Wall Street closed lower on Friday as market participants remained highly concerned regarding the ongoing Russia-Ukraine war. Investors’ sentiment was also dented by weak economic data. All three major stock indexes ended in negative territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) dropped 0.7% or 229.88 points to close at 32,944.66. Notably, 22 component of the 30-stock index ended in red while 8 finished in positive zone. The tech-heavy Nasdaq Composite finished at 12,843.81, sliding 2.2% or 286.15 points due to the weak performance of large-cap technology stocks.

Meanwhile, the S&P 500 declined 1.3% to end at 4,204.31. All 11 broad sectors of the benchmark index closed in negative zone. The Technology Select Sector SPDR (XLK), the Consumer Discretionary Select Sector SPDR (XLY), the Communication Services Select Sector SPDR (XLC) and the Consumer Staple Select Sector SPDR (XLP) tumbled 1.8%, 1.9%, 1.8% and 1.2%, respectively.

The fear-gauge CBOE Volatility Index (VIX) was up 1.7% to 30.75. A total of 13 billion shares were traded on Friday, lower than the last 20-session average of 13.6 billion. Decliners outnumbered advancers on the NYSE by a 2.83-to-1 ratio. On Nasdaq, a 2.54-to-1 ratio favored declining issues.

Russia – Ukraine Conflict Continues

The geopolitical conflict between Russia and Ukraine heightened as Russia started entering more territories of Ukraine with massive shelling and missile firing that devastated a major part of Ukraine. Four negotiation meetings between Russia and Ukraine ended without any fruitful result. Market participants are highly concerned that this war will further elevate the level of inflation globally. Moreover, higher commodity prices may result in a reduction in aggregate demand, indicating stagflation, especially in Europe.

On Mar 11, President Joe Biden has called for stripping out Russia from the status of most favored nations in relation to  trade with the United States. The European Union is also thinking imposing more sanctions on Russia and several of Russia’s elite oligarchs.

Higher Yield on Government Bonds

On Mar 11, the yield on the benchmark 10-Year U.S. Treasury Note climbed more than 2%. The U.S. inflation rate is currently at 40-year high and the Fed will increase the benchmark interest rate in March for the first time in three years.

Higher interest rate is detrimental to growth sectors like technology, consumer discretionary and communication services. Consequently, shares of technology stocks like Meta Platforms Inc.   and Zoom Video Communications Inc. (ZM Quick QuoteZM - Free Report) tanked 3.9% and 5%, respectively. Meta Platforms carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The University of Michigan reported that the preliminary data of consumer sentiment index for the month of March nosedived to 59.7% from February’s level of 62.8%. The consensus estimate was 61.3%. The study also found that expectations for inflation over the next year increased to 5.4% from February’s level of 4.9%, marking the highest level since 1981.

Weekly Roundup

Last week was a disappointing one for Wall Street. The three major stock indexes – the Dow, the S&P 500 and the Nasdaq Composite – plummeted 2%, 2.9% and 3.5%, respectively. The Dow recorded a losing streak for five straight weeks, its longest losing run since the week ending May 31, 2019.

The S&P 500 and the Nasdaq Composite posted two consecutive weeks of losses. The nightmare of these indexes continues owing to record-high inflation, a higher interest rate regime and the ongoing Russia-Ukraine war.