US stock markets slipped overnight on the general geopolitical worries and inflation concerns, with the S&P 500 losing 0.4% and the 30-stock Dow Jones Industrial Average shedding 0.5%. The tech-heavy Nasdaq Composite Index lost a mere 0.2 points, to be virtually unchanged at 13,790.9.
Markets did not like the developments in Ukraine, where the US announced it was relocating its embassy from Kyiv to the country’s west, which went against earlier reports that a diplomatic resolution between Russia and Ukraine could be reached before an armed conflict begins.
Again, energy stocks were mostly positive, with Occidental Petroleum (NYSE: OXY) up 5.6% and Marathon Oil (NYSE: MRO) up 3.2%. Crude oil was up $1.77 to US$94.87, a 1.9% rise, while gold gained $31.80, or 1.7%, to US$1,873.90.
Inflation still in the spotlight
While Ukraine grabs the headlines, investors aren’t forgetting inflation concerns, and are still worried that the Fed could lift rates higher and faster than expected.
St. Louis Federal Reserve President James Bullard (who is a member of the Fed’s rate-setting committee) said overnight that the Fed may have to do just that, saying there is “a lot of inflation in the US” and that “our credibility is on the line here. We have to react to data. However, I think we can do it in a way that is organized and not disruptive to markets.”
Reflecting market concerns, the VIX Volatility index – the so-called “Fear Index” – jumped a further 4.6% overnight.
Back home on the ASX, the S&P/ASX 200 (ASX: XJO) is set to follow US markets lower at the open this morning. For a round-up of the latest news, check out my ASX 200 morning report.
