of stagflation,” said Fiona Cincotta, senior financial markets analyst at City Index. “The economic clinch point of this war is commodity prices. Higher energy prices, slowing growth, and surging inflation are not a good outlook.”
What to watch this week:
Some of the main moves in markets:
Stocks
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The Stoxx Europe 600 fell 0.5% as of 8:13 a.m. London time
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Futures on the S&P 500 were little changed
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Futures on the Nasdaq 100 were little changed
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Futures on the Dow Jones Industrial Average were little changed
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The MSCI Asia Pacific Index fell 1.6%
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The MSCI Emerging Markets Index fell 1.6%
Currencies
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The Bloomberg Dollar Spot Index rose 0.2%
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The euro fell 0.5% to $1.1013
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The Japanese yen was little changed at 115.42 per dollar
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The offshore yuan was little changed at 6.3240 per dollar
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The British pound fell 0.2% to $1.3321
Bonds
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The yield on 10-year Treasuries declined three basis points to 1.81%
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Germany’s 10-year yield declined two basis points to 0.00%
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Britain’s 10-year yield was little changed at 1.29%
Commodities
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