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(Reuters) – U.S. stock indexes were mixed in volatile trading on Monday amid concerns about higher interest rates, while comments from a Russian official eased worries about a possible invasion on Ukraine.
Seven of the 11 major S&P sectors declined in early trading, with energy shares down 2% as oil prices eased after Ukraine hinted at concessions to Russia. [O/R]
Russian Foreign Minister Sergei Lavrov suggested to President Vladimir Putin that Moscow continue along the diplomatic path in its efforts to extract security guarantees from the West, as tensions soar over Ukraine.
The comments appeared to signal a reduced likelihood of imminent Russian military action after repeated warnings from the United States that Russia could attack Ukraine at any time.
“The escalation of Russia and Ukraine tensions come at a time when the stock market is already vulnerable given inflation worries and the potential for Federal Reserve tightening,” said George Ball (NYSE:BLL), chairman of Sanders Morris Harris.
“If an armed conflict between Russia and Ukraine is somehow avoided, a short-lived relief rally is likely, but there are still too many worries on the horizon for any type of longer lasting upward move higher in stocks.”
At 9:58 a.m. ET, the Dow Jones Industrial Average was down 162.48 points, or 0.47%, at 34,575.58 and the S&P 500 was down 5.19 points, or 0.12%, at 4,413.45.
The Nasdaq Composite was up 56.63 points, or 0.41%, at 13,847.79 on gains in shares of chipmakers Nvidia (NASDAQ:NVDA) Corp, Advanced Micro Devices (NASDAQ:AMD) and Tesla (NASDAQ:TSLA) Inc.
Advanced Micro Devices rose 3% as the semiconductor designer finalized the purchase of Xilinx Inc (NASDAQ:XLNX) in a record chip industry deal valued at about $50 billion.
Wall St futures whipsawed in the premarket session after St. Louis Federal Reserve President James Bullard in an interview with CNBC stuck to his call for a 100 basis point rate hike by June, saying the Fed needs to reassure to the public that it will defend its 2% inflation target.
Traders priced in a 67% chance for a 50 basis point hike in March following Bullard’s comments, from 56% previously, according to CME Group’s (NASDAQ:CME) Fedwatch tool.
The major indexes had a rocky start to 2022, with the tech-heavy Nasdaq down 11.4% so far this year as worsening price pressures ramped up traders’ bets for a half-point rate hike at the Fed’s March meeting.
Market participants now await producer prices data for January and minutes from the U.S. central bank’s most recent monetary policy meeting later this week.
Meanwhile, the fourth-quarter earnings season is in full swing, with profits for S&P 500 companies now expected to grow 31% year-over-year.
Goodyear Tire & Rubber Co gained 6.5% after J.P. Morgan upgraded the tire manufacturer’s stock to “overweight” from “neutral”.
Declining issues outnumbered advancers for a 1.03-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.23-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and seven new lows, while the Nasdaq recorded 14 new highs and 100 new lows.
