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Business

Stocks Waver After Producer Prices Rise More Than Expected

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Stocks wavered after producer-price data came in hotter than expected, disappointing investors who had hoped for signs of easing inflation before the Federal Reserve’s meeting next week.

The S&P 500 was flat on Friday morning, while the Dow Jones Industrial Average lost 0.1%. The technology-focused Nasdaq Composite rose 0.2%.

The producer-price index, which measures what suppliers are charging businesses and other customers, climbed 0.3% in November compared with the previous month, the Labor Department said Friday morning, the same as October’s revised 0.3% increase. Economists surveyed by The Wall Street Journal had expected U.S. supplier prices to increase 0.2% for November.

Investors had been hopeful that the inflation reading would offer evidence that price pressures in the U.S. are abating and would help solidify a smaller interest-rate increase next week. The Fed will make its next interest-rate decision on Wednesday, and the PPI data—combined with consumer-price data Tuesday—are expected to factor heavily into the trajectory of interest rates over the coming months.

Stock futures, which had traded higher throughout the morning, turned lower after the data’s release. Yields on U.S. government bonds rose, also reversing their performance earlier in the day.

In recent days, investors have grown increasingly worried that elevated inflation will force the Fed to keep lifting rates to higher levels than once expected, potentially pushing the U.S. economy into a recession.

“Even though the market sometimes seems to ignore Powell, thinking he’s bluffing, he keeps reiterating that he will put this economy into a recession if he has to,” said Eric Sterner, referring to Fed chairman

Jerome Powell.

Mr. Sterner, chief investment officer at Apollon Wealth Management, said he expects markets could retest their recent lows in the first and second quarter of next year.

“We’re stuck in this rut right now waiting for inflation to normalize and it may take all of next year for that to happen,” he said.

Those concerns about how high interest rates might go—and how they will affect the economy—have led to choppy trading in U.S. stocks recently and interrupted a rally that began in October. All three major U.S. indexes are on pace to end the week with losses, breaking a two-week winning streak. As of Thursday, the S&P 500 had fallen 2.7% for the week.

“The markets are so sensitive to this right now,” said Susannah Streeter, senior investment and markets analyst at

Hargreaves Lansdown.

“Although supersized rate hikes are probably in the rearview mirror, it’s about how long more gradual rate increases will continue for, and that’s why you’ve got these twin evils looming: recession and high inflation. That’s the real concern—that we’ll get a stagflation scenario.” 

The S&P 500 on Thursday snapped a five-day losing streak.



Photo:

BRENDAN MCDERMID/REUTERS

Yields on government bonds rose, with the yield on the benchmark 10-year U.S. Treasury note climbing to 3.525%, from 3.492% Thursday. The yield on the two-year note, which is more sensitive to near-term interest-rate expectations, rose to 4.332%. Yields rise when bond prices fall.

Brent crude, the international benchmark for oil prices, climbed 1.1% to $77 a barrel, on pace to possibly break a six-session losing streak that amounted to its longest since August 2021. Oil prices have slumped recently amid concerns that slowing economic growth will impede demand for fuel. Both Brent and its U.S. counterpart WTI—both of which reached eye-popping heights this year—are now trading lower on a year-to-date basis.

Outsize market moves have followed the release of inflation data in recent months.

“When CPI comes out slightly above or slightly below, you get massive market action,” said Brandon Pizzurro, director of public investments at GuideStone Capital Management. “Those of us that are defensively positioned are either going to really benefit from next Tuesday and Wednesday, or feel some short term pain if this Santa Claus rally is kickstarted.”

In China, major indexes climbed amid a sharp rise in property stocks. Hong Kong’s Hang Seng rose 2.3%. In mainland China, the Shanghai Composite added 0.3%, helping it notch its sixth consecutive week of gains. Japan’s Nikkei 225 gained 1.2%.

In Europe, the pan-continental Stoxx Europe 600 rose 0.4%.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Jack Pitcher at jack.pitcher@wsj.com 

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Business

Stocks waver as indexes head toward losing week

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U.S. stocks moved back and forth Friday as investors neared the end of a turbulent trading week marked by mixed retail earnings and a chorus of hawkish Fedspeak.

The S&P 500 (^GSPC) fell 0.1%, while the Dow Jones Industrial Average (^DJI) was up 60 points, or 0.2%. The technology-heavy Nasdaq Composite (^IXIC) slid 0.6%. Treasury yields continued their ascent, with the benchmark 10-year note back above 3.8% and the rate-sensitive 2-year yield inching towards 4.5%.

An assembly of Fed officials on Thursday pushed back against speculation that a pause on monetary tightening is close. The remarks made in separate speaking engagements across the country sent stocks and bonds into disarray after a fleeting uptrend propelled by lighter inflation data.

Inflation has only recently shown signs of moderation, with consumer and producer price data still stubbornly high despite retreating in October. Meanwhile, U.S. retail sales rose at the fastest clip in eight months over the same period, prompting policymakers to hammer down on strict messaging about the work still needed to be done to tamp down elevated costs.

