Overseas, the pan-European

Stoxx 600
increased by 0.2%. In Asia, Hong Kong

Hang Seng Index
closed the week with a daily loss of 1.9%, as the region’s stock exchanges took inspiration from the dismal trading on Wall Street on Thursday.

Stock market sentiment over the past week has been dominated by the threat of war in Eastern Europe. Russia has built up an intense military presence on Ukraine’s border as it opposes the country’s possible membership in the North Atlantic Treaty Organization, the Western defensive alliance.

A respite was granted on Friday in the form of diplomatic progress: US Secretary of State Antony Blinken and Russian Foreign Minister Sergei Lavrov are due to meet next week.

“Geopolitics continues to be on a knife edge,” said Deutsche Bank strategist Jim Reid, leading to “significant market risk” among several asset classes.

From an investor’s point of view, one of the most important consequences of the Ukrainian crisis is its impact on oil supply. Global crude supply is tight and demand fundamentals are solid; prices were already trading around seven-year highs before Russia increased pressure on Ukraine.

Russia is one of the largest oil producers in the world, so sanctions or any other restrictions on its supply could drive up the price of the commodity even further.

Oil prices were volatile and sharply lower on Friday amid signs of diplomatic progress. West Texas Intermediate crude futures fell 2.5% to well below $90 a barrel. The U.S. oil benchmark traded above $95 at times this week amid heightened tensions.

It has been an exciting time for investors. Stocks first sold off late last week as the US warned of war in days, with Thursday seeing one of the worst days for stocks in 2022 amid concerns growing concerns about the imminence of an invasion of Ukraine.

The markets received mixed messages. The Russian Defense Ministry claimed it was pulling troops from the border on Tuesday, but any optimism was quickly overwhelmed by NATO and US officials, who said Russia had in fact stepped up its military presence in the region. Ukraine’s allegations of ceasefire violations, shelling in eastern Ukraine and reports of close encounters between US and Russian military aircraft have not improved the situation.

“An olive branch was handed out this morning,” Reid said, referring to Blinken’s plans to meet Lavrov. “The United States said they would meet as long as there was no prior invasion. This can help avoid risk reduction before the weekend as without it I suspect few traders would have wanted to go home too long.

Other analysts noted that low liquidity heading into the U.S. holiday weekend could exacerbate volatility.

Along with stocks and commodities, Bitcoin and other cryptocurrencies have felt the pinch of a risk-averse mood among investors. The leading digital asset is down around 6% in the past 24 hours, but is holding above $40,000, according to data from CoinDesk. The crypto fell below $34,000 earlier this year, but was trading near $45,000 earlier this week.

Worries about war in Europe and the threat to global oil supplies are the last things the stock market needs.

Traders have been blown away this year, with the S&P 500 down nearly 9% since early January as the Federal Reserve prepares to raise interest rates. Against a backdrop of historically high inflation, the central bank is expected to raise rates several times this year, starting next month. Uncertainty about the number of hikes to come and their magnitude worries investors.

Here are three stocks in motion on Friday:

Roku

(ticker: ROKU) fell more than 25% in the US pre-market, after the streaming group reported revenue below Wall Street expectations, with executives warning of continued disruptions to the channel. supply.

Renault

(RNO.France) rose nearly 1% in Paris trading, after the automaker reported a return to full-year profits after two consecutive years of losses, posting a profit of 888 million euros ($1 billion ), above expectations of 819 million euros.

Hermes

(RMS.France) fell nearly 5% in Paris trade, after the luxury group posted sales below expectations, citing production caps that limited sales growth in the fourth quarter, despite a strong request.

Write to Jack Denton at [email protected]