NEW YORK (AP) – U.S. markets headed for a higher opening Friday after solid gains in Europe as uncertainty over the war in Ukraine and persistently high inflation continue to rock markets. Asian markets declined overnight.
Investors worry about a global economy facing pricing pressures and slowing growth. Oil prices rose on Friday as Russian forces widened their offensive in Ukraine, attacking two major cities in the west and an industrial center in the east of the country.
On Wall Street, futures for the Dow Jones Industrial Average were up 1.1% Friday morning and 1.3% for the S&P 500.
Germany’s DAX was up 3.2% through midday, the CAC 40 in Paris was up 2.2% and London’s FTSE 100 was up 1.4%.
A plan to strip Russia’s trade status from the most favored nation over its invasion of Ukraine heightened unease about the economic fallout from the deepening conflict after talks between the two countries’ foreign ministers showed no concrete progress.
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President Joe Biden plans to announce the change Friday, according to a source familiar with the matter, who spoke on condition of anonymity to preview the announcement. It will allow the US and other major industrialized countries to impose tariffs on some Russian exports.
The move is likely to have little impact on trade as it will have a negligible impact on most exports of oil, gas and other Russian resources, experts said.
Given the potential for big surprises while markets are closed, investors stayed on the sidelines ahead of the weekend, analysts said.
“When confidence is low, risk managers are in the driver’s seat, keeping liquidity from banks and market makers to a minimum, which could exacerbate intraday moves,” API Asset Management’s Stephen Innes said in a comment.
“No wonder, because predicting daily market movements is about as consistent as tossing a coin,” Innes said.
In Asian trading, Tokyo’s Nikkei 225 index fell 2.1% to 25,162.78 and Hong Kong’s Hang Seng fell 1.6% to 20,553.79.
The Shanghai Composite Index reversed earlier losses and rose 0.4% to 3,309.75 after Chinese Premier Li Keqiang, the country’s No. 2, said the government hopes to add up to 13 million jobs this year .
As China’s largely ceremonial legislature concluded its annual session, Li pledged “pro-employment policies” including a total of 2.5 trillion yuan ($400 billion) in tax and fee cuts for businesses. Such measures are intended to counter a slowdown in growth, which contracted to 4% year-on-year in the final quarter of 2021, compared with an expansion of 8.1% for the full year.
Rising coronavirus cases in both mainland China and Hong Kong have led to concerns haunting their markets.
Seoul’s kospi fell 0.7% to 2,661.28. In Australia, the S&P/ASX 200 was down 0.9% to 7,063.60.
Oil prices have softened after sharp swings earlier in the week. U.S. benchmark crude rose 52 cents to $106.54 a barrel in electronic trading on the New York Mercantile Exchange. It fell $2.68 to $106.02 a barrel on Thursday.
Brent crude, the basis for international pricing, rose 66 cents to $109.99 a barrel in London.
Both it and U.S. crude are up more than 40% so far for 2022, although they remain below the highs they set earlier this week when U.S. oil briefly topped $130.
The reciprocations of oil are just some of the waves shaking the markets as volatility has become the norm since the Russian invasion of Ukraine, raising concerns about how high prices for oil, wheat and other commodities are rising become, has strengthened.
Investors were already on edge as high inflation is urging central banks to hike interest rates and halt programs to support the global economy for the first time since the pandemic began.
A report on Thursday showed that US consumer prices rose 7.9% year on year in February, the sharpest rise since 1982. The reading was broadly in line with expectations and did not include recent increases in oil and gasoline prices. It also didn’t reach the 8% threshold that could trigger an alarm.
The Federal Reserve is expected to hike its short-term interest rate by a quarter of a point next week, the first hike since 2018. Higher interest rates are slowing the economy and the Fed is trying to raise them enough to curb inflation, but not by as much as that there will be a recession.
In other trading, the 10-year government bond yield, which tracks expectations for inflation and economic growth, fluctuated immediately after the Inflation Report was released. It rose to 2% from 1.94% late Wednesday. As of early Friday, it was at 2.02%.
The US dollar rose to 116.88 yen from 116.11 yen, hovering near its highest level in six years against the Japanese currency. The euro rose to $1.1016 from $1.0987.
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