Minneapolis Federal Reserve Bank President Neel Kashkari said in a Minnesota Chamber of Commerce event webcast that the extent policymakers expect to raise their key federal funds rate remains an “open question.” His comments came after St. Louis Fed President James Bullard and ​​San Francisco Fed President Mary Daly each said the central bank is looking at a terminal rate of up to 5.25%.

President and CEO of the Federal Reserve Bank of St. Louis James Bullard. (ISAAC LAWRENCE/AFP via Getty Images)

“Fed Chair Powell recalibrated monetary policy at the November FOMC meeting by adopting a new ‘speed vs. destination’ paradigm – indicating an intention to reach a higher terminal fed funds rate while doing so at a slower pace,” EY Parthenon Chief Economist Gregory Daco said in a note. “The difficulty for the Fed will be to prevent an excessive and counter-productive loosening of financial conditions in the face of weaker-than-expected inflation.”

Goldman Sachs Group on Thursday also lifted its forecast for the Federal Reserve’s terminal rate to a range of 5% to 5.25%, tacking another 25-basis-point hike in May after increases of that size in February and March, and half a percentage point in December.

“Inflation is likely to remain uncomfortably high for a while, and this could put pressure on the FOMC to deliver a longer string of small hikes next year,” economists led by Jan Hatzius also said.

In the shadow of renewed rate jitters, Gap (GPS), Ross Stores (ROST), and Williams-Sonoma (WSM) rounded out a busy week of retail earnings.

Shares of Gap jumped 3% Friday after the company unveiled results that topped Wall Street estimates. Chief Financial Officer Katrina O’Connell, however, emphasized the macroeconomic environment remains challenging, but that Gap will take a “prudent approach in light of the uncertain consumer.”

Ross Stores shares rallied as much as 18%, the most in two years, after the retail chain beat on earnings forecasts and lifted its fourth-quarter guidance, citing sales momentum and improved assortments for the holidays.

Meanwhile, shares of home furnishings store Williams Sonoma sank nearly 10% after it pulled its guidance through 2024 over “macro uncertainty.”

—

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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Business

Stocks Waver After Suffering Worst Day Since June 2020

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U.S. stocks wobbled between small gains and losses Wednesday, coming off a wild day of trading spurred by a stronger-than-expected inflation report.

The S&P 500 dropped 0.1%, a day after the benchmark index plummeted 4.3% in its worst selloff since June 2020. The Dow Jones Industrial Average fell 0.3%, while the tech-focused Nasdaq Composite gained 0.1%.

The release of U.S. inflation data for August on Tuesday spurred volatile moves across asset classes. The consumer-price reading showed the core inflation index, which excludes volatile energy and food figures, increased last month from a year earlier—indicating that broad price pressures strengthened.

The hot inflation report curbed investors’ hopes the Federal Reserve might slow its aggressive pace of interest-rate increases. That led traders on Tuesday to dump stocks across all sectors, sell bonds and cryptocurrencies, and push the U.S. dollar higher.

On Wednesday, markets seemed to take data measuring U.S. suppliers’ prices in stride. The producer-price index, which measures what suppliers are charging businesses and other customers, declined 0.1% from the month before, in line with economist expectations.

“We witnessed violent moves in the market yesterday as we reprice Fed and economic risk expectations,” said

Megan Horneman,

chief investment officer at Verdence Capital Advisors. “Today we’re absorbing such a destructive day.”

The latest U.S. inflation data curbed investors’ hopes the Federal Reserve might slow its aggressive pace of interest-rate increases.



Photo:

Julia Nikhinson/Associated Press

Some of Tuesday’s sharp market moves started to unwind Wednesday. The WSJ Dollar Index lost 0.4%, after notching its largest one-day jump since March 2020. Brent crude, which fell the day before, rose 1.3% to $94.32 a barrel.

Energy stocks rose broadly as Brent crude rebounded. The sector was the top gaining segment of the S&P 500 on Wednesday.

Among the top individual gainers in the S&P 500,

Starbucks

rose 5.8% after the coffee chain raised its longer-term financial outlook. The company now sees adjusted earnings-per-share growth over the next three years of 15% to 20%, up from its previous forecast of 10% to 12%.

Also making the index leaderboard,

Moderna

shares climbed 5.1% after its CEO told Reuters the company is open to supplying Covid vaccines to China.

Shares of railroad operators declined as a possible freight labor strike looms. The White House is assessing how other transportation providers could fill potential gaps in the nation’s freight network as labor unions and railroads continue contract talks.

Union Pacific

lost 4.9%, and

CSX

fell 3.1%.

Few market watchers were willing to suggest that volatile market moves may be in the rear-view mirror—especially until the Fed’s next meeting.

