Technology stocks dragged down the equity market ahead of Friday’s jobs report as traders weighed the economic impacts of the war in Ukraine. The rally in oil eased, with crude experiencing an extraordinary run of volatility.

The S&P 500 erased gains, while the tech-heavy Nasdaq 100 underperformed major benchmarks as megacaps Tesla Inc. and Inc. sank at least 2.7 per cent. West Texas Intermediate topped US$116 before pulling back. Zinc reached its highest since 2007 and aluminum jumped to a record as industrial metals extended a surge fueled by trade turmoil and the increasing economic isolation of Russia.

Traders awaited the government’s employment report, which is currently forecast to show the U.S. added 415,000 jobs in February. Rapid wage growth in the U.S. likely isn’t retreating any time soon. Along with soaring commodities prices since Russia’s invasion of Ukraine, high labor costs are yet another factor the Federal Reserve will have to contend with as it prepares to raise interest rates to tamp down inflation.

Fed Chair Jerome Powell said the surge in energy prices will likely spill into inflation and if that shift proved to be lasting, it could put upward pressure at the “margin” to longer-term expectations that the central bank wants to stop creeping up. He also noted the conflict in Ukraine could hit sentiment, harming investment spending.

President Joe Biden’s administration said it would sanction eight wealthy Russians and their families and impose visa restrictions on 19 others and 47 of their family, as the U.S. and its allies seek to raise pressure on the elites around President Vladimir Putin in response to the invasion of Ukraine.


  • “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.”
  • “There has been a lot of daily volatility which I don’t expect to subside,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “Even if volatility will remain heightened, we are not worried for a recession. I believe there will be a growth slowdown, specifically because of heightened global commodity prices.”
  • “Volatility is going to continue to be around and an issue,” said Mark Stoeckle, chief executive officer of Adams Funds. “We are positioned for oil to go higher. There’s no question that this is going to be a headwind.”
  • “Policy makers are facing an unenviable situation over the near-term; inflationary pressures are mounting while the broader outlook grows more uncertain by the day,” wrote Deutsche Bank strategist Jim Reid.

Investors dumped risk assets during Russia’s invasion of Ukraine but they found a haven in junk. U.S. high-yield corporate bonds rallied over the last week, thrashing investment-grade, which is much more susceptible to rising rates. Strategists expect the debt to continue to do well, even as higher-rated bonds sell off.

Treasuries reached “extreme overbought territory” prior to Wednesday’s rebound in yields, according to JPMorgan Chase & Co. strategists. On a technical basis, the bank’s strategists still view the bear market as intact and expect the 10-year yield to exceed 2 per cent in the months ahead.

Some of the main moves in markets:


  • The S&P 500 fell 0.5 per cent as of 4 p.m. New York time
  • The Nasdaq 100 fell 1.5 per cent
  • The Dow Jones Industrial Average fell 0.3 per cent
  • The MSCI World index fell 0.6 per cent


  • The Bloomberg Dollar Spot Index rose 0.3 per cent
  • The euro fell 0.5 per cent to US$1.1063
  • The British pound fell 0.5 per cent to US$1.3339
  • The Japanese yen was little changed at 115.45 per dollar


  • The yield on 10-year Treasuries declined three basis points to 1.85 per cent
  • Germany’s 10-year yield was little changed at 0.02 per cent
  • Britain’s 10-year yield advanced four basis points to 1.30 per cent


  • West Texas Intermediate crude fell 2.2 per cent to US$108.20 a barrel
  • Gold futures rose 0.9 per cent to US$1,939.50 an ounce