Stocks up, fear down on Wall Street despite Ukraine invasion

NEW YORK — Wall Street capped a turbulent week of trading Friday with a broad rally for stocks as relief flowed through the market, even as deadly attacks raged in Ukraine. Oil fell and investors turned away from gold and other traditional havens they favor when fear is high.

The S&P 500 climbed 2.2% and notched its first weekly gain in three weeks. The benchmark index was following up on a wild Thursday when it careened from a 2.6% loss to a gain of 1.5%. Stocks have swung sharply with uncertainty about how much Russia’s invasion will push up inflation, particularly oil and natural gas prices, and drag on the global economy.

Such big swings are likely to continue, with so much uncertainty not only about Ukraine but also about interest rates. The Federal Reserve is caught in a delicate dance where it has to raise interest rates enough to rein in high inflation but not so much as to cause a recession.

On Friday, at least, the mood was calmer. A measure of fear on Wall Street, which shows how worried traders are about upcoming swings in stock prices, fell 9%. Gold dropped 2% after rallying for weeks on worries about Russia and Ukraine. Treasury yields held relatively steady, signaling investors weren’t scrambling for safety as they had immediately after Russia’s invasion.

A U.S. government report showed that that inflation last month was roughly in line with economists’ expectations, though it was still high. It also showed the main engine of the U.S. economy, spending by consumers, strengthened by more than economists expected.

The economic reports could be enough to convince the Federal Reserve to hold off on raising short-term rates next month by double its usual increase, at least for now, said Brian Jacobsen, senior investment strategist at Allspring Global Investments. That’s something some Fed officials had suggested, and it’s something investors usually fear because higher rates put downward pressure on all kinds of investments. Whatever size it is, the rate increase would be the first since 2018.

All the renewed calm in global financial markets, though, was against the backdrop of Russia pressing its invasion of Ukraine to the outskirts of the capital Friday after unleashing airstrikes on cities and military bases and sending in troops and tanks from three sides in what amounts to the largest ground conflict in Europe since World War II.

The S&P 500 rose 95.95 points to 4,384.65. The Dow Jones Industrial Average rose 834.92 points, or 2.5%, to 34,058.75. The Nasdaq composite gained 221.04 points, or 1.6%, to 13,694.62 after swinging between modest gains and losses. A day earlier, it briefly fell more than 20% below its record high, before roaring back suddenly.

Smaller company stocks also notched gains. The Russell 2000 index rose 44.92 points, or 2.3%, to 2,040.923.