The Fed will make its next interest-rate policy decision next week. Federal-funds futures, used by traders to bet on interest-rate moves, showed a 68% chance that the central bank will lift rates by 0.75-percentage point. The data also show traders are assigning a 32% probability that the Fed will increase interest rates by 1 percentage point, according to CME Group data.

U.S. Treasury yields continued their upward climb, in another signal that investors are expecting higher interest rates.

The yield on the 10-year U.S. Treasury note rose to 3.427%, from 3.422% Tuesday. The yield on the two-year note, which is more sensitive to near-term rate expectations, climbed to 3.789%, from 3.754%. Yields and bond prices move in opposite directions. 

Some investors and strategists said the market may have overreacted Tuesday, especially after Fed Chairman

Jerome Powell

already said last month in Jackson Hole that the central bank must continue raising interest rates until it is confident inflation is under control.

“You’ve got this tension with dip buyers versus those who are selling the rally,” said Viraj Patel, global macro strategist at Vanda Research. “I think you can paint a very nice bullish picture and find plenty of evidence to buy equities, and you can paint a very nice bearish picture and find plenty of evidence to sell. That naturally means we are going to bounce around for a bit.”

Overseas, global indexes fell, following the U.S. stock market’s performance Tuesday. In Europe, the pan-continental Stoxx Europe 600 lost 1%. London’s FTSE 100 fell 1.2%, after U.K. inflation data showed that core consumer prices ticked up to 6.3% in August, from 6.2% in July, even as inflation eased slightly overall

In Asia, Hong Kong’s Hang Seng Index lost 2.5%, and the CSI 300 index of the largest stocks listed in Shanghai and Shenzhen was down 1.1%. Japan’s Nikkei 225 tumbled 2.8%.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Dave Sebastian at dave.sebastian@wsj.com

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Business

Stocks Waver to Kick Off August Trading

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U.S. stocks wavered Monday to start a new month of trading after finishing July with their best month since 2020. 

Major indexes edged lower in early afternoon trading and spent much of the day flitting between gains and losses. The S&P 500 recently dropped 0.6%, while the Dow Jones Industrial Average fell 0.4%. The technology-focused Nasdaq Composite Index lost 0.5%.

Shares of

Boeing

rose 5.8% after the plane maker temporarily avoided a strike at three defense manufacturing plants and cleared a regulatory hurdle for resuming deliveries of its 787 Dreamliner.

U.S. stocks mounted a furious recovery in recent weeks, boosted by positive signals from earnings and expectations that the Federal Reserve may not need to raise interest rates as aggressively as once thought, spurring a rally in government bonds alongside stocks. 

“The market’s beginning to price in the end of Fed tightening rather quickly, and I think it’s going to be disappointed. I think the market’s a bit ahead of itself here,” said Thomas H. MacCowatt, partner at Williams Jones Wealth Management. 

Last week, officials approved another 0.75-percentage-point interest-rate increase. But traders are now betting that the size of rate increases will be smaller for the rest of the year.

“This has been a very rapid repricing of bond and equity markets,” said

Edward Park,

chief investment officer at U.K. investment firm Brooks Macdonald. “I fear, however, it might be a bit premature based on what was said out of the Federal Reserve last week.” 

Mr. Park noted that Monday’s weakness in stock futures suggested investors are likely taking a breather after the S&P 500 finished Friday with a 9.1% gain for July. He added that traders are in “wait and see” mode ahead of Friday’s jobs report. Economists surveyed by The Wall Street Journal expect the U.S. economy to have added 250,000 jobs in July, down from 372,000 in June.

Strong employment is the remaining pillar propping up consumer sentiment and stopping the economy from seeing a “full-blown recession,” said Aoifinn Devitt, chief investment officer of Moneta.

“We are probably well poised for another good end to the summer. I see a lot of the negative negative news has been baked in,” Ms. Devitt said.

Investors’ expectations for a less aggressive Fed have been evident in federal-funds futures, which are used by traders to place bets on the course of interest rates. Such futures on Monday morning showed a nearly 69% probability that the Fed will raise its key interest rate by half a percentage point in September, up from just 44% last week, according to CME Group. They also are assigning a smaller probability to a 0.75-percentage-point increase compared with a week ago.

Shifting expectations for central-bank policy for the rest of the year have scrambled other areas of financial markets in recent days, upending some trades that have flourished this year. The U.S. dollar, for example, which has staged a prolonged rise in 2022, fell on Monday for a fourth consecutive session, with the WSJ Dollar Index losing 0.6%. 

The Japanese yen, meanwhile, advanced again, rising 0.8% against the dollar. The yen’s recent rise has challenged a popular trade on Wall Street this year: betting against the Japanese currency.

In the bond market, the yield on the 10-year U.S. Treasury note traded at 2.61%, down from 2.642% Friday. The yield on the benchmark note has come down significantly from its closing high of 3.482% reached in June.

The yield on the two-year Treasury note, meanwhile, traded at 2.892%, compared with 2.897% Friday, to keep the so-called yield curve inverted. That market signal, which occurs when short-term Treasury yields trade higher than long-term yields, is often seen as a key predictor of a recession. 

In individual companies, U.S.-traded shares of

Alibaba

moved 0.9% lower after the company said it would work to stay listed on the New York Stock Exchange. The Securities and Exchange Commission on Friday added Alibaba to a list of Chinese companies at risk of being delisted from the U.S. exchanges if their auditors can’t be inspected before spring 2024.

Shares of

EVO Payments

surged 23% to $33.71 after

Global Payments

said it would buy the payments-technology company and pay $34 a share in an all-cash deal. Global Payments shares rose 4.8%.

Shares of

PerkinElmer

rose 5.8% after it announced it will sell its applied, food and enterprise services business to private-equity firm New Mountain Capital for $2.45 billion in cash.

Later Monday, investors will parse earnings from companies including Diamondback Energy,

Pinterest

and

Activision Blizzard,

all of which report after the closing bell.

In energy markets, Brent crude fell 3.9% to $93.81 a barrel.

A trader worked on the floor of the New York Stock Exchange on Wednesday.



Photo:

BRENDAN MCDERMID/REUTERS

Overseas, the pan-continental Stoxx Europe 600 dipped 0.2%. London-traded shares of

HSBC Holdings

rose 6.1% after the global banking giant said profit rose 62% in the second quarter from a year earlier.

In Asia, indexes ended mostly higher, despite data showing Chinese manufacturing activity unexpectedly contracted in July. China’s Shanghai Composite rose 0.2% and Japan’s Nikkei 225 jumped 0.7%.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com

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Corrections & Amplifications
Economists surveyed by The Wall Street Journal expect the U.S. economy to have added 250,000 jobs in July. A previous version of this article stated that economists expected that the U.S. economy added that many jobs in June. (Corrected on Aug. 1)

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World

Stocks Waver After Paring Morning Losses

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U.S. stocks edged lower on Tuesday, resuming their recent downward trajectory after last week’s rally.

The S&P 500 dropped less than 0.1% in midday trading, paring losses a day after U.S. markets were closed for Memorial Day. After snapping a seven-week losing streak last week, the benchmark index has regained some ground and is on track for a slight loss this month. The Dow Jones Industrial Average shed 0.1%, while the Nasdaq Composite rose 0.3%.

Crude prices initially jumped after EU leaders said that they would impose an oil embargo on Russia over its invasion of Ukraine, but later pared their gains. The sanctions are set to include a ban on insuring ships that carry Russian oil, The Wall Street Journal reported. They would include an exemption for oil delivered from Russia via pipelines, which make up one-third of EU oil purchases from Russia, limiting some of their market impact.

Futures for Brent crude, the global benchmark, were recently up 0.5% to $118.22 a barrel. West Texas Intermediate, the U.S. marker, rose 2% to $117.38 a barrel, playing catch-up after the market was closed Monday.

Tuesday’s session will cap another volatile trading month, during which stocks around the world swung wildly as traders tried to assess the outlook for global economies. In the U.S., stocks tumbled shortly after the month began and continued falling amid a slew of earnings and economic data that came in worse than expected. 

Throughout the month, profit warnings from companies ranging from

Snap

to

Target

intensified worries about the lingering impact of inflation, and spurred investors to dump shares across several industries.

By mid-May, it seemed the S&P 500 was bound to close in a bear market, defined as a drop of 20% or more from a recent high, before a late-month rally sent stocks racing higher. The S&P 500 is down about 14% from its January high. 

Professional and individual investors alike waded into last week’s rally in the U.S. markets, finding opportunities to scoop up stocks that have seen their valuations fall. However, the issues that sent stocks falling earlier this month have yet to abate.

Many traders remain worried that the Federal Reserve’s plans to raise interest rates aggressively could tip the U.S. economy into a recession. Meanwhile, concerns about an economic slowdown in China and sustained supply-chain disruptions due to the pandemic and the war in Ukraine have continued to weigh on investors’ minds.

“There’s a bit of market uncertainty just about the pretty rapid rally we’ve had,” said Brooks Macdonald Chief Investment Officer

Edward Park,

“and whether that can be sustained in a world where inflation is clearly still a factor.”

European Union leaders took a big step in the economic fight against Moscow over its invasion of Ukraine by agreeing to block 90% of Russian oil imports by year-end. The embargo faced opposition from countries highly dependent on Russian crude, especially Hungary. Photo: Olivier Matthys/Associated Press

New survey data released Tuesday showed U.S. consumer confidence declined slightly in May from the previous months. President Biden is also expected to meet with Fed Chairman

Jerome Powell

Tuesday at the White House. 

Nine of the S&P 500’s 11 sectors were down on Tuesday. The best-performing sector was energy, which rose on the back of climbing oil prices.

Marathon Oil,

Diamondback Energy

and Hess all advanced more than 1%.

U.S.-traded shares of

Unilever

jumped 9.8% after the consumer-goods company said it would add activist investor Nelson Peltz to its board and disclosed his fund now holds a 1.5% stake.

The S&P 500’s energy sector is on track to finish May with the largest gain among the benchmark index’s 11 groups, extending a trend that has flourished for much of 2022. But even some beaten-down stocks are set to end the month in the green, such as Netflix, Robinhood Markets and Zoom Video Communications. 

“When the S&P 500 is [close to entering] a bear market, that has a big psychological impact on those seeking value,” said

Craig Erlam,

senior market analyst at Oanda. “I think the question repeatedly being asked is, ‘Are we seeing a bottom in the markets?’”

In the bond market, the yield on 10-year Treasury notes rose to 2.868% from 2.748% Friday. Bond yields and prices move in opposite directions.

Overseas, the pan-continental Stoxx Europe 600 fell 0.8%, putting it on track to snap a four-session winning streak, after eurozone inflation rose faster than expected. Consumer prices rose 8.1% on the year in May—the fastest past since records began in 1997—after climbing at a 7.4% rate in April. The inflation report will likely factor into the European Central Bank’s coming interest-rate decisions. Earlier this month, ECB President

Christine Lagarde

indicated that the central bank could increase its key interest rate in July for the first time in 11 years.

Traders worked on the floor of the New York Stock Exchange on Friday.



Photo:

Courtney Crow/Zuma Press

In Asia, the Shanghai Composite Index rose 1.2% after the city’s government said a two-month lockdown would be lifted Wednesday. The shutdown, designed to limit Covid-19 transmission, had slowed the Chinese economy and added to inflationary pressures elsewhere in the world by gumming up supply chains.

Hong Kong’s Hang Seng rose 1.4%. Japan’s Nikkei 225 fell 0.3%.

—Alexander Osipovich contributed to this article.

Write to Caitlin McCabe at caitlin.mccabe@wsj.com and Joe Wallace at joe.wallace@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

European markets waver amid doubts over Russian withdrawl in Ukraine

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LONDON — European stocks are expected to open flat to lower on Wednesday following the latest round of talks between Russia and Ukraine, aimed at finding a solution to the conflict.

The U.K.’s FTSE index is seen opening 7 points higher at 7,536, Germany’s DAX 34 points lower at 14,767, France’s CAC 40 down 8 points at 6,775 and Italy’s FTSE MIB 43 points lower at 24,630, according to data from IG.

Investor sentiment was boosted on Tuesday following negotiations between Russian and Ukrainian officials in Turkey, at which Russia’s deputy defense minister claimed Moscow had decided to “drastically” cut back its military activity near Ukraine’s capital.

Alexander Fomin, who spoke following the talks in Instabul, said Russia would slow its military operations near Kyiv and Chernihiv in order for peace talks to progress. Russia previously claimed that it would reduce military operations in other parts of Ukraine but then continued its advance.

Follow our live Ukraine-Russia updates here

Growing hope for a cease-fire appeared to boost investor sentiment Tuesday, as Dow Jones Industrial Average futures rose 200 points, or 0.6%. S&P 500 futures also climbed 0.6%, while Nasdaq 100 futures climbed 0.7%. Meanwhile, the price of U.S. benchmark West Texas Intermediate crude oil, which spiked on the heels of Russia’s invasion of Ukraine, fell more than 4% to $100 per barrel.

Doubts have set in over the pledge, however, and while the Russian military has begun moving some of its troops in Ukraine away from areas around Kyiv to positions elsewhere in Ukraine, Pentagon Press Secretary John Kirby warned the troop movements do not amount to a retreat.

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Shares in Asia-Pacific were mixed in Wednesday trade as investors watch for developments surrounding the war in Ukraine. Stateside, traders are keeping tabs on a slew of key economic reports, while also monitoring the Federal Reserve’s planned interest rate hikes.

The Job Openings and Labor Turnover Survey on Tuesday showed 11.3 million job openings, higher than the 11.1 million expected. The ADP will also release its private payrolls data ahead of the closely watched monthly jobs report, on Friday.

Upcoming data releases include Russia’s latest reading of consumer and business confidence. Retailer Next is set to release its latest earnings.

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— CNBC’s Amanda Macias contributed to this market report.

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Business

Oil Jumps, Stock Futures Waver After Dow Enters Correction

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Stock futures wavered, while bond yields and oil prices rose, a day after fears of a recession pushed the Dow Jones Industrial Average into a correction.

Futures tied to the S&P 500 edged up 0.1% Tuesday, as did those tied to the blue-chip Dow Jones Industrial Average futures. Futures linked to the technology-heavy Nasdaq-100 edged down 0.3%.

Overseas, the Stoxx Europe 600 weakened 0.2%.

Brent crude, the international oil benchmark, jumped 5% to $129.44 a barrel, after The Wall Street Journal reported that the U.S. was set to imminently announce a ban on Russian oil imports. 

Investors are scrambling to analyze the likely broader impact of Russia’s invasion of Ukraine and the hardening Western response. Market volatility has jumped as relations between the West and Russia have hit new lows, while soaring commodity prices have raised the prospect that global growth could take a hit and have muddied the outlook for central banks seeking to tame inflation by raising interest rates. 

Despite appetite for assets perceived as havens, investors sold U.S. Treasury notes Tuesday. The yield on the benchmark 10-Year note rose to 1.859% from 1.748% Monday. Bond yields and prices move in opposite directions. 

“While there is still an element of the safe-haven trade, this is being overwhelmed by inflation concerns,” said

Seema Shah,

chief strategist at Principal Global Investors, said.

Gold added 1% to $2,014.90 a troy ounce, coming within sight of its record closing level.

Mandiant

fell almost 4% ahead of the opening bell after

Alphabet’s

Google said it had agreed to buy the cybersecurity firm for around $5.4 billion.

Uber

rose 1.6% after The Wall Street Journal reported that the ride-hailing company was launching a campaign to head off efforts to classify its workers as employees, which would allow them to form unions.

On Monday, the Dow Jones index slipped into correction territory for the first time in two years, the Nasdaq Composite index fell into a bear market and the S&P 500 experienced its worst one day decline in about a year-and-a-half. 

“I would say the market is in a state of shock. Given the tectonic shift we have seen, everyone is second guessing what the end game may be,” said Brian O’Reilly, head of market strategy at Mediolanum International Funds. 

The Dow Jones Industrial Average on Monday closed in correction territory for the first time in two years.



Photo:

Courtney Crow/Zuma Press

The impact has been most dramatic in commodity markets, due to Russia’s outsized role as a resource producer. Prices for oil, natural gas and key raw materials like metals and grains have soared, heaping pressure on businesses and households already feeling the pinch of rapidly rising inflation. Concerns that the U.S. could be poised to ban imports of Russian oil have sent crude prices soaring, driving fears of recession.

“Not every recession has been caused by an oil price spike but every oil spike has caused a recession,” said Mr. O’Reilly. “This is likely to be a drawn-out affair and will have a sustained impact on commodity prices.”

In Asia, stock markets slumped, following Monday’s moves on Wall Street. Japan’s Nikkei 225 fell 1.7%, while Hong Kong’s Hang Seng index dropped 1.4% to its lowest level since 2016.

Since Russia invaded Ukraine, the U.S. and allied countries have imposed heavy sanctions on Russia. WSJ’s Shelby Holliday dives into how these sanctions are affecting everyone from President Vladimir Putin to everyday Russian citizens. Photo: Pavel Golovkin/Associated Press

Write to Will Horner at william.horner@wsj.com

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Business

U.S. Stocks Waver Between Small Gains and Losses

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The S&P 500 waffled between small gains and losses Monday, continuing a volatile stretch for the stock market.

The broad stock-market gauge added 0.1%. The Nasdaq Composite hugged the flatline. The Dow Jones Industrial Average gained 0.4%.

Stocks have had a turbulent start to the year, amplified in recent days by extreme moves in big tech stocks. Last week saw a record-breaking decline in Meta Platforms shares and the biggest rise since 2015 for Amazon.com shares, after the companies posted earnings. Friday’s better-than-expected jobs report also turned traders’ attention back to central-bank policy, which is set to tighten as the economy continues to recover.   

On Monday, major indexes wavered between small gains and losses before turning higher toward the end of the day. Some analysts said the latest earnings season has helped draw investors back into stocks in recent sessions. Last week, the S&P 500 capped off its best week since December after several twists and turns.

“We think the earnings season has been pretty constructive,” said Greg Boutle, head of U.S. equity and derivative strategy at BNP Paribas.

Companies scheduled to post results this week include

Pfizer

and

KKR

on Tuesday and Uber Technologies and Walt Disney on Wednesday.

Coca-Cola,

PepsiCo

and

Twitter

are slated for Thursday. 

Despite the recent rebound, it’s been hard to impress investors this earnings season. Companies that are beating estimates are performing worse than they had historically, while those that are missing estimates are being punished,

JPMorgan Chase & Co.

strategists wrote in a note to clients Monday. This is one of several signs that investors have grown overly bearish in recent weeks, according to JPMorgan’s Marko Kolanovic.

“As overly bearish sentiment clears, we expect the market to lift,” Mr. Kolanovic said.

Shares of Meta and

Netflix

dropped Monday, losing 3.9% and 1%, respectively. Amazon continued to rise, adding 1.4%. The moves continue a recent divergence in so-called FAANG stocks that have led investors to shift how they trade the hot tech group.

The monthly jobs report reveals key indicators about the labor market and the overall state of the economy, but it doesn’t show the entire picture. WSJ explains how to read the report, what it shows and what it doesn’t. Photo illustration: Liz Ornitz

“We’ve been taking advantage of some volatility,” said Mike Bailey, director of research at FBB Capital Partners. “We’ve been adding to some of the tech names during the past few weeks.”

In corporate news, Peloton shares soared 23% after The Wall Street Journal reported that the stationary-bike company was drawing interest from Amazon and other potential suitors.

Spirit Airlines

added 17% after it said it was merging with Frontier Group.

Tyson Foods

climbed around 12% after it said it expected its sales for the year to be at the upper end of its guidance.

Hasbro

slipped around 0.5% after reporting revenue and profit that beat Wall Street’s estimates.

The yield on the 10-year Treasury note hovered at 1.914%, from 1.930% Friday.

“Markets have been repricing, as seen in the move up in yields, but I think we’re arriving at a point where it’s difficult to price in a much more hawkish outlook than we have today. We could now see a bit of stabilization,” said

Esty Dwek,

chief investment officer at FlowBank.

Friday’s better-than-expected jobs report turned traders’ attention back to central-bank policy, which is set to tighten as the economy continues to recover.



Photo:

David L. Nemec/Associated Press

Cryptocurrencies gained Monday, with bitcoin rising 5% from its level at 5 p.m. ET on Friday. It traded around $42,800. The digital currency rose above $40,000 Friday after spending two weeks below that level and has maintained its gains. 

Overseas, the pan-continental Stoxx Europe 600 added 0.7%. European government bond yields extended last week’s gains as markets continued to price in hawkish signals from the European Central Bank’s press conference on Thursday. Benchmark 10-year Italian and Greek bond yields rose to the highest levels since spring 2020.

In Asia, major benchmarks were mixed. The Shanghai Composite Index climbed 2%, reopening after China’s New Year holiday week, despite a private gauge of China’s services sector slipping to a five-month low. The gain was its best one-day rise since May.

Hong Kong’s Hang Seng Index closed roughly flat and Japan’s Nikkei 225 declined 0.7%. 

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Gunjan Banerji at gunjan.banerji@wsj.com

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Stocks Waver After Jobs Report, Tech Selloff

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U.S. stocks were mixed after the January jobs report beat expectations, putting investors on edge about the path of monetary tightening by the Federal Reserve.

The S&P 500 opened flat. The tech-focused Nasdaq Composite gained 0.6%, and the Dow Jones Industrial Average fell 0.3%.

U.S. payrolls grew by 467,000 in January, the Labor Department said Friday. Economists surveyed by The Wall Street Journal had expected a gain of 150,000.

Major indexes Thursday saw losses after megacap technology companies helped drag the market down.

Facebook

owner Meta Platforms in particular plunged after a disappointing earnings report.

Amazon.com

shares rallied 12% premarket after the e-commerce giant said profit nearly doubled in the critical holiday period, as the company controlled labor and supply costs better than expected and saw gains in its cloud-computing and advertising businesses.

Sharp moves in the share prices of large technology and social-media companies have an outsize impact on broader indexes. Amazon.com had a 3.3% weighting on the S&P 500 as of Wednesday, according to data from S&P Dow Jones Indices. Meta, whose shares tumbled Thursday, had a 2% weighting. 

Global markets have been highly volatile in recent weeks.



Photo:

Allie Joseph/Associated Press

“Those companies which have continued to deliver strong results have held up relatively well,” said

Mike Bell,

global market strategist at J.P. Morgan Asset Management. “Those companies which were priced as heavily valued growth stocks, but then under-delivered, are getting hit extraordinarily hard.” 

Snap shares surged about 39% premarket after the social-media company posted its first quarterly profit and signaled it is adjusting to disruptions in the digital-advertising market caused by

Apple

privacy policy changes that are affecting Meta.

Pinterest

jumped about 7% premarket after it reported its first full-year profit and more than $2 billion in annual revenue.

However,

Clorox

shares tumbled 15% premarket after the maker of disinfectant wipes and other cleaning products reported earnings that missed analysts’ expectations and said margins would take a steep hit from continued cost pressures.

Ford Motor

shares declined more than 6% premarket after the auto maker posted earnings that fell short of Wall Street forecasts.

The monthly jobs report reveals key indicators about the labor market and the overall state of the economy, but it doesn’t show the entire picture. WSJ explains how to read the report, what it shows and what it doesn’t. Photo illustration: Liz Ornitz

In bond markets, the yield on the benchmark U.S. 10-year Treasury note climbed to 1.886% after the release of the jobs report, versus 1.825% Thursday. Yields and prices move inversely. Oil prices climbed, with global benchmark Brent crude up 1.8% at $92.77 a barrel, due to supply tightness and a winter storm in the U.S. that may disrupt production.

International markets have been volatile in recent weeks, and on Friday, the pan-continental Stoxx Europe 600 fell 1%. Markets have been rattled by the increasingly hawkish tone from global central banks. On Thursday, the Bank of England raised borrowing costs again, while the European Central Bank kept its key interest rates unchanged, but signaled concern about inflation and opened the door to a possible rate rise this year.

Annual inflation in the eurozone rose to a record 5.1% in January, more than double the ECB’s target. Some investors are betting on future rate rises to curb inflation, and are selling government bonds, pushing the yield on Italy’s 10-year debt up to 1.718% Friday, from 1.650% Thursday. In a sign of rising risk aversion, the spread between benchmark Italian and German government bond yields rose to its highest level since July 2020.

The Federal Reserve has also set the stage for a series of rate increases in 2022, leading investors to shift toward investments that are deemed safer, such as stocks of companies that pay regular dividends.

The market volatility could continue until the Fed implements its first interest-rate increase and investors get used to the idea of rising rates, said

Peter Andersen,

founder of Massachusetts-based investment firm Andersen Capital Management. 

“The fact that everything is sold off wholesale is really, in my opinion, a buying opportunity,” Mr. Andersen said. “Every investor is so spooked now, and nobody really has a compass to figure out where exactly we are in this cycle.”

Since the start of this year, the Nasdaq Composite has lost more than 11%, while the S&P 500 has slid 6.1%. The Dow, in comparison, has fallen 3.4%.

In Asia, stocks in Hong Kong resumed trading Friday following a three-day holiday closure. The Hang Seng Index added 3.2%, led by gains in banking and technology stocks. Japan’s Nikkei 225 index rose 0.7%.

—Caitlin McCabe contributed to this article.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Dave Sebastian at dave.sebastian@wsj.com

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Business

Stock Futures Waver After Jobs Report

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U.S. stock futures wavered after the monthly jobs report missed expectations.

Futures tied to the S&P 500 slipped around 0.3% , after the broad-market index closed down 0.1% in Thursday’s choppy session. Nasdaq-100 futures slipped 0.8% and Dow Jones Industrial Average futures edged down around 0.2%.

The yield on the benchmark 10-year Treasury note hovered at 1.760%, after four consecutive days of rises. Yields increase as bond prices decline.

The latest monthly jobs report showed that the U.S. added 199,000 jobs in December, below the 422,000 expected. Still, 2021 concluded with the U.S. adding a record number of jobs last year and the jobless rate fell to 3.9%.

Stocks came under pressure this week after the Federal Reserve’s minutes confirmed its intention to pull back stimulus and suggested it might do so sooner and faster than previously planned, due to high inflation. The S&P 500 is down 1.5% this week, on track for the worst weekly performance since mid-December.

Meme stock

GameStop

surged around 18% in premarket trading after The Wall Street Journal reported the company was planning to enter the cryptocurrency and nonfungible token markets.

AMC Entertainment,

another company popular with retail traders, advanced 5%.

Government bonds have sold off as markets price in the possibility of earlier interest rate increases and the Fed shrinking its portfolio of bonds in the near future.

Stocks have been under pressure since the release of the Federal Reserve’s policy meeting minutes.



Photo:

BRENDAN MCDERMID/REUTERS

“Everything happening in markets this week was about expectations on how fast the Fed is going to tighten policy,” said Fahad Kamal, chief investment officer at Kleinwort Hambros. “This is a transition year where we go from record policy support toward actual tightening. There will be huge volatility as we figure out how to work in this paradigm.”

Fed officials have said labor market health is a crucial factor in their monetary policy decisions. Investors will be scrutinizing the report closely to see if it is consistent with the Fed’s plans outlined in the minutes and whether wages are continuing to increase, which could mean more sustained inflation. 

“If the data shows the labor market is still running pretty hot, it strengthens the case for hawks that the Fed needs to get on and tighten policy,” said Sebastian Mackay, a multiasset fund manager at Invesco.  

Oil prices edged up. Global benchmark Brent crude rose 0.8% to $82.63 a barrel in recent trading, the highest level in over eight weeks. Oil supply could potentially be lower due to cold weather in North Dakota and Alberta, Canada and if protests in crude producer Kazakhstan affect output, according to analysts at ING.

Protests first triggered by rising fuel prices in Kazakhstan have turned violent, prompting a Russian-led military coalition to send troops to the oil-rich country. Video shows government buildings and streets in several cities being stormed by demonstrators. Photo: Mariya Gordeyeva/Reuters

Overseas, the pan-continental Stoxx Europe 600 ticked down 0.3%.

European government bond yields rose, with the 10-year German bund yield climbing to minus 0.1%. If it surpasses 0, it will be in positive territory for the first time since 2019.

In Asia, major stock benchmarks were mixed. The Shanghai Composite Index fell 0.2%, while Hong Kong’s Hang Seng Index rose 1.8%, led by gains in technology stocks. E-commerce giants Alibaba rose 6.5% and

JD.com

gained 4.8%. South Korea’s Kospi Index rose 1.2%.

—Gunjan Banerji contributed to this article.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com

Corrections & Amplifications
GameStop rallied premarket. An earlier version of this article incorrectly referred to GameStop as GameStock. (Corrected on Jan. 7.)